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They can gather a lot of information about you that way. Information is $$$
They're gathering info from my shopping habits, but I have no idea who they're associating it with xD
I've used the same Kroger card since 2002. It's one I found in the Kroger parking lot near my college dorm and have used since.
They don't really *need* to associate it with a specific person (although I'm sure they'd love to)- they can get plenty of data just within the context of what a single person buys in their store.
Like if you're pregnant.
They can match it to you phones location and your credit card number.
It's also generally not about *you* in particular. They mostly just want to lump you in with similar lifestyles groupings. Then they target you and your cohorts with targeted sales, advertising, or sell that data on the open market.
I don't use the app (or any for that matter), but yeah I guess they can track via my debit card.
Even still, it only takes a few data points to presume exactly who you are. They are all buying and selling data. The phone company says this credit card pays for that phone number. And that credit card is used with this store perks card....... The data is all there.
They're associating it with your debit/credit card, unless you're buying with cash only. Also, the "identity" isn't so much the target as the "profile". Don't get me wrong, if they are able to personally identify you, the communication will be much more... personalized... (good english) - mailings, texts, emails and coupons for stuff either you've bought or adjacent to your stuff (with better margins for the store) addressing you by name, grouped with other purchase-history items. But back to the profile: building a profile of your likes, dislikes, brands and such is valuable data that gets more $ for corporate as the fidelity gets higher. And as it does, the messaging to you gets more targeted.
This is why I always try "Jenny's Number" for loyalty programs when I can enter an phone number (Local area code +8675309). A Safeway near me used to offer fuel points with grocery purchases up to $1 discount per gallon. I saved a lot of money in gas for a while, then it seemed Safeway got wise and deactivated those numbers.
Smart.
Haven't had this happen for a while, but cashiers used to ask for a zipcode when checking out. Always gave them 90210 .
It also encourages you to shop at, say, Kroger rather than Safeway.
Because if you have a Kroger's card you're going to want to shop there more often to get the free stuff. You're not paranoid, it is a psychological tactic to get you to spend more money. Casinos do similar things.
Also, throwing in occasional free stuff makes it harder for customers to comparison shop: they’ll assume the free items balance out higher costs on other items without actually doing the math. (It also exploits the sunk cost fallacy.)
They get even more detailed information about your buying and spending habits. They can use this information to better manage their stock and sales to maximize profit, and probably more importantly, they can sell your contact information and buying habits to other companies who are in the very lucrative business of aggregating consumer data and monetizing it.
There are lots of reasons. Some off of the top of my head:
To add to point #3, they can also sell on the customer data they collect to marketing companies for added revenue.
The answer is nearly going to always be ‘your data’ and loyalty
First, more business. (If you get "rewards" like discounts or whatever, you're psychologically more likely to return more often. Or at least some customers are and it's not like they can really offer rewards only to the ones who are more likely to return.)
Second, and probably more significantly, data about you that they can use to do targeted advertising at you or sell to others (for a profit) who want to do targeted advertising to you.
If the rewards program involves a phone app or web app, that can get access to a lot of information on your phone or information about your browsing habits. And that can also be directly used or sold to someone else who wants data on you.
You're definitely justified in being paranoid. It's very much the kind of thing where if you stop buying Oreos regularly, Facebook will start sending you Oreo advertisements. (Oreos are just an example. It could be any company/brand that they advertise to you this way. But you know what I mean.)
Fuck, now I really want Oreos.
Anyone who says I'm a Nestle spam bot is a dirty liar.
I'm actually a Nabisco spam bot.
used to be it would make you a happier customer that was more likely to patronize them over a competitor. Nowadays though its all about harvesting your information which is why they really have a hard on for you using their app usually.
There's a reason they are called, internally in business parlance, "Loyalty Programs."
The point is to get you to come back. Using the Kroger card at Kroger gets you discounts. Or rather, gets you their regular price; their non-card prices are artificially inflated in most cases. So consumers form the idea in their heads that those discounts have value and will return to that store to take advantage of them. This is played up by the retailer in their marketing, who will use terminology to try to make you feel special about the program. (As if it's not offered to absolutely everyone who will listen, and also everyone who won't.) Look for words and terms like "exclusive," "VIP," or "members only," or "just for you."
The buy-stuff-to-get-rewards schemes are the worst, because they prey on the inbuilt sunk cost fallacy neurons in people's brains. You are statistically likely to buy and spend more if you think you're going to get something back, or spend a little more than you otherwise would have to meet whatever threshold they set to get the next reward. Even if the reward you get back does not actually match in value to the extra amount(s) you spent. (Hint: It never does. The house *always* wins.)
Nowadays, of course, they also track and record your purchase history and sell it to whoever will pay. Possibly anonymized in some way, but probably not.
Free stuff gets you in the door where you'll be likely to spend money on other stuff.
Building 'points' or whatever to get free stuff gives you an incentive to buy things from Kroger you might get elsewhere. Ton of benefits to 'gamification' of damn near anything.
