Less Than Half of Consumers Are OK With Swapping Data for Deals

Pew Study Shows 47% of Those Surveyed Accept Loyalty Program Tracking and Data Sharing

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Household income was a key factor influencing whether or not people were willing to cough up data in exchange for rewards, Pew found.
Household income was a key factor influencing whether or not people were willing to cough up data in exchange for rewards, Pew found. Credit: Andrew Harrer/Bloomberg
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Lots of people belong to grocery store loyalty programs, but they're not necessarily comfortable with the way their data might be shared, says a new Pew Research Center study on consumer data and privacy. Less than half of those surveyed said it was acceptable for companies to share their shopping data with third parties.

Indeed, while 47% said it is acceptable for a grocery store to track shopping habits and sell that data to third parties in exchange for providing people with discounts, 32% said it was not. Twenty percent said "it depends."

"The 'selling to third party' part makes me worry," said one survey participant, before acknowledging, "[On the other hand], I have and frequently use a Safeway rewards card, which I suspect has just such an agreement."

Pew surveyed 461 U.S. adults in addition to conducting online focus groups with a total of 80 panelists about a year ago for the study.

Older people were even less tolerant of the loyalty exchange, Pew found. Among those 50 and above, 39% said they would not accept the deals-for-data sharing exchange that defines today's sophisticated loyalty programs. Meanwhile, 27% of those 18-49 would not be OK with the scenario.

In addition to age, household income was a key factor influencing whether or not people were willing to cough up data in exchange for rewards. Pew found that 56% of people with household incomes under $30,000 believed swapping data for deals was acceptable, while 43% of those in higher-earning households said the same.

The study suggested some people just want more information before deciding. "How much money would I be saving, and how much personally identifying information will be shared?" asked one survey participant. Another inquired, "How many third parties will you be sharing with? Can I control what info is shared? Is it just my anonymous shopping data, or is my personal info attached?"

Despite the fact that countless people join loyalty programs and some of them understand that at least some of their shopping behavior will be tracked as a result, skepticism of the data-for-deals value exchange remains.

During a Federal Trade Commission event on privacy issues held Thursday in Washington, D.C., academics from the Annenberg Public Policy Center, Annenberg School for Communication and University of New Hampshire presented research suggesting that Americans are less comfortable with exchanging data for discounts than industry purports. The researchers found that 57% of people agreeing to allow data collection in exchange for supermarket discounts were "resigned" to the concept, while 32% called themselves "tradeoff supporters."

"By misrepresenting the American people and championing the tradeoff argument, marketers give policymakers false justifications for allowing the collection and use of all kinds of consumer data often in ways that the public find objectionable," their report said.