Loyalty Card Lawsuit Questions Retailer’s Responsibility

Jun 28, 2004

By John Hennessy

Do loyalty program operators have a responsibility to safeguard the well-being of program members? That question may be answered in a Seattle court.

As reported by Connie Thompson on KOMOTV.com, a Seattle area Superior Court ruling says a shopper can go forward with her lawsuit against the QFC chain, operated by The Kroger Company, over its failure to notify her personally about potentially tainted meat she bought in December.

The plaintiff maintains that QFC was negligent about warning consumers, especially those holding its QFC Advantage Card which tracks not only the customers’ purchases but also their names, addresses and phone numbers.

“I think it’s the first of its kind,” said attorney Steve Berman, adding the case should be precedent setting.

Berman likens loyalty card databases to the information car manufacturers use to alert you about safety recalls.

A Safeway spokesman told KOMO 4 News that, “The best outlet (to reach possibly affected customers) is going to the media first, and use television, radio and newspapers. No matter how much (information) you have in the database, the best way to immediately reach customers is through the news media.”

Moderator’s Comment: Is there a shopper-focused marketing opportunity for a forward thinking retailer to add proactive
notifications to its loyalty program benefits?

I hear from shoppers all the time that they want their retailer to do something with the personal data they are collecting. While these shoppers haven’t
mentioned notifying them of product recalls or health issues, it may be something they would view as a benefit. It would certainly demonstrate that their retailer is willing to
work on their behalf.

Given the choice between a retailer who uses loyalty card data to notify shoppers of food supply issues and another who barely uses the data to support
targeted marketing, which retailer do you think will win the hearts and minds of shoppers?

This appears to be a real issue. The right answer should include consideration of how shoppers can be best served.
John Hennessy – Moderator

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