MELBOURNE: A study has found retail loyalty card members are often unaware or concerned that their personal information may be sold on to third parties.
In a survey of 1000 people conducted by The Australia Institute in collaboration with the Department of Marketing at Monash University, Melbourne, researchers found that cardholders largely accepted that information gathered could be used by the store they signed on with. However they were not necessarily aware that this information could be sold on to third party suppliers to create customer profiles and targeted marketing campaigns.
Lead researcher Professor Steve Worthington said this could be a revenue stream for retailers.
"They are less about loyalty and more about gathering information," he said. "It is not to find out how many customers they have but a way of finding out who they are and what they buy."
Worthington said the rewards provided are not usually comparable to the value of the information that customers give. He said while they often hand over basic information, such as name, gender and address, it was information gathered on buying patterns that was predominantly of use.
The study, released this week by the Australian Centre for Retail Studies, also found that consumers without loyalty cards were in a sense subsidising those who used them. As the spending of those without loyalty cards was not rewarded, they were effectively charged more than those who did join and obtain rewards.
Worthington said consumers were generally not pressured by retailers to sign on to loyalty cards, but were often encouraged to do so. Some people refused to join to avoid giving away too much private information.
The survey gathered a sample representative of the adult Australian population by age, gender and state/territory. The respondents were sourced from an independent online provider.