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Guest commentary, by Rick Ferguson, Editorial Director,
If there was ever any doubt among U.S. grocers that customers have seen through the two-tiered discount shopping cards that have dominated grocery loyalty strategies for the past few years, a prank perpetrated by a Sacramento, CA. Web site designer may change that.

Through his Web site, Rob Cockerham has made it his mission to thwart the aims of the Safeway Club Card. The card, which offers members access to price discounts unavailable to those who choose to shop without it, has created the "Ultimate Shopper" card on his Web site. Cockerham will mail his site visitors a peel-off sticker with the printout of the bar code from his own Club Card. By placing the bar code sticker over your own Club Card bar code, you can join a network of shoppers who have banded together to create a single "Ultimate Shopper" with tremendous buying power. Thus far, about 300 Safeway shoppers have joined in.

"I like using the Internet in a way that forms a community, or encourages community activity," Cockerham told Wired magazine, "and those (ways) aren't always pro-business."

Cockerham's Web site isn't the only anti-shopper card scheme running, either. Another Web site promotes an electronic "identity swap" program for members of the Baltimore and Washington, D.C., area Giant supermarket chain's program. Participants enter their card numbers in a form on the site and then print out and paste onto their cards someone else's bar code.

Most of these prank-style protests are designed by activists who protest against the perceived invasion of privacy by grocers who collect data on shoppers through the discount cards. But if these protesters looked a little closer, they'd see that the invasion of privacy isn't the real issue. Grocers, after all, adhere to strict privacy policies that foreswear the selling of purchase information to third parties, so the potential sale of data isn't an issue. Possible abuse of the information by government subpoena for criminal trial is always a potential threat, but it isn't in the grocers' interests to roll over for Big Brother, either.

Here's the real issue: how often do members of typical U.S. grocer discount card programs get offers based on their prior purchase behavior?

Uh, try never.

There is no value to the customer who allows his purchases to be tracked other than the lower prices, which he should be getting anyway. That it is such an easy task to swap identities and thwart the purchase-tracking aspect of these programs points out how little attention the grocers pay to the customers behind the data.

These online scams prove only that customers have seen through the hollow value proposition behind these programs. Discounts don't cultivate brand loyalty, and when a Wal-Mart supercenter opens up next door, a generic discount card isn't going to keep good customers from jumping ship for the lower prices available to them without the cards. Loyalty is about value exchange and dialog, not about jumping through hoops. These online scams just offer additional proof.
KC's View: