'Tis the season for returns

Chris Hoofnagle at EPIC West is today discussing the use of drivers' license swiping and returns tracking database Verify-1. The database tracks your returns and categorizes customers based on whether they "abuse" returns. He raises an interesting point about the database and how it may fit in American consumer reporting laws:

EPIC West: Electronic Privacy Information Center West Coast Office: Return Exchange Database Tracking:

... The Return Exchange database skates right on the edge of the Fair Credit Reporting Act's definition for a consumer reporting database. If Return Exchange is sharing data on consumers across retailers (not just across chains within a certain retailer), the data it issues will be a 'consumer report,' and all sorts of rights will kick in to protect shoppers. Until then, a big black box system will have your driver's license data and make decisions about you with no transparency. ...

The same conclusion may apply with respect to similar provincial laws in Canada.

Incident: Shoe chain says customer data stolen

A shoe store chain in the US is reporting that their systems were compromised, resulting in the theft of customer credit card information, according to MSNBC:

MSNBC - Shoe chain says customer data stolen:

"COLUMBUS, Ohio - Credit card information from customers of more than 100 DSW Shoe Warehouse stores was stolen from a company computer's database over the last three months, a lawyer for the national chain said Tuesday.

The company discovered the theft of credit card and personal shopping information on Friday and reported it to federal authorities, said Julie Davis, general counsel for the chain's parent, Retail Ventures Inc. The Secret Service is investigating, she said...."

Online retail alliance set up to lobby on privacy, taxes and other online issues

Major online retailers, including eBay and Amazon, have joined forces to create an industry alliance to lobby congress and other legislators on issues such as privacy, internet access, taxation of online purchases and others. The publicity associated with the launch does not suggest the position they are likely to take on privacy, so stay tuned as the group will have its first meeting in the near future. See: TechWeb | E-Business | Major Online Retailers Form Lobbying Group.

The new era of retail wants to be the old era of retail

Yahoo News is carrying a story on the use of wireless technology in the retail environment, Yahoo! News - 7-Eleven Adopting Wireless Technology. The focus is on 7-11 and slurpee inventory management, but there is a very interesting quote in the middle of the article:

"'Retailers are trying to get back to where they were in 1905,' said Cathy Hotka, a retail consultant in Arlington, Va. 'Back then they knew you, knew your credit, knew what you wanted to buy and how to stock it.' "

It is an interesting observation and I have little doubt that it is true. But today, I am not sure that this 1905 paradigm is what the shopper is looking for. Back then the relationship went both ways. Your local general store knew about your business, but the consumer knew the owner of the general store and most of its activities were out in the open. He wouldn't dare do anything nefarious with the customer's information because the customer would simply walk. It's a matter of trust. I think some retailers can get back to "where they were in 1905", but they have to do it with transparency and earned trust.

Air Miles should be about data mining, not mass appeal

The President of the Air Miles program in Canada recently spoke in Vancouver, suggesting that retailers are missing out on the true benefit of his loyalty program. It's not being able to say "hey, we give you Air Miles so shop here", but rather to build a more intimate relationship with your customers (via data mining):

Retailers missing the point of loyalty reward programs, Air Miles head says - Yahoo! News

VANCOUVER (CP) - Retailers have lost their way and have become too focused on using loyalty reward programs as a currency to attract customers, says the president of Air Miles.

Bryan Pearson says most retailers are neglecting the wealth of shopper data that is collected by the programs that could be used to better market to their customers, which was one of the purposes the program was created in the first place.

"Points are really viewed as discounts or an alternative way to get something extra and that's not a bad thing, but I'm not sure it's sustainable in the long run," Pearson said in an interview Thursday.

Privacy and loyalty programs: What information consumers don't want to share

A recent survey by the NRF Foundation polled US consumers to see how much personal information consumers are willing to give up in exchange for benefits as part of loyalty programs. The results are interesting, since they show what information is considered most personal by consumers:

...While consumers do want to pledge their loyalty, retailers are going to have a tough time figuring out just how to build their allegiance. That's because consumers state they are only willing to share a small portion of the much needed personal information that retailers need to develop traditional loyalty programs. According to the study, the most acceptable information shoppers were willing to give retailers include their name (89.8%), e-mail address (78.1%), street address (60.7%), and past transactions (46.8%). Consumers were least likely to allow retailers to track weight (14.4%), income (12.5%), job title (12.1%), employer (10.9%) and net worth (8.2%).

The more intrusive a company wants to get, the greater value they have to provide. This also suggests that a company that wants a widely-adopted program will have to limit the information collected and provide assurances about how it will be protected and used.

Via CRM Today.

Technorati tags: Privacy :: Retail :: Loyalty Programs :: Personal Information

Behind the curtain: Why retailers ask for your personal information and what they do with it

The Saginaw News ran an interesting feature-length article in its Sunday edition about privacy in the retail system. It touches on loyalty programs, RFID, advertising and security of personal information. And it is balanced, with good comments from both business and privacy activists. Check it out: A peek into your privacy: Retailers increasingly ask for personal information.

[Personal Information] :: [Privacy] :: [Retail]

Privacy compliant merchandise return policies

David Canton's weekly column in the London Free Press is devoted to implementing privacy-respectful merchandise return policies, following a recent decision from the Alberta Information and Privacy Commissioner that faulted two retailers. See: Return policies changed.

Most online retailers aren't there yet on new payment card security standards

In a recent survey of online retailers, only three percent have reported to passed the assessment and external scan needed to comply with the Payment Card Industry Data Security Standard, which became mandatory on June 1, 2005. A quarter of the vendors haven't even started yet while the majority are in the process.

Sounds a lot like the state of PIPEDA compliance in 2004.

See: InternetRetailer.com - Daily News for Tuesday, January 3, 2006.