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Usage of Loyalty Cards Widespread in Spite of Privacy Worries

BOSTON - According to the results of a study by a student research tem at Boston University's College of Communication, supermarket loyalty cards are more pervasive than the Internet or PCs: Eighty-six percent of adult consumers have at least one, and many have several. Additionally, in an online survey of 515 shoppers age 18 and over conducted the last week of October, the researchers discovered that even though privacy was a concern, the majority of cardholders believed that the benefits of loyalty cards outweighed any checks on personal privacy.

Seventy-six percent of cardholders said that they used their loyalty card almost every time they shopped, despite the fact that 52 percent worry about how much of their personal information is collected by companies in general. Sixty-nine percent of shoppers said that the card benefits them through lower prices and access to special promotions. And though seven in 10 shoppers now know that grocery stores keep track of what they spend, only 16 percent think about this fact each time they use it.

"The fact that consumers -- even those generally concerned about privacy -- are willing to use these cards is testament to the fact that personal information is a commodity people are willing to trade with the right company for the right price," said Prof. James McQuivey, supervisor of the research project. This, he thinks, will only embolden supermarkets as they try to squeeze more dollars from a thin-margin retailing environment. Speculating on what's to come, McQuivey said: "Expect radio frequency identification embedded in the loyalty card of the future, an electronic tag that will identify you when you walk through the door, when you're standing in front of the Pampers, and when you arrive at checkout. All with your permission, of course, and in exchange for a benefit grocery stores have yet to identify."

The sample was randomly drawn from a representative subgroup of participants in Survey Sampling International's U.S. online panel. The margin of error for a randomly drawn sample this size is +/-5 percent.
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