Tom Tobin

ROC

Local grocers say they tap into secure data on loyalty cards to offer better customer service.

Concerns about privacy and the ability of cards to generate much savings triggered a drop off nationwide.

Collecting data can be a boon to consumers with a store able to reach out to people personally.

Zeroing in on almond-butter lovers among its millions of customers would seem an impossible task for Wegmans Food Markets, which has 84 stores and annual sales of about $7 billion.

Last month the Gates-based grocer noted on its website that it was recalling 12-ounce sizes of MaraNatha Almond Butter, both creamy and crunchy. The traditional approach would publicize the recall through websites and press releases, include particulars like size, brand, type, along with other details, and hope for the best.

But to reach those shoppers specifically affected by a recall, Rochester's best-known supermarket chains dip into an enormous database of buying preferences that a customer contributes to each time he or she uses a store's loyalty card, sometimes called a shoppers' or club card.

When the card is scanned at places like Wegmans or Tops Friendly Markets the purchase is stored in the grocers' system with the customer's identification.

That one has a penchant for almond butter would seem a particular, private sort of inclination. Grocers and sometimes their vendors and suppliers can — and do — tap into product databases when the occasion calls for it, such as a recall, or when communicating a general emergency to the public. The database isn't the only means of notification. It just may be the best.

"It's actually a legitimate, very good use of loyalty-card data, Randy Reitman of Privacy Right Clearinghouse said of the recall contacts.

Shopper's Club

Jo Natale, Wegmans spokesperson, said its database is well-protected, governed by contractual prohibitions and subject to a company pledge to never sell the data to anyone willing to pay.

"The Shoppers Club card is a tradition for us," Natale said. "It started in 1990." Wegmans was one of the first supermarkets in the country to introduce the scannable loyalty card.

Tops Friendly Markets, like Wegmans, publishes its privacy policy on its website. It prohibits the sale of the information by anyone, though it allows use for some approved marketing purposes.

Neither Wegmans or Tops provided the number of cards it has in circulation. Hart's Local Grocer, also has a loyalty program that allows shoppers to build points for gift cards and other items. Hart's has issued 2,100 loyalty cards.

In response to questions about data collection, Tops said its information was protected and was used to benefit the consumer.

"We strongly believe in the importance of protecting our customer's information and our primary reason for collecting this information is to help deliver greater value," Diane Colgan, Tops vice president of sales and marketing, said in a statement. "We also utilize this data for other benefits like product recalls that can be targeted specifically to those we believe have purchased the product(s) being recalled.''

Supermarkets ordinarily don't ask for much compromising information on their card applications. There is no demand for a credit card or Social Security number, for example, on either the Wegmans nor Tops applications.

Yet the breadth of information gathered through loyalty cards on consumer habits and preferences would seem to be more than detailed enough to attract data brokers and marketers.

Natale said, that despite the frenzied focus on consumers in the Internet age, Wegmans has not had a lot of pressure from outside companies to sell or share what it has accumulated.

"Our policy is out there for all to read and those companies know our position," Natale said.

Another reason is that the loyalty card data, apart from the credit-card information that the markets also gather, is kept internally and closely held, making it too difficult to gather through other means.

Data mining

Collecting data can be a boon to consumers with a store able to reach out to people personally.

Kerry Davis, who owns Structural Body Systems in Victor, said she has a Wegmans Shoppers Club card. "I find it has helped the company reach out to me with deals or products that I use," Davis said.

Allowing company vendors access to aggregate data, where customers are not identified, has worked for Wegmans, Natale said. "Our vendors understand our policies," she explained.

But stores that give vendors access to more specific data than Wegmans allows may compromise the security net the stores set up. And that can cause problems.

For instance, the data breach at Target last year, which compromised millions of credit and debit accounts, was eventually traced by the company to hackers breaking into one of the vendor's computer accounts. Recently, Home Depot credit and debit card information was also subject to another attack, similar to the Target breach.

The number of circulating loyalty cards has been an issue for a long time. In 2004, students at Boston University's College of Communication found in a survey that nearly 90 percent of those asked said they had a grocery store loyalty card, and a majority had more than one store card.

In 2012, there were 2.65 billion loyalty memberships in the U.S., up overall by 26.7 percent from 2010, according to a report by the research firm Colloquy. But concerns about privacy and the ability of the cards to generate much savings triggered a drop off in memberships nationwide. Loyalty program memberships for grocers fell to 172.4 million in 2012 from 173.7 million a year earlier, according to the report.

"If programs aren't crystal clear in providing benefits in exchange for information, and are not clear in their privacy policy, consumers can back off from participating,'' according to Colloquy.

Ridding oneself of the loyalty cards doesn't offer immunity from hackers. Albertsons, Shaw's and other markets operating in the western United States dropped their loyalty cards, saying their savings were available on everything.

In June and July, SuperValu, the parent company of Albertson's, Shaw's and the others, was hit by computer hackers and data from the credit and debit cards used at many of the markets were stolen.

Wegmans and Tops say their security controls are strong, their privacy policies clear and customer information used carefully.

"I don't recall a problem with the data being misused," Natale said of Wegmans' storehouse of shopper preferences. "Our protections have worked."

TTOBIN@DemocratandChronicle.com

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