Time to end loyalty card schemes

Am I alone (distraction: how many rants start like this?) in thinking that few of the trappings of the modern world are as annoying and deeply insidious as the loyalty card? Every shop in the high street offers one, it seems, so it can’t be a bad thing, or they wouldn’t get away with it, would they?

“Do you have a loyalty card,” they twitter. I’ve just encountered the final straw – hence this posting.

On the face if it, what’s not to like? You give the organisation your name and address, they send you a card, and you get a percentage point or two off your shopping. In these hard times, many a mickle makes a mackle.

But they never tell you the whole story. They will never come out and say that, if you subscribe, the company will bombard you with offers that, based on your spending patterns, they think you will want. Well, maybe you will, maybe you won’t, but would you rather not make those choices at a time of your own choosing, under your own steam as it were, rather than being manipulated by some marketing droid or, worse, by some marketing algorithm deep in a data centre somewhere?

If those cards weren’t worthwhile to administer, then companies such as Tesco – feted in marketing circles as among the most successful deployers of such schemes – wouldn’t do it. The reason it’s worth it is not because they get their hands on your spending patterns, which of course they do and which raises other issues – see below – but also because you spend more. Each marketing mailout increases demand for whatever it is that’s being pushed at the consumer.

So whatever discount you’re promised, you’re almost certain to have blown it out by buying more stuff you wouldn’t have bought had the scheme not been in place. That’s more profit for Tesco.

What’s more, the cost of the scheme is offset by hiking prices, as demonstrated by the Morrisons chain of supermarkets which cut prices when it abolished its loyalty card scheme back in 2004. and Asda told the Daily Telegraph it wouldn’t be implementing a scheme because: “It would have cost £60m to set up and £20m to £30m a year to maintain.”

But more fundamentally important is the loss of privacy that these cards entail. As the Telegraph feature referenced above reports, one campaigner likened having a loyalty card to walking around with a barcode stamped on your backside.

What I buy is my business, not that of a marketing programme. The data my buying provides means that more snippets of data about me sit in the public domain, waiting for some future organisation to hoover up and use in ways as yet unspecified.

Those who made this argument ten years ago were shouted down as paranoid. But today, with the growth of huge databases, accessible worldwide, as companies amalgamate and share data, and as basic security issues – such as not walking around with databases on a device liable to either theft or absent-mindedness, such as a laptop of USB memory stick – seem to be beyond either commercial organisations or the government, it behoves us all to hang onto those snippets.

Piled up in one place, a lot of snippets make a profile. Many a mickle makes a muckle.

EU takes the Janus position

The UK government has on many occasions shown itself to be more interested in spying on its subjects than on fixing the recession — and this week’s no different but the European Union seems with one hand to be aiding and abetting such activity, and with the other hand, bashing the UK round the head for something similar.

This week brings us news that the European Union has followed up its threat of legal action against the beleaguered New Labour administration by instating a case against the UK for allowing BT to test Phorm’s deep packet inspection and behavioural advertising. Customers were unaware that their data was being examined by BT for commercial purposes.

As a result, the EU has told the UK that it must comply with the EU Directive on privacy and electronic communications, which is equivalent to a legally enforceable requirement, and which mandates that member states must “ensure confidentiality of communications and related data traffic data by prohibiting unlawful interception and surveillance” unless the users concerned have consented.

The legal case follows numerous letters, to which the UK government responded that it was happy that the Phorm system meets European data laws, and then ignored further requests for clarification.

On the other hand however, the EU’s Data Retention Directive has provoked widespread condemnation. This compels member states to store users’ communication information for a full year starting on 15 March 2009. It means that every email, phone call and text message sent or received will have to be recorded.

The thinking behind it is that: “retention of data has proved to be such a necessary and effective investigative tool for law enforcement in several Member States, and in particular concerning serious matters such as organised crime and terrorism, it is necessary to ensure that retained data are made available to law enforcement authorities.”

That’s despite the assertion in the directive that, in a democracy, “everyone has the right to respect for his private life and his correspondence”. It does however go on to say that the directive: “relates only to data generated or processed as a consequence of a communication or a communication service and does not relate to data that are the content of the information communicated.”

In other words, it’s the contact not the content that will be stored — although this does include your user ID, IP address, DSL line (where appropriate) and the date and time of contact.

Even so, it seems contradictory for the EU to be lambasting the UK for spying on Internet traffic, while on the other hand it’s insisting that your phone bill be made available to the local police forces.