If you own a rewards card to a department store or coffee shop, you might not be getting as many deals and freebies as you think.
Retail loyalty cards which offer points, promotions, and freebies from stores such as Starbucks, Best Buy or GameStop can track your spending habits and find ways to charge you more, according to a recent exploration by Washington Post reporter Geoffrey Fowler.
Utilizing California’s consumer privacy law, which allows users to obtain access to their data from companies as well as request their information to be deleted or not sold, Fowler took a look at the information Starbucks had on him from his loyalty card.
Fowler told WTOP that the request revealed the coffee giant had information on all of his purchases and where he made them, building a dossier of his spending habits and building a profile of him.
“Starbucks was trying to start a dossier on me and size me up, and ultimately figure out how much I would pay,” Fowler said.
It even counted how often he opened the app.
“It said one day last March, I tapped on the app more than 90 times,” Fowler said.
Fowler discovered that Starbucks was also selling his information to data brokers and that he was rewarded less, even though he spent at Starbucks more often.
“They call it personalized discounts. You might call it personalized ‘jacked up prices,'” he said.
Fowler said it’s called “surveillance pricing,” where a company figures out what you are willing to pay and charges you exactly that, noting customers who use a company’s loyalty card or app less often are targeted with more deals to entice them back.
“The opposite of what you thought was supposed to happen with a reward card was happening,” Fowler said.