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Like a traveller haggling with a merchant in an ancient bazaar, humans have been in search of the best deal since the dawn of time.  It’s quite satisfying walking away knowing you paid less than someone else. Over the eons, the practice of negotiating the best deal has waned as new technologies emerged and pricing became more standardized.  Then, we waited in eager anticipation of the Sunday coupons, our ticket to savings. Coupons aren’t completely gone, but their use has definitely decreased with the advent of store loyalty cards. How simple.  You swipe a piece of plastic or key in your phone number and poof, your prices are instantly slashed.  Silly non-members, how stupid of you not to join.

Have you ever wondered why stores offer loyalty card discount programs?  One fairly obvious reason is the store wants you to come back. If you feel you are saving money, you will continue to shop there.  It’s enticing to see the “regular” price and your reduced “member” price right there on the product price placard.  All you have to do is swipe your card or key in your number to save that 50 cents off your paper towels.  Retirement is that much closer to realization.

This would be great if that was all that was going on here, but in reality, it’s not.  Those paper towels’ regular price may actually be an inflated price, a practice called padding, and the discount price becomes what the store would charge normally.  You won’t know unless you are comparing prices week to week within the store, and the retailers know few of us do that.  We may not actually be saving anything, but that slashed price makes us think we are.  Sneaky.

But that’s not all that is happening when you step in the store.  Security cameras.  They aren’t just there to catch shoplifters.  Some stores use them to monitor your facial expressions as you browse the isles.  This gives them feedback on what draws and keeps your attention and helps them tailor store displays, product packaging, and advertising.

Free Wi-Fi.  So nice of them to let you save your cell data. In return, they are using your phone to track your movements throughout the store.  What path you take, how long you stop to look at things, the time you spent in the store, it’s all tracked.

Finally, at the register, everything you pay for is linked to that loyalty card and tracked by the retail industries.  The brand of rice you prefer, the time of day you shop, how often you buy mustard, how much you’re willing to pay for cheese, what enticed you to deviate from your usual brands, even things like the size of your family and household income, that data is all mined and sold in the billion dollar industry of retail analytics.

The retail industry may seem like an evil empire, and in many ways it is, but not everything they do with your data is for seemingly nefarious purposes.

Your purchasing habits help them determine store inventory levels, helping to reduce food waste. The loyalty programs also use the data to tailor custom offers and coupons to send to you based on things you already buy.  It’s a way to guide your spending, but you can use these offers to boost your savings. Some, like Food Lion’s MVP program, allow you to load coupons right onto your club card.  No more coupons to clip or forget.  If your store gives you $10 off a $100 purchase or 10% off your entire order as a reward for being a frequent customer, don’t pass at jumping on those offers.  There’s no trick there.  That’s real savings.

 Also, keep on the lookout for stores that have affiliate savings programs.  Often, stores that have a Starbucks located inside will offer a free coffee after a number of coffee purchases.  It can save you money if you were going to buy a cup anyway.  And, try to take advantage of the big one, the gas station affiliate program.  Giant Food’s fuel savings can really add up at the pump as seen in a buddy’s recent receipt.

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Another little known benefit of the retailers tracking our purchases through loyalty programs is in instances of food recalls.  Lettuce, poultry, beef, or ice cream, no food is immune from contamination.  When the industry or government determines that a recall is necessary, the news and social media outlets try to spread the word, but the message can be missed.  They also notify consumers based on data from loyalty card purchases.  

We all thought the world was going to end during those several weeks that Chipotle was forbidden to sell romaine lettuce.  No one was left unaware of this national crisis.  But sometimes, the recalls don’t make the news, like in cases of perfectly untainted foods that are being recalled only for neglecting to indicate the presence of nuts, milk, or other potentially allergic reaction-inducing ingredients on their labels.  These mislabeled recalls happen quite frequently but don’t invoke a worldwide panic. If you suffer from food allergies, this notification can be potentially life saving.  For these reasons, it’s important to keep your name, phone number, and email current with your loyalty program. 

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So yes, my grocery store is tracking me.  I don’t like it, but the fact is I shop when and where it’s convenient to me.  I buy what is on my list.  If something is on sale or at a “reduced price” for members, I’ll key in my number at the register so I don’t pay the padded store price, but I’m not about to drive out of my way to save a few pennies on the dollar.  

When it comes to loyalty programs, just be aware that the “member” price may not always be a discounted price.  If you have the time and will to do it, you can definitely save more by comparing prices and shopping around for the best deal.  Be an educated consumer.  Read labels and price placards and make sure you are comparing apples to apples.  I would suggest having a few store loyalty cards to use as they are convenient to you, but don’t go crazy over advertised prices and perceived perks of membership to the point that loyalty card membership controls your purchases.

In today’s world, nothing we do is really private anymore.  If the corporate giants want to pour over my data and try to make sense of it, they can have at it.  I hope they let me know if they find a pattern.  I’d love to know what it is.

--Geoff

 

Sources:

https://www.thebalanceeveryday.com/the-truth-behind-grocery-store-discount-cards-940216

https://www.gobankingrates.com/saving-money/food/real-reason-grocery-store-members-best-deals/

https://www.grocerydive.com/news/grocery--first-responders-what-grocery-stores-do-when-recalls-happen/535213/

https://www.foodsafety.gov/recalls/index.html

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