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Charges dismissed!
Arson charges against firefighter dropped after another confesses
We previously reported that a fireman in Everett, Washington had been arrested for setting a fire in his own home. The fire was reported to have been started using a "firestarter" which, although charred, still had a "Safeway Supermarket" label attached. Police used Safeway club card records from the family to show there had been a purchase of the firestarters in July, and a police dog that was asked to track the arsonist repeatedly went from the fire to the homes front door.
This week the charges were dropped after "another person accepted responsibility for the fire" according to news reports. At least one media outlet, KIRO TV, is reporting that his wife was the one who came forward.
In our original article on this we noted:
Retail stores attempt to portray privacy fears as being groundless but the fact remains that this data is accessible, and will continue to be so for years. And even though this data "might" help law enforcement officers, the potential is equally large to implicate people who have committed no crime.
Little did we know... Five months after his ordeal began the firefighter has been restored to full duty but it is anyone's guess how long the emotional scars will take to heal.
In a similar story, a magistrate was convicted of theft in Southampton, UK for failing to return a Rolex watch he purportedly found in a supermarket after a woman lost it. The man was found by police when he took it to a shop to be repaired and the watchmaker matched the serial number to a list of lost or stolen watches. The magistrate stated he had purchased the watch at a bric-a-brac shop but was unable to state where the shop was or to produce a receipt. Investigators were able to show he was in the same store within 2 hours of when the woman reported she had lost the watch through his Tesco club card. The magistrate claims he is innocent and vows to appeal.
In our archives we have a few other instances where databases were used in a manner that wasn't exactly beneficial to the consumer, including one woman who found police searching her home after store security cameras saw her placing her own scarf into her purse and tracked her to her home through her club card.
The bottom line is that the only way to avoid having something similar happen to you is to keep your name out of as many databases as possible. (And don't forget that your "fake" card becomes worthless if you ever write a check or use a credit card because they can then tie your true identity to the card)
Sources:
The Herald
KIRO TV
KOMO TV
The Times Online
Segmentation continues
Stores continue to shift rewards to "top" shoppers
We've reported on the issue of customer segmentation a few times in the past and are not surprised to see continued movement by supermarkets towards this goal. In this article from the ABS-CBN news in the Philippines, Rustin Supercenter executive Donnie Tantoco discussed his stores program. The top 5% of shoppers in the chains ShopWise stores earn a special "elite" card which gives them special perks in the store such as exclusive carts if the store runs out of the others. Tantoco explained some of the other benefits:
“They also have check-out areas exclusive for their use so they don’t have to fall in line too long. We also give them gifts and are offered free snacks and coffee while waiting, aside from getting additional discounts on selected items,” Tantoco said. “We are also more liberal in our return policy toward them, albeit there are no cases of returns so far.”
Tantoco also stated that "Over time, loyal customers become less price sensitive". Logic dictates that if the "top shoppers" are less concerned with price, (and the store is focusing primarily on that segment), then discounts for all customers may be reduced as well.
In The Morning Newsbeat Barry Kotek of Retail Systems Consulting drives home the point:
"The major problem with the programs isn’t that they offer coupons and discounts, but that most offer the same discounts for everyone that has a card. They don’t take into account that their top 25% of shoppers make up close to 70% of their sales and profits."
What Mr. Kotek fails to take into account is that a good portion of those "top 25%" are likely large families and the single shopper can't begin to come close to the same amount of purchases. It has little to do with "loyalty" and everything to do with economics and even a 100% "loyal" customer may find themselves cut out of future sale prices.
We've also written about Dorothy Lane Markets here before and stumbled across another article, (subscription required), about them recently. As we noted before, Dorothy Lane segments their shoppers and according to this article they give "increased amounts of personal service to customers with increasing purchase levels". What do you give the shopper that has everything? Flowers hand delivered by the company CEO, Norman Mayne. As Amy Brinkmoeller, MIS director for the company noted, "Our top club member spent $42,000 last year. Do you think giving her a discount will really mean anything?"
And this is what we find troubling: if discounts mean nothing to the people the stores are focusing on then are they going to remain? Or if only the "top shoppers" obtain the discounts, (and it bears repeating that the majority of these discounts are provided from the manufacturer and not the store so not only are the lower tier shoppers getting a bad deal but so are the manufacturers who give discounts in an attempt to build their customer base), what is going to happen to that segment of society that relies on those discounts just to survive? With mergers reducing competition it no longer is a matter for many people of "just shopping elsewhere".
The flip side of the coin is that being "loyal" may actually cost you more. DMNews reported that one retailer was mailing out two different versions of their catalog:
"This holiday season, L.L. Bean, which has a tradition of offering unconditional free shipping, made it conditional to some and unconditional to others. It mailed a catalog to existing customers with no offer of free shipping. A second catalog that went to prospects, however, offered free shipping with no minimum purchase required."
As retail establishments establish more data points for each customer we believe we will see more of this. After all, if you are already "loyal" to a company you won't need a discount to shop there will you? And if you already purchase a certain product there is no reason to give you an incentive, such as a coupon, is there?
The "loyalty" card free ride express is coming to the end of the line. Please use caution when exiting the train.
Do not pass go, do not collect $200
Returns becoming problematic for some consumers
In the article above Mr. Tantoco mentions that his "elite" card members enjoy special benefits when it comes to returning items. As many Americans are about to find out, returning items at stores in the U.S. is not as simple as it once was. The Return Exchange, (TRE), is a new service available to retailers that operates in a manner similar to that of credit agencies. Stores such as Limited, Guess and Staples have contracted with TRE in an effort to curb fraudulent returns.
Customers who wish to make a return at one of these stores are required to furnish their identification, (regardless of if they purchased with cash and have a receipt), which the store clerk then swipes through a machine similar to a credit card reader. If the database shows your return history to be suspect you're out of luck and the return won't be accepted. Consumers do have the ability to obtain a copy of their "return-activity report", (800-652-2331), and to correct errors but they do not state what standards are used, (the methods remain secret to "reduce fraud"), so there is no way to be able to determine exactly why your return was denied.
The company has a fairly robust privacy policy, and states they will not sell your personal information. However, it isn't quite clear whether the information that was scanned is in any way available to the merchant for their own purposes, such as in house advertising. They also note "This Privacy Policy will change as needed to stay current with privacy laws, consumer expectations, and changes in TRE’s business" which doesn't inspire confidence if TRE suddenly finds their current business model inadequate while they are sitting on a wealth of consumer information.
TRE says that signs are posted within stores ensure consumers are aware of it being used but in both of the articles below consumers were caught unaware of the practice when they went to return items. There is also no indication if the signs stores are supposed to use actually explain the program or if they are a generic, (and relatively useless), sign that just states "This store uses TRE".
Sources:
The Wall St. Journal, (Reprinted in the Deseret News)
Fortune Magazine(Subscription required to read archives).
So Long, farewell, auf weidersehen good-bye
Two stores drop card programs
We're always delighted to see stores that have decided to respect customers wishes and privacy and we were please to see two recent announcements of stores that were dropping their dreaded card programs. In the San Francisco area, PW Supermarkets dropped their card program in response to customer complaints. A notice on their web site states: "Since we opened our doors in 1943 we've prided ourselves in listening to our customers. So when you told us that you didn't want the extra hassle of a club card we heard you loud and clear.". The card still exists for those that wish to donate a portion of their purchase to local schools, but the two tiered pricing is gone.
On the other side of the nation, Florida based Kash 'n Karry is changing over stores to their new "Sweetbay" concept and eliminating the Kash 'n Karry "Preferred Customer Club card" at those locations. In this case the decision was made more on appearance than price, with company executives stating a card program didn't fit the image of freshness, variety and a fun atmosphere they were attempting to build.
