spending

How Retailers Track Customers Online and Offline

When stores track your shopping, you get discounts and they get your personal info.

Kiplinger's spoke with Joseph Turow (pictured above), a professor of communication at the University of Pennsylvania and author of "The Aisles Have Eyes: How Retailers Track Your Shopping, Strip Your Privacy, and Define Your Power," about some of the various ways your favorite retailers may be tracking you.

Why are retailers tracking us? They want to send messages to customers based on their history with the store, their location in the store and their value to the store. For example, a store may see that you're near the women's shoe department and know that you’ve purchased shoes there before. It then sends you a text message or an advertisement via the store’s app on your phone offering you 20% off if you buy shoes in the next hour.

How do retailers track their customers? Inside the store, many retailers—particularly the largest chains—use devices called beacons, which connect to your phone's Bluetooth signal. Stores can also track you through your phone's Wi-Fi connection. Outside the store, retailers can track you with GPS. If you're near competitors, for example, retailers might send you advertisements or coupons to lure you to them instead. When you use a frequent-shopper card, you allow a company to collect data about what you buy, too.

Can customers use any tricks to get discounts? If you save a coupon on your phone to use in a store, keep it there for a while. Or when you're shopping online, put something in the cart and leave it there without buying. If the store thinks you're not going to act, it may offer you a larger discount.

What else do stores do with the information they collect? If you look at companies that sell marketing data, such as Acxiom and Experian, a lot of what they have comes from retailers. A store might, say, sell information about which over-the-counter drugs you buy to a company that wants to sell you insurance.

What's the harm? There are winners and losers. In a way, we're back to the era of peddlers, who used what they knew about customers to charge them different prices or show them different items. Some companies might want your business because of your salary or how much you spend. But if you're not valuable to a store—say, because you only buy bargains—it will ignore you.

How can customers protect their privacy? If you don't want to be tracked in a store, shut off Wi-Fi and Bluetooth connections. Avoid using the store's app, participating in its loyalty program or paying with a credit card.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked
stocks

The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked

The Berkshire Hathaway portfolio is a diverse set of blue chips, and increasingly, lesser-known growth bets. Here's a look at every stock picked by Wa…
November 16, 2021
The Case Against Owning All Dividend-Paying Stocks in Retirement
investing

The Case Against Owning All Dividend-Paying Stocks in Retirement

Income investors are often all about dividends, but that may not be a smart strategy for retirees. Here’s why, and what investment model they should c…
November 8, 2021

Recommended

Honey, We Need to Talk About Money
Women & Money

Honey, We Need to Talk About Money

Instead of focusing on the numbers, couples might have more success discussing their goals.
November 24, 2021
Best Black Friday Deals at Costco
Costco

Best Black Friday Deals at Costco

The venerated warehouse chain unleashes holiday bargains in hopes you’ll also snap up Costco’s Kirkland Signature house-brand line of goods as well.
November 23, 2021
28 Great Black Friday Deals and Doorbusters for 2021
Smart Buying

28 Great Black Friday Deals and Doorbusters for 2021

We’ve rounded up dozens of bargains from top retailers including Amazon, Costco and Walmart, but you’ll need to act fast; many of the more popular ite…
November 17, 2021
Smart Money Moves to Make Before Year End
Financial Planning

Smart Money Moves to Make Before Year End

You can take action now to lower your taxes, save money and enhance your finances for 2022.
November 15, 2021