What You Need to Know About Your Grocery Store Discount Card

Major supermarket chains first introduced VIP and preferred shopper cards in the 1990s, and they caught on like wildfire. Shoppers like them because they get special pricing on selected items throughout the store without the chore of collection coupons. Supermarkets like shopper cards because they keep customers coming back. But they serve an additional purpose. Every time you use your shopping card, you're disclosing information about your buying habits to the store.

Your Buying Habits

Buying baby food? Your store may make you a "special offer" on diapers or offer a discount on a child-care book. Loading your cart with cupcakes and candy? The store might send you information about its "healthy eating" options.

Retailers call this database marketing. Merchants use it to learn about the kinds of customers who shop in their stores and to target consumers who shop in their stores and to target consumers with advertisements in the mail. They claim that the use of database marketing allows them to improve the service they provide, to stock their shelves with more of the goods consumers want, and to develop customer loyalty.

What's the harm in it? Some critics cite these potential problems:

Grocery chains may sell or give information about your buying habits to other merchants and marketers. Although most supermarket operators claim that they have no intention of doing this, there is nothing to stop them if they want to.

Law enforcement authorities may subpoena shopping-card records in the course of investigating suspected criminal activity. In several states, Drug Enforcement Administration agents have subpoenaed records to review customer purchases of certain cold medications that contain an ingredient used in the manufacture of illegal drugs.