On a related front, card free Statler Brothers in California had a banner year, with a 30.3% increase in same store sales. A good portion of this increase was due to the California labor dispute, but a large percentage of customers have remained after the dispute ended and sales figures remain strong. We suspect that a lot of shoppers, set in their ways as we all tend to be, didn't realize what a good thing they had around the corner until the circumstances forced them to give it a try. Another of our card free favorites, Publix continues to do well while their main competition, Winn-Dixie continues to experience drastically diminished sales and was dropped from the Standard and Poors stock registry in early December. Winn-Dixie sales have plummeted since their introduction of the card two years ago. Coincidence? We don't think so.
On the downside, Macy's is reported to have a program they call "Star Rewards" which will begin in the middle of March. While there is no mention of whether it will have a two tiered pricing scheme, the program will be geared towards giving increasing benefits depending on the amount spent, with cards ranging from Red for most people, to black for the elite members.
Sources:
Tampa Bay Online
Tampa Bay Online
Bargain hunters beware
Personal data from "Smartbargains.com" for sale
In our attempt to keep track of what is happening in the retail sector with your personal information we often come across press releases for new lists for sale. Recently the Millard Group announced a new listing for smartbargains.com. The list was described as:
"SmartBargains.com offers consumers value-priced designer apparel, footwear, electronics, jewelry, home décor and other merchandise. The average sale is $100. The file is selectable by geography, recency, gender, dollar, cumulative purchase, last purchase, multi-buyers and product categories"
We cruised on over to check out the smartbargains privacy policy to see what we could find. The first item we come to under the title of "With whom do we share your information" is this reassuring statement:
"Information about our customers is an important part of our business, and we are not in the business of selling it to others."
Of course not "being in the business of selling [personal data]" is probably true. They are in the business of selling merchandise and any other income producing schemes are secondary... Reading further down they state "Occasionally, we provide our postal mailing list (consisting of customer names and postal mailing addresses, but not e-mail addresses) to other companies whose products we believe may be of interest to you". They also state that should a customer not wish to have this information "shared" they could contact smartbargains to "opt out". The very next section, under the title "With your consent", contains only a single statement:
"Other than as set forth in this policy, you will receive notice when information about you might go to third parties, and you will have an opportunity to choose not to share the information."
Now, at this point I'm beginning to get really confused. This says you will receive notice and have an opportunity to choose not to share the information, but apparently only in situations that are "other than set forth in this policy". Since the paragraph that immediately proceeds that, (which is obviously "in this policy"), says they will provide their postal mailing list to others, it would appear you won't get any notice, and have to "opt out" if you don't want that information shared. Between the initial statement about "not being in the business of selling customer information" and the "with your consent" section it would be rather easy for a consumer to believe their information was safe, (which, oddly enough, both statements are to my eye the most prominent portions of the privacy policy... go figure), but the other statements appear to contradict that.
If you are a recent smartbargains shopper we'd love to hear from you about this. Did you get notice that your personal information would be shared? Did you read this privacy policy before placing an order? And how do you feel about the potential that the Millard Group is selling your information to others? Please write us at smartbargains@nocards.org. There is no need to "opt out" of any information sharing because we promise to keep your personal information private and if we get enough responses we'll post them, (anonymously), for the enjoyment of all.
Customers get computers, employees get... less and less
Supermarkets are spending huge amounts on technology while cutting employee benefits
With Walmart breathing down their back and sales flat or falling supermarkets are understandably worried about their future. Albertsons' is among those struggling, and the company is shooting for one billion dollars in cuts in expenditures by the end of 2005. At the same time bitter labor negotiations are being held, which included cuts in both health insurance and starting wages for new hires, Albertsons' is spending 500 million a year on technology. In the Dallas area Albertsons' 20,000 employees were recently told a "substantial number" of them would be moved to part time, in order to better serve their customers.
Supermarkets have known for some time that they can't beat Walmart on price so they must do so with service. But if you cut benefits, lower wages for new hires, and even move people from full to part time status, (which we presume results in a substantial cut in benefits such as health insurance not to mention requiring anyone that needs a full time work schedule to earn enough to pay their bills to find a second job), how can you expect them to gleefully provide "service" to the customer?
Albertsons' and Royal Ahold owned Stop and Shop apparently believe that better service is made through computers, and not through people. Both stores are gearing up to roll out shopping cart mounted computers, (which require a "loyalty" card to use), in their stores. Stop and Shop expects to have 23 stores with the "shopping buddy" installed by the end of the first quarter of 2005 and Albertson's says all 2,500 of their stores will have the "shop 'n' scan" technology within the next 18 months. This appears to be following the door opened by "UScan" devices which cut down on the number of cashiers needed, while eliminating the need for baggers and instead requiring the customer to do some of the work on their own.
Industry executives often state that card programs allow stores to know each customer, just like the good old days of neighborhood groceries. But in those days the proprietor truly knew his customers, and cared about them, regardless of how much they added to the bottom line. Technology isn't going to add "service" to the equation: it is just going to remind people how the attention of retailers has changed from truly understanding their customers and keeping them satisfied to using schemes to extract as much as possible from them at the lowest cost. And as it gets harder to find good service with people that are well paid and actually care about what they are doing, we don't see why customers would have much of a reason to shop anywhere except based on price.
Sources:
khimetrics.com
The Idaho Statesman
Yahoo Business News
The Idaho Statesman
Survey says!
BU study investigates supermarket cards
A Boston University study found that three quarters of the people in the U.S. that have a supermarket card, (and 86% do), use it nearly every time they shop even though 52% of them are worried about privacy issues. The professor who supervised the study, James McQuivey, stated:
"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."
We take exception to the use of the term "trade" in regards to these programs and believe they are more akin to extortion. For programs such as UPromise, where participation truly is voluntary and there is no penalty for a lack of participation, we would agree that consumers have made their own choice on the matter. But when supermarkets charge exorbitant prices to penalize those that don't use cards it is hardly a "fair trade". The study also revealed that 3 out of ten people still have no idea the store is compiling data on them, and also states that some stores are enhancing their customer files with publicly available data.
Retail establishments are already pushing the envelope with what consumers will tolerate and Mr. McQuivey suggests that this study will "will only embolden supermarkets as they try to squeeze ever more dollars from a thin-margin retailing environment." He suggest that the next step is RFID enabled "loyalty" cards that identify you when you walk in the door, all in exchange for your "permission" in the form of an as yet to be determined benefit.
What the study apparently failed to ask is whether people liked the practice, or merely tolerated it because they no longer had any choice. In a number of previous studies, including one conducted by Webber State University, the findings consistently showed that 2/3 of the American public didn't like these programs and didn't believe they saved them any money over previous "sale" prices, with the remaining 1/3 divided between those that liked the programs and those that had no opinion. The language of such a study can also have a huge impact on the results, and the professors enthusiasm in describing both the poll results and the model for the future suggest a less than 100% objectivity on this issue. Indeed, Mr. McQuivey has previously written an article for The RFID Journal suggesting tagging people with RFID in order to track their shopping habits, has penned articles for marketing magazines, worked as a vice president at Forrester Research where he advised mega corporations such as Microsoft and Disney, and once taught advertising management at Syracuse University.
There is one aspect of this we find hard to argue: that studies such as this will embolden the industry, regardless of how accurate they may or may not be.
Source:
i-newswire
Arms for sale
Man sells body space for permanent tattoo's
A Long Island NY man has found a novel way to pay the bills: selling space on his body for advertisers to put permanent tattoo's. This isn't the first time tattoo's have been used for advertising, but it is the first we've heard of where they were permanent, instead of temporary. So far two businesses, "pilldaddy.com" and a group dedicated to domestic diva Martha Stewart, "savemartha.com", have ponied up about $500 each for the privilege.
Two things stand out in our mind:
We also can't help but wonder what the IRS would think if you put "arms dealer" as your occupation.
Source:
CNN
CASPIAN
Consumers Against Supermarket Privacy Invasion and
Numbering
An information clearinghouse and resource for
community and national action
© 1999-2005 Katherine Albrecht.
All rights reserved.