Web Coupons: Friend or Foe

Web Coupons Know Lots About You, and They Tell. For decades, shoppers have taken advantage of coupons. Now, the coupons are taking advantage of the shoppers.

A new breed of coupon, printed from the Internet or sent to mobile phones, is packed with information about the customer who uses it. While the coupons look standard, their bar codes can be loaded with a startling amount of data, including identification about the customer, Internet address, Facebook page information and even the search terms the customer used to find the coupon in the first place. And all that information follows that customer into the store.

Using coupons to link Internet behavior with in-store shopping lets retailers figure out which ad slogans or online product promotions work best, how long someone waits between searching and shopping, even what offers a shopper will respond to or ignore. The coupons can, in some cases, be tracked not just to an anonymous shopper but to an identifiable person.

Using coupons also lets the retailers get around Google privacy protections. Google allows its search advertisers to see reports on which keywords are working well as a whole but not on how each person is responding to each slogan. Google has built privacy protections into all Google services and report Web site trends only in aggregate, without identifying individual users. The retailers, however, can get to an individual level by sending different keyword searches to different Web addresses. The distinct Web addresses are invisible to the consumer, who usually sees just a Web page with a simple address at the top of it.

While companies once had a slim dossier on each consumer, they now have databases packed with information. And every time a person goes shopping, visits a Web site or buys something, the database gets another entry. None of the tracking is visible to consumers. The coupon can also include retailers’ own client identification numbers (Jill Jones might be client No. 67543289), then the retailer can connect that with the actual person if it wants to, for example, to send a follow-up offer or a thank-you note.

The companies argue that the coupon strategy gives them direct feedback on how well their marketing is working. Once the shopper prints an online coupon or sends it to his cellphone and then goes to a store, the clerk scans it. The bar code information is sent and analyzed. Many say they avoid connecting that number with real people to steer clear of privacy issues, but you the consumer can not make that match.

The retailer can also make that connection when it is offering coupons to its Facebook fans. The coupon efforts are nascent, but coupon companies say that when they get more data about how people are responding, they can make different offers to different consumers.

Already, there is no lack of examples where people have fallen prey to "too-good-to-be-true" offers. One case in point was an iPad scam which promised users they could sign up as iPad testers and keep the device for free thereafter. The scammers were, in fact, harvesting mobile numbers for subscription to a premium-rate cellphone service.

Companies can “offer you, perhaps, less desirable products than they offer me, or offer you the same product as they offer me but at a higher price,” said Ed Mierzwinski, consumer program director for the United States Public Interest Research Group, which has asked the Federal Trade Commission for tighter rules on online advertising. “There really have been no rules set up for this ecosystem.”

That alarms privacy advocates. In any case, the solution to avoiding such scams is, in reality, very simple, read the privacy policy, if it isn't clear or you can't find it, why not simply forgo the discount? The general rule of thumb is if in doubt, leave it out.


via nytimes.com