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Privacy Advocates Oppose Supermarket Loyalty Card Programs

NEW YORK - A growing number of privacy advocates who feel that supermarkets' loyalty card programs invade their privacy and offer unfair promotions are showing their disdain by staging protests at stores, a recent article in BusinessWeek magazine reports.

On June 15, more than three dozen demonstrators gathered at a Kroger-owned QFC grocery store in Seattle's Capitol Hill neighborhood to protest the store's new loyalty-card program. For two hours, they picketed, handed out leaflets, and chanted "No Cards!" and "One Price for All!"

An anti-card organization called is recruiting members across the country who in turn are raising awareness in their communities. In January, staged a well-attended protest in Dallas. Its next rally is slated for Denver where Albertson's is considering launching a shopper-card program.

The protesters and growing ranks of disgruntled shoppers around the country claim that the personal data and shopping information collected by supermarket companies from loyalty cards purchases violates their privacy rights and doesn't even save them money.

Independent grocer Gary Hawkins, who also serves as president of Syracuse, N.Y. consulting firm DataWorks Marketing, defends the practice, commonly referred to as customer-specific marketing. "Supermarkets need to extend special prices, but only to certain customer segments," he told BusinessWeek. "As stores begin to better understand the data they're collecting, they'll use it not just for marketing but to develop new metrics to manage and serve customers."

Hawkins already uses shopper information at his Green Hills Farms store to assist in selecting products, allocating category shelf space, and deciding what products to discontinue.

Hawkins estimates that fewer than 30 percent of grocery stores that now collect data know how to use it effectively and that less than 10 percent are able to use it strategically to set prices.

Opponents say the loyalty cards are already being used to adjust prices, and the effect is that card-carrying shoppers don't really save anything, while the innocent consumers who chose not to participate in loyalty programs pay even higher prices.
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