Person-to-Person Loans vs. Supermarket Loyalty Cards

Posted by Mike Smith :: December 10, 2007 @ 9:37 am

In many supermarkets throughout the country today, you need a loyalty card to get the sale prices. Signing up for one will likely save you a lot of money, but it does come with a cost: giving up a little bit of your privacy.

I’ve always been impressed by the summary at the end of my grocery receipt. It tells me the amount that I saved by using my customer loyalty card. The amount adds up quickly and really does save me a lot of money. In addition to my receipt, I usually get a few computer-generated coupons, and they give insight into the corresponding loss of my privacy.

The coupons tend to be for products I buy repeatedly. That means that the supermarket must store a list of my shopping preferences. Even if my name isn’t stored with that information, it still seems like a breach of my privacy. I used to get competitor coupons when purchasing certain items, which seems far more reasonable. Matching current transactions to potential future purchases isn’t as invasive as storing information to generate trends.

Some might find the coupons useful. Taken to the extreme, it might seem nice to get a coupon this week for an item that the grocery system knows you’ll probably be buying next time. The store knows this because it has calculated that you should be running out of the item soon, based on your prior purchasing trends. Such a coupon might even remind you to check to see if you need the item.

Loyalty cards have other benefits as well. Since my grocery store also sells gas, I can save 2 cents per gallon by swiping my loyalty card at the pump. Many cards also pay postage fees to return your keys to you. If someone finds your keys with a loyalty card attached, the person can simply drop them in a mailbox and they will be sent to the store, which will then return them to you.

The point of this post is not to say that supermarket loyalty cards are good or bad, but rather to help you realize that there are tradeoffs for using them. It also serves as a reminder to review privacy policies for all of the companies that you deal with. Lending Club’s privacy policy, which explains how your person-to-person loan, lending portfolio and other personal information is protected, can be found here.

It is an entirely personal matter whether or not the loss of privacy is worth the weekly monetary savings and other fringe benefits of a supermarket loyalty card. Even if I don’t like it, I believe that it is worth it for me, but you’ll have to decide for yourself.