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August 12 2013

Do You Know Your Shopper Profile?

Patrice J. Lee

We often cover stories about questionable government surveillance and tracking of the movements and habits of regular Americans. This time we’re reporting on retailers. Your favorite store may be tracking your return habits to fight crime and fraud.

Big name retailers such as J.C. Penney, Home Depot, Best Buy and Victoria's Secret employ return tracking services that create return profiles for shopper which are used to fight crime.

If this was a government agency our antennas would shoot up, but this is private industry. There is some justification in that these stealth tools, which track shoppers,  are used to stop crime which currently rings up in the tens of millions each year. But should consumers be wary?

A program director at the U.S. Public Interest Research Group explains:

"There should be no secret databases. That's a basic rule of privacy practices. Consumers should know that information is being collected about them."

And a big wig at the Federal Trade Commission agrees:

"Most people think when they hand over a driver's license that it's just to confirm identity and not to be kept to be used for future transactions. It shouldn't be that a third party is keeping a profile on someone without them being informed what's going to happen when they hand over their driver's license or some other information to a retailer."

The retail industry paints a different, less sinister picture. A spokesperson for the Retail Industry Leaders Association explained, “it's not to invade the privacy of legitimate customers at all. It's one of many, many, creative solutions out there to help combat a really big problem that affects retailers, honest customers, the entire industry and the public at-large."

Reading some of the crafty schemes of wrongdoers from stores like Home Depot reveals that criminals try to return stolen goods for store credit especially from high-end retailers. Some then turn around and sell that store credit online for cash. Furthermore, apparently organized retail crime feeds other crimes such as drug trafficking and even terrorism. It is understandable that retailers wanted to fight back.

So how does this work? Each time a shopper hands over her photo ID to have their return processed, that information is sent to a company to be catalogued as part of a shopper’s activity report at this store. If the company determines that there's a pattern of questionable returns that indicates potential fraud, it may notify the store and the store may choose to deny returns by that shopper in the future.

Consumer advocates and shoppers may be surprised and even a little disturbed by this news, but given that other private companies track our shopping habits, online searches, our social media behavior and more we shouldn’t be too surprised that they are also tracking returns. And as far as we know, the use of the information is just limited to just fighting crime which is an admirable cause. As shoppers we all pay for retail crime.

The horse is out of the gate; asking whether or not tracking should be done is moot. But what can consumers do? Since this is business rather than government, consumers do have plenty of choices.

If consumers want to continue shopping at a particular outlet, they can petition the retailer for greater disclosure by publishing their policies. Best Buy already does this. Best Buy posts signs at each cash register and on its receipt, telling consumers that returns are tracked. Best Buy is not required by government to provide this disclosure. But it knows it is good business to do so. It would be a good show of faith if other retailers would follow suit. 

Now when it comes to the government, it’s another story. Whatever one feels about government surveillance, we cannot escape it. What options for redress do we have, unfortunately are not enough. We can go “off the grid” by avoiding Twitter and Facebook. It would be difficult to stop using Google and to only shop in person and with cash. Hiding from government is a different story.

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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