Chapter 1: Data Privacy in Loyalty Programs: An Exploratory Investigation

The right to personal privacy has been and remains a hot-button issue in modern society. This tenet is at the heart of the American Dream for many. However, modern technologies and methods have awakened some to a new area of concern: personal data privacy. Recent headlines have revealed that both private and public institutions actively collect and monitor personal data. As consumer citizens, the most obvious and identifiable area is the use of retail loyalty cards and their associated programs. These programs allow retailers to have access to the “who, what, when, and where” of a consumer purchase. Unfortunately, little research has been done to capture the sentiment that consumers have towards their privacy, loyalty, and the loyalty card programs they use. The following chapter provides an introductory discussion, insights, and the results of a broad-based sentiment survey on these topics. The results of the survey are then used to test several longstanding hypotheses about privacy and loyalty.