Many of us participate in at least one customer loyalty program. Why? We love getting free stuff. And to attract and retain loyalty from customers, the programs reward us for our continuing patronage through special discounts, free hotel stays, free flights, and more. But, we are also relinquishing some of our privacy when enrolled in these programs.

In this instance (loyalty programs), does the loss of privacy concern shoppers? Does it concern YOU?

As Erin Lynch writes for Multichannel Merchant: “Enrollment in loyalty programs is on the rise across all retail categories, but soaring participation in retailer loyalty programs does not necessarily translate to ‘genuine’ loyalty and relevant communications are increasingly essential in loyalty engagement. However, recent Mintel research finds that consumers are also concerned about privacy when weighing whether or not to sign up for a loyalty program. Indeed, roughly one-third of Americans (32%) believe that the privacy of their personal information is an important attribute of a loyalty program.”

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19 Replies to “Loyalty Programs and Privacy: Are They Compatible?”

  1. This is quite interesting. I dont think there are too many loyalty programs in China. And I personally havent been engaged in any of those programs. So i cant really make any comments about it. However, I do concern about my privacy and thats one of the biggest issues. In China, many companies sell their consumers contact information out to other companies. It has been identified as illegal action but I guess there is a huge profit in this area. Many employees in some particular industries such as telecommunications even sell those information out without letting companies know. But in America, I barely leave any contact information to any companies, just my phone carrie, Amazon and paypal. I think they should be safe enough.

  2. The name of the game is privacy, Its not like i believe companies dont share consumer information with one another, you give your email out on a survey which they say is “confidental“ then you start receiving random promotions and craziness. Keep your or privacy as private as possible, scams and frauds are the new thing especially anything over the internet. I mean come on look at what the NSA is doing with its domenstic spying programs and servalience grinds….We need to slow down lol

  3. I personally haven’t been involved in any loyalty programs yet but bot my parent’s are heavily involved in loyalty programs for hotels, airlines, casino’s, etc. I have never really considered how compromised one’s privacy becomes when involved in a loyalty program. But now that I think about it, based on the amount of emails and phone calls my parent’s receive from places they’re not even in a program for, people’s privacy is pretty low. Once you give your information to a place for their loyalty program, they can then give your information to other places so that they have a chance to pull you into whatever business they’re involved in. It’s a neat way for other businesses to get to you, but it is also a big breach in one’s privacy because you only wanted that one place to have your information and now they’re just giving it away in most cases without you even knowing.

  4. This post on loyalty programs was fascinating to me because I am obsessed with loyalty programs. If a sales person asks me to sign up for one and they tell me I can save money even if it’s just a dollar, I’ll sign up. I love the CVS membership card because I can go in and print coupons in the store and it’s tailored to what I have bought in the past. I never really think about my privacy when signing up and I’ll leave certain information blank if I don’t like sharing it. What I found interesting in this post is how different age groups choose which loyalty cards they are going to sign up for, I have loyalty cards to club stores, convenience stores, food services and retailers. But I know that there are certainly some selective stores I am loyal to more than others because how easily I can get discounts or how easily I can get to their location. The main point for me is deciding whether my privacy or saving money is more important.

  5. I don’t think loyalty programs are an invasion of privacy. Like the post mentions, how could the program be tailored to you to make your experience better if it doesn’t ask questions? Personally, I’ve never been asked any invasive questions when I’ve signed up for a loyalty program; the worst that has ever happened is getting large amounts of unwanted emails. The email problem isn’t even a real issue since you can always unsubscribe from the email service. Loyalty programs are wonderful and save consumers large amounts of money. I couldn’t imagine shopping without a loyalty card.

  6. Privacy is certainly important to consumers! However I would not let a fear of invasion prevent me from signing up to a loyalty program. Usually the most information a brand requires is a telephone number or an email address merely to subscribe to their notifications of sales and specials, and you can always back out of the emails by clicking unsubscribe. Of course this does change when applying for a store line of credit. I am a big fan of loyalty programs! It’s a great way to save money on the places that you regularly visit to shop.

  7. I love loyalty programs. In fact, Starbucks sent me a coupon today for being a rewards cardholder to redeem a free holiday latte. I think it is a good way to keep customers coming back for more and I think it is a win-win situation. I don’t believe that my privacy is being violated in any way.

  8. Loyalty programs are a good example of selectively trading privacy for a better deal. I do not like when companies collect information that is unsought, but in the case of loyalty programs it is an opt-in and it can give benefits such as sales or free stuff then it would be worth the trade. In most cases they don’t collect information you don’t already give them so to think loyalty programs (ones that don’t sell your information) invade privacy is ludicrous.

  9. For me personally, I love loyalty programs. While companies require different information from their customers to be enrolled in a program, all I have given out is my personal email address. If a company asks for my phone number, I decline to give it out. Yes customers privacy is important, but if a customer is saving money at a store they regularly visit then its a win-win. I have been a loyal customer of Starbucks for years, and once I spend a certain amount I can get a free latte or a discount on a treat. When it comes to loyalty programs, I don’t see substantial harm to my personal privacy.

  10. I have never been involved in a loyalty program but my father is heavily involved. He travels a lot so he is enrolled in loyalty programs for mainly airlines and hotels. He loves the special offers he receives and he can use them often since he travels almost every month. However, my father’s home phone rings non-stop because airlines are calling about deals and also his email blows up every week. Some of these companies he has never even heard of. So it looks like his privacy isn’t really protected by these loyalty programs. But my father doesn’t seem so worried about it because he gets his deals. But to me, I’d never give out my information if it means I’m going to receive 50 emails a week from companies I don’t even know.

  11. I myself am a part of a few loyalty programs and I do enjoy the benefits of being a part of one in that I am able to save some money on my purchases however from reading this post it just brings to light how much information about ourselves that we are giving to these companies. And furthermore I ponder on the fact that it is quite conceivable that these companies can get hacked and that information might go to the wrong hands.

  12. Privacy does not matter to my family when it comes to loyalty programs. For mom at least, it is all about the savings. That is why she gives out an email address we barely use and just has them send the discounts through the mail. For example, Kohl’s does a great job of this. They have circulars with tons of coupons, special occasion discounts depending on the time of the year, and they also have the Kohl’s rewards card that keeps compiling points until you get Kohl’s cash. That is what loyalty is about to me. That you trust a company enough to give them some personal information, and you know that that information won’t be shared with other people. That is why Kohl’s is so successful when practicing this. I would know too…I’m a supervisor there.

  13. Reasonably so, one should always be concerned about the privacy of his/her personal information. Releasing sensitive data to the public can be used to determine a person’s exact location, lead to identity theft, and even potential home robberies. Incentivizing membership in loyalty programs with monetary rewards, earning points, and redeeming awards are brilliant ways of expanding consumer participation. Privacy will always be of concern, especially given how much sensitive data consumers are requested to provide. That information is a valuable resource for businesses, as it can be traded for monetary value to advertising and marketing firms. Thus, the more data a loyalty program gathers, the more valuable their data is. The concerns over this data being misused or insecurely transmitted raises the question of whether it is a safe bet to take or not. And in this day and age, its hard to not participate in these programs without putting at least some parts of your life available on the internet.

  14. I most definitely think that the loss of privacy would deter me from loyalty programs. I’m already someone who just finds the process of signing up for loyalty programs in general very annoying. If there was a way that made it unsafe wouldn’t that deter someone even more from signing up? When it is possible to release this data out into the universe especially in a day and age when we live with the philosophy that whatever gets put onto the internet is “permanent”, it only hurts the loyalty programs.

  15. Loyalty programs don’t usually appeal to me. They seem like such a hassle to fill out the information. Also the information I am disclosing to them I feel invades my Privacy a little because they require so much personal info. I mean people still get involved in Loyalty programs for the perks. I wouldn’t say I discourage getting involved in them I would just say to be cautious. A lot of stores nowadays have some type of info on record for you when you make a purchase so your privacy is never really fully protected at this point in time.

  16. Loyalty programs are the best in my opinion. All one needs to do is give your full name, email address, and sometimes a phone number and somewhere down the line just for shopping you get points. The points you accumulate helps you get free stuff in the future. Just last week I went to walgreens and I had enough points that I got $5.00 off my order. It was the best surprise ever. I don’t mind getting some annoying emails from companies I would never purchase from if it means I get to be surprised by $5.00 off or something. Most of the loyalty programs also require no effort to acquire points, just a phone number. That’s why everyone should love loyalty programs.

  17. I’m a big user in loyalty programs, and i think that they are really useful. Personally, I haven’t even thought about the privacy part of the entire process until reading this. My favorite loyalty program is stop and shop. All i think about is the dollar off aspect to save some money.In the whole process I was never asked anything private. I don know that they follow what you like in the store and that can be a little evasive but thats it.

  18. Loyalty programs are an important aspect of many companies and their relationships with consumers. As someone who is a part of a few loyalty programs, I don’t feel like my privacy is in danger. In my experience, there hasn’t been any questions asked while signing up for one of these programs that I thought was too personal or invasive. I think the questions asked are pretty basic and are used by the company to see what types of customers they’re reeling in with these programs. The most that can happen by signing up for a loyalty program is an increased amount of e-mails from a company, but even that can be changed with a simple click of the “unsubscribe” link at the bottom of the e-mail.

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