The Loyalty Card Misconception

The Loyalty Card Misconception image 300px Sobeys Airmiles loyalty card 4284

There are a few sides to the loyalty card argument. The consumer arguments go like this:

  1. I LOVE loyalty cards! I get great discounts at all kinds of stores and I save tons of money! Give me another one!
  2. I HATE loyalty cards! I don’t need ten more plastic cards taking up space in my wallet just so I can have the price that something should have been all along!

And the retailer argument goes like this:

  1. I LOVE loyalty cards. It’s a mutually beneficial partnership between me and my loyal consumers. My consumers understand that we are offering great deals on products in return for a bit of information. The cards let me track the behaviours of individual people people right down to the SKU level. They let me know when and where and how often and how much each person buys of every single thing. Now that I can predict people’s household size, number of children, age of household members, race, religion, and education, I can plan my sales and discounts to encourage them to buy products they don’t usually buy.

But the bigger problem with loyalty cards is this. Consumers don’t TRULY know what’s going on behind the loyalty cards. Consumers don’t truly know that those loyalty cards mean their every move is being tracked. Consumers don’t truly know that every purchase they make is monitored and analyzed and fed back into the great shopping machine that dictates which ads and sales will show up in their inbox and at their doorstep. Consumers don’t truly know that the local grocery stores and clothing stores and electronic stores have algorithms that accurately predict every aspect of their personal lives. Consumers don’t know that their information from one store is getting matched up with information from another store creating an even more precise and eerily creepy description of their household.

Just like every Terms of Service and Privacy Policy out there, loyalty card agreements are too long, too difficult to read, too vague, and too easy to misinterpret for us to assume that consumers get what they’re signing up for. Retailers like to think they’re offering up a partnership where both parties benefit. But when one party doesn’t understand the whole picture, it’s not a partnership. It’s simply a business. Are you offering a partnership or running a business?

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