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Loyalty Cards: How Much Do You Want the Establishment to Know?12 July 2006
There's something in it for the merchant, too. Early on, that something was competitive advantage. An incentive for clientele to keep coming back. Why shop where goods and services were the same but rewards for spending the money were absent? Over time, as the cards became ubiquitous, this became a lesser factor.
Businesses ultimately pay for perks given to patrons. So they must have another
impetus to support these programs. Otherwise, the cards would go the way of
those yellow, green, and other trading stamps people used to paste into little
books and redeem for toasters or blenders. The cards, along with information
about what's being bought, let suppliers build extensive data bases describing
particular consumers. These, in turn, help them rate individuals as to their
revenue potential and act accordingly.
Astute solid citizens will have made a connection between shoppers' loyalty cards and those they shove into the slot machines or hand to the pit bosses at the casinos. To players, they're the keys to coveted amenities from free meals and show tickets to invitational tournaments and membership in hoity-toity clubs. To casinos, they're means of tracking patrons' activity.
When a card is in a slot machine, a person's data base is continually updated to show the amount bet, at what rate, and for how long a duration. Combining this with the edge on the machine tells the casino the bettor's profit potential. To determine not only the comp credit to issue, but also how much it's justifiable spending to attract that person for another visit.
The cards are also used at the tables. Right now, mainly to facilitate identification
because the gambling data are largely still gathered and input manually. Pit
personnel estimate or use standard figures for bet size, speed of play, and
in games like blackjack or craps where edge depends on strategy house advantage.
The result is that players fuss about comped too little while casinos fret over
giving away too much.
One of these technologies involves miniature "radio frequency identification" (RFID) equipment in the chips, cards, and table tops. The transponders are similar to the E-Z Pass devices that let drivers roll through toll booths on the highway. Another approach uses optics and works something like bar code systems.
Is capacity for data collection and processing all sweetness and light? The public today accepts it, mainly or exclusively for the benefits received. But privacy issues loom when comprehensive data are readily accessible to private organizations and governments alike. We could do worse than wonder about the current relevance of Charlie Chaplin's admonition in "The Great Dictator," the 1939 film: "We have developed speed, but we have shut ourselves in. Machinery that gives us abundance has left us in want. Our knowledge has made us cynical; our cleverness, hard and unkind. We think too much and feel too little. More than machinery, we need humanity." The poet, Sumner A Ingmark, may be anticlimactic after Chaplin. But here he is, anyway.
Be careful what you ask for, you may get it.
And having what you asked for, may regret it.
Best of Alan Krigman