Retail Notebook: Plastic cards -- privacy vs. convenience

Take a quick look -- there's the Costco membership card, your Safeway club card, your Nordstrom or Bon credit card, a movie rental card and maybe even a Starbucks debit card.

Add to that your Visa, MasterCard or American Express cards, your debit card, maybe a frequent flier or a hotel rewards card.

Before you were awarded one of those convenience cards, chances are pretty good that you handed over some of your personal information -- and some of your privacy.

On top of that, each time you swipe the card at the store, information is collected about your purchase -- maybe how far you traveled to reach the store, and how many times you had been there before.

It seems innocent enough. Most of us know that the information will be given to other retailers and that we'll get more catalogs or credit card solicitations in the mail.

Most companies offer incentives to their cardholders. Some companies call them rewards. At Nordstrom, each time you rack up $2,000, you get a $20 credit toward your next purchase.

More cards are coming all the time.

Costco, which requires you to become a member before you are allowed to shop there, is planning to launch another card that can be loaded in advance with cash and used like a debit card.

It just makes shopping easier for the customer, right?

Some privacy proponents say there's a lot more at stake when you swipe your card in the store.

Katherine Albrecht, who launched www.nocards.org in 1999, views the cards as "conditioning devices." A whole generation is growing up not giving a second thought about the tracking and recording of their movements, she said.

Albrecht wonders why people who would object to registering for a national identification card in the wake of the terrorist attacks don't flinch at the tracking of their grocery store purchases.

Grocery store cards are a particularly sore subject with Albrecht, but she added, "We oppose anything that is non-optional."

Safeway loyalty cards, for example, are non-optional, she said. If you don't have a card, you don't get the "club" member price, and you pay too much for your groceries when you shop there.

In the future, Albrecht envisions health insurance companies partnering with the grocery stores. Their mission, ostensibly, would be to help consumers make healthy food choices.

But who knows, she speculated: They might also use your shopping data to deny you health coverage -- if they discover you shop too often for cigarettes, red meat, potato chips, margarine or whatever is the health risk of the moment.

An easy way to avoid the whole dilemma, of course, is simply not to shop at the store, and don't sign up for cards.

Most companies have lengthy privacy policies that outline what they plan to do with the information they collect. If you don't like their plans, many allow you to "opt out" of the information-sharing.

It's up to the consumer however, to wade through the fine-print policies and find out what they have to do make sure their information isn't shared.

Usually its as easy as writing to the company or calling a toll-free number, or marking a box before you sign on the dotted line.

A new Harris Interactive poll on privacy found that 83 percent of the 1,592 people surveyed said they would stop doing business with a company entirely if they heard or read that the company misused customer information.

Most businesses make no secret that they collect and record information about the purchases you make with your card.

Whether they save the information or share it with anyone else varies by company.

There have been instances in which stores were required to provide personal information on specific customers to police, investigators or attorneys.

"Our records have been subpoenaed in the past," Safeway spokesman Brian Dowling said.

"We turn them over. We are required by law to do so," he said. "It isn't something that happens very often. We are careful to check that there is the force of the court behind the request."

Dowling declined to say how many people carry Safeway club cards.

Starbucks said recently that it activated 2.3 million cards in the first five weeks it started offering them in November.

No one is really worried about the Seattle-based coffee company counting how many lattes or espressos someone buys each week, and whether they get a brownie with it. Who cares?

Starbucks has much bigger plans for the card. But Starbucks officials aren't saying exactly what they are planning.

The company said the card is going to be an integral part of its strategy. It has already been bombarded by officials with companies wanting to partner with it on the card.

"It is early in the thinking stage," Starbucks President Orin Smith said recently. "What we would like to do is offer incentives to our customers."

Smith said Starbucks doesn't collect personal information on its cardholders, and doesn't save any information it does gather.

There are steps customers can take to make sure their personal information stays personal:

Don't sign up for offers, cards or contests.
Use cash instead of cards.
Before signing up for any card, read the company's privacy policy.
If the company has an opt-out provision, consider using it.
Do business with companies you trust will respect the information they gather on you.

"The first thing consumers should immediately ask is what the company plans to do with the information they collect," said Matthew Ellis, a privacy expert with Ernst & Young, which provides business services.

"Trust is an important step. Before you sign up, you have to have a trust level and believe in the organization that you are doing business with."

Retail Notebook is a Saturday feature by P-I retail reporter Kathy Mulady. She can be reached at 206-448-8131 or kathymulady@seattlepi.com

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