Loyalty fee: The price of retailers' reward cards

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Loyalty fee: The price of retailers' reward cards
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Loyalty cards started out as a way for retailers to keep customers coming back - now they're a way for them to gather data about their preferences and habits, writes adammaguire

Whether it’s your regular supermarket, your local butchers or favourite café, it seems as though almost every retailer is offering some kind of sweeteners to win your business.We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.

Most shops’ programmes would offer points back on any money you spend. For most it’s one point for every euro spent, and that point is worth one cent.If a retailer announced a sale where it was offering a 1% discount on all its products, it’s unlikely that people would be banging down the doors to get in.

Or you might get entered into a competition, with one entry for every tenner you spend, or every transaction. Even 30-odd years ago, when Superquinn was one of the first in Europe to launch a loyalty programme, it was recognised that shoppers are creatures of habit. But in the past decade or so loyalty programmes have transformed into a valuable way of learning so much about customers.When you sign up to a programme you probably have to hand over some information – like your name, maybe address and date of birth.And then every time you swipe or scan your card, they’re learning about some of your habits – where you do your shopping, whether you do a weekly ‘big shop’ or do lots of small shops during the week, whether you pay by cash or by card and so on.

And because they know your name, date of birth, maybe your gender – they can then use that to build a profile of people similar to you.And if they’re really good they might even be able to pre-empt your thinking, which means you get a notification on your app on a Saturday morning giving you 20% off a large tub of ice cream, but only if you buy it today.

And the story goes that they even got a call from an irate father who wanted to know why his teenage daughter was being sent coupons for nappies and cribs; only for it to turn out that the shop had spotted his daughter was pregnant before her family did.Very – and Target quickly found out that – unsurprisingly – people didn’t like to find out that their reproductive systems were being closely monitored by a shop.

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