And giving free stuff creates a positive experience attributed to Kroger so you'll be more likely to think positively about Kroger in the future.
Plus all that if they have your email\address they can send you more coupons or whatever to get you back in the door. And a more sophisticated system may track your spending to more effectively influence you through the first three mechanisms. But those are pretty classic 'customer loyalty' ideas from before big data was even a thing.
I've worked at Safeway for a few years and one night my friend who counts the tills showed me what type of info they collect.
I scanned my own safeway card into the system and holy shit they have data on everything I've ever purchased using that card.
To get you to shop there more
Protip: use the Jenny phone number for any loyalty programs you don’t want to sign up for. I use 512-867-5309 as the alt ID and it works every time.
Substitute your local area code as needed: ###-8675309.
This is from a talk the CEO of the self-proclaimed first Canadian company to offer its own points based rewards card, not just AirMiles(which was presumably making money on the same thing, selling metrics.) it was a long time ago, so forgive the inexact quoting.
I wish. If they really were trying to better serve their customers, it might be worth giving up the data. However it’s long since become a goal of its own, a profit center, a strategy for conning the customer out of more money
"Serve" in this case is double speak for
find out which things everyone in an area buys so we can increase prices on those as well as move them to harder to reach spots so you have to look at other things Kraft is bribing us to sell and have prime placement on.
Thats another thing, Kraft literally bribes grocery store management to have preferrential treatment. They buy the managers a shopping spree inside the store every christmas.
Here, let Bill Burr tell you
I can kind of answer this question. For a year, I worked at a big box store where you can "save big money". They had periodic training and one of the modules was on their store card.
The question was, "Why do we want people to have our card?"
I replied, "Because we don't have to pay the standard processing fees."
"No, it's because of loyalty. If they have a [big box store] card, then they're much more likely to spend their money here instead of [competitor]."
They're trying to capture the consumer surplus. Normally, a seller can have either high margins and low volume, or low margins and high volume. The retailers wet dream is to get the benefits of both. If the reward program profiles you as someone who buys coffee at $4.00, but not at $6.00, you'll get coupons for coffee that the people who buy coffee every week regardless of price won't get.
FWIW, I've found stores that don't even have rewards cards frequently have lower prices than their competitors' reward card sale prices.
This is the import fact to get from this thread
I’ve especially seen this with groceries. There are several choices, meaningful competition, and I find the stores that don’t push rewards cards tend to have better prices, even after counting the rewards
Check out the Target story from years ago where a dad went mental that they sent vouchers for baby stuff to his pre 16 yo daughter.
Turns out they knew she was pregnant before the family.
Point being. Data is scary powerful at scale. Tesco in the UK is holding us hostage to get a card as literally half the items are cheaper with one. My friend group all use the same one though to pollute the data.
Use cash for this strategy. If you're using credit or debit cards they can separate the data that way.
Don't phone pay wave apps provide a temporary number?
Good point. I believe they do generate a temporary virtual card number but I'm unsure if it removes all potentially identifying information from the transaction.
In Australia there are phone numbers set aside exclusively for use in fictitious TV shows and stuff, to avoid idiots trying to call characters from TV or movies.
The ACMA publishes a list of these phone numbers. The first on the list is 0491 570 006.
Whenever I'm asked for a card I just say I forgot it and get the cashier to look it up with that number. I've never had to sign up since I started doing this.
Pro tip: often times the cashier will look surprised and ask your name, because they will be looking at dozens of other names that have used that number. Just ask who's listed, pick one of the first ones and say 'yeah Skye, that's my girlfriend' or whatever. Weird but it works.
The Walgreen's near me sometimes lists prices in points. Companies use these rewards programs to muddy the waters of who has the best deal. They want you to buy their produce even if they're more expensive because you've already bought into their rewards program. Its easy to say, Bob and Jim are selling the same product but Bob is $5 cheaper. But if Jim has a rewards program where you get compounding discounts over time as you buy more from them, it becomes real hard to do the math about who is really cheaper in the long run. It should be absolutely illegal or at least heavily regulated because its not only anti consumer, but undermines the free market by allowing companies to "lock down" customers with long term savings that can change over time. A free market makes it easy for consumers to make choices, not harder.
I guess if they have a closer relationship to you as a customer you're more likely to buy more of their products in the future.
You sign up for the card because you already shop there enough for you to justify having the card. You wouldn't sign up for the card of a store you never go to unless there is some financial incentive, like sale price for members.
They want your data for marketing a resale.
There’s never as much free stuff as they make it seem, plus usually it means the regular price is higher than elsewhere. If a store is picky with their card, I take the hint and go elsewhere.
Although realistically, my ex also thinks she benefits from those, so I usually pollute her data. She doesn’t mind plus she gets the benefits quicker, whereas I like that the data is not directly connected to me
Edit: yeah, I do use credit card though