Supermarket 'loyalty' cards and consumer privacy education: An examination into consumer knowledge about cards' data collection function

Developments in information technology have created new data privacy challenges for consumers. To address this growing problem, the educational community needs to determine how individuals navigate the consumer privacy landscape (Long et al., 1999), how knowledge influences people's ability to cope with privacy issues (Culnan, 1993), and how education can help consumers protect themselves (Nakra, 2001).; Since most privacy concerns involve the collection of personal data (Petty, 2000), this study focuses on supermarket "loyalty" cards, a widely used data collection device (Janoff, 2000). The data for this study was collected through a quantitative survey of 397 grocery shoppers in 5 U.S. cities.; The research is presented in a three-article format, guided by the following questions: (Q1) Why do shoppers believe stores offer card programs? (Q2) Do shoppers know that grocery cards are used to record personally-identifiable purchase data? (Q3) What factors are associated with this awareness? (Q4) Is exposure to privacy education related to knowledge of data collection? (Q5) Does subjective knowledge moderate the effect of education on objective knowledge? (Q6) How is exposure to stores' card promotion related to subjective knowledge? (Q7) Do shoppers "forget" that cards collect data? (Q8) Does exposure to pro-card promotion moderate the effectiveness of education?; The studies' major findings are: (1) Shoppers believe stores offer cards primarily to attract customers and offer discounts. (2) Only 8% of shoppers knew, without prompting, that cards are used to collect personally identifiable purchase data. An additional 17% "remembered" after being prompted. (3 & 4)This knowledge is positively associated with exposure to privacy education and higher education overall. (5) High self-assessed knowledge about cards is positively associated with retaining educational messages about cards' data-collection function. (6) On average, self-assessed knowledge increases with promotional exposure. (7) Shoppers do appear to forget that cards collect their data. (8) Exposure to pro-card promotional messages actually increases the effectiveness of consumer privacy messages on consumer knowledge.