Shoppers should be wary about handing over personal data. Photo: RNZ
We're used to handing over our details in return for loyalty rewards - but what if all you're getting seems to be marketing emails?
A growing number of shops ask customers to provide their phone numbers or email addresses when shopping in-store. But being 'in the system' sometimes offers little more than an ability to track purchases or have an emailed receipt.
Bodo Lang, a marketing expert at Massey University, said it was common.
But he said shoppers should be wary about handing over personal data.
- Do I have to use my KiwiSaver to pay for my partner's care? Listen to No Stupid Questions with Susan Edmunds
"Unless there is a clear benefit and no obvious risk, it may not be worth doing. In many cases, businesses collect customer data even when there is little or no benefit to consumers, and in some instances, it can even disadvantage them."
He said there were two ways customer data could be used.
The first was to send them marketing messages, such as emails and text messages.
"While this may be in the interest of consumers, it may also lead to a clogged inbox and over-consumption.
"The second is more subtle and arguably more concerning. Businesses can analyse customer data to understand and influence buying behaviour. For example, businesses can learn the price points at which customers are most likely to purchase a product and how far prices can rise before demand drops. Such insights allow firms to optimise profits but may conflict with consumer interests.
"An example is the growing use of electronic pricing systems, which enable businesses to adjust prices dynamically based on data insights. While this may increase efficiency and profitability, it also risks creating less transparent and more unpredictable pricing for consumers."
Bodo Lang, a marketing expert at Massey University. Photo: University of Auckland
Retail consultant Chris Wilkinson, of First Retail Group, said being emailed receipts could be handy for returns and warranties.
"Common aspects that can impact customer experience if things do go wrong."
Retailers could also communicate their deals.
"Yes, they will definitely be using the information for some analysis - similar to supermarkets, but I think most people have rationalised that now - and with big operators they are well-versed in how they behave with that information."
He said retailers had increasingly been using customer phone numbers and email addresses to improve customers' experience and shoppers generally accepted it.
Retail consultant Chris Wilkinson, of First Retail Group. Photo: ( Supplied )
Lang said he had noticed it recently at Rebel Sport, which is owned by Briscoe Group.
A spokesperson for Briscoe Group said people signing up to the club received perks including a $10 off welcome offer, access to member-only deals and club events, the opportunity to win prizes, and voucher offers throughout the year.
But she said it would also update the club this year to allow customers to earn a larger reward.
Request for details may break law
A commercial law expert at the University of Auckland Alex Sims said people could unsubscribe to emails they did not want to receive, and businesses had five days to stop sending them before the Unsolicited Electronic Messages Act was breached.
"I suspect that some retail workers may be told to ask something along the lines of, 'can I get your email address, so I can send you the receipt'. That means you are not told that you are signing up to their programme or email list.
"If you agree to this and you are later sent marketing emails, then both the Privacy Act 2020 and the Spam Act have been breached. Under the Privacy Act's IIP 3, the agency - so the business - must tell the individual the purpose for which the information is being collected. So, if the person is being told that it is to send them an invoice and the business sends them marketing emails, that's a breach of the Privacy Act, ie IIP 3. Also under the Spam Act, you need the person's consent to send them emails, which the business wouldn't have in this situation. This situation would require people making a note of what they were told by the retail worker."
A senior investigative journalist at Consumer NZ Chris Schulz said even schemes that offered rewards were often giving people little in return for their information.
"We ran a ruler over some of New Zealand's biggest schemes and were generally disappointed. We think, if you're handing over your data - the reward has to be good.
"We're concerned that loyalty schemes have become a way for companies to track consumers under the guise of offering rewards. While some schemes may not offer rewards at all, they may be valuable in other ways - such as providing your transaction history. Although if this information is available to the retailer, it should be easily accessible to the consumer, too.
"Ultimately, it comes down to what value you place on your privacy and how comfortable you are with the trade-off. If there's no clear reward, it's worth asking yourself who's really benefitting from your loyalty."
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
