Store Rewardsโ Cards โคMay Be Tracking More Than Just Purchases, Perhapsโฃ Leading to Higher Prices
WASHINGTON – โ Loyalty programs offered by major retailers like Starbucks, Best Buy,โค and GameStop may be leveraging customer data to inflate prices,โข a recent โฃinvestigationโ by The Washington Post reveals. Rather than consistently offering discounts, these programs can track spending habits to determine howโค much individual customers are willing to pay – a practice dubbed “surveillance pricing.”
The practice โimpacts anyone who uses rewardsโค cardsโ or store apps, potentially โdiminishing the value of those programs. While marketed asโฃ a way to earn points, promotions, and freebies, these programsโค are increasingly used to โbuild detailed profiles of consumer behavior, allowing companies to โคcharge different prices based on perceived willingnessโ to pay.
Washingtonโ post reporter Geoffrey Fowler utilized California‘sโ consumer privacy law to request data โขStarbucks โcollected on him. The resulting details showed theโ coffee โgiant tracked allโ of his purchases,locations,and even how frequentlyโฃ he opened their app – recording over โข90 app interactions โฃinโ a single day last March.
“Starbucks was trying to start a dossier on me and size me up, and ultimatelyโฃ figure out โhow โขmuch I would pay,” โFowler told WTOP. He also discovered Starbucks was selling his information to data brokers and, despite increased spending, received fewer rewards.
Fowler โexplains that “surveillance pricing” worksโฃ by identifying customers who rarely use loyalty programsโ and โenticing them back withโ deals, while simultaneouslyโฃ charging more frequent users a โฃpremium. “They call it personalizedโ discounts.You might call it personalizedโ ‘jacked up prices,'” he said.
