Monday, June 25, 2012


I never use cash any more.  Because debit/credit cards have become so ubiquitous, rarely has this been an issue for me.  I never have to deal with loose change, or folding an unfolding wads of cash, regularly replenishing the supply with trips to the ATM.  With a quick swipe of my card, my transaction is complete.  Somewhat of an introvert, I don't have to bother with rote pleasantries.  (I once had a job bagging groceries for a supermarket, and was always amazed at the way in which the cashiers had to have the same ridiculous little conversations over and over.  There was an intense sense that the customer and cashier were operating in two very different time planes; to the customer, the transaction was a sort of "button" on the shopping experience, while to the cashier it was a check-out version of Groundhog Day.  Groundhog Shift, maybe?)

All of which makes me candidate number one for data mining, the process by which companies collect digital information from consumer transactions for all sorts of purposes.  Big-name retailers keep tabs on what purchases are made by returning shoppers, analyzing their spending habits and adjusting their marketing accordingly.  Where things get really interesting is in the concept of using this data to infer the psychology and sociology of shoppers.  As the New York Times reported a few months ago, Target hires statisticians to device ways in which customer data can be leveraged.  One such employee described how Target might know if a shopper was pregant just by her purchases, and why this was so important.
“We knew that if we could identify them in their second trimester, there’s a good chance we could capture them for years,” Pole told me. “As soon as we get them buying diapers from us, they’re going to start buying everything else too. If you’re rushing through the store, looking for bottles, and you pass orange juice, you’ll grab a carton. Oh, and there’s that new DVD I want. Soon, you’ll be buying cereal and paper towels from us, and keep coming back.”
But this got me thinking the other day.  What if Target had access to all my spending data, from every purchase I make around town?  For instance, I purchased three bicycle pumps in as many years.  The first, I believe, was at Target.  When that one broke after a couple of years I bought one at Marshall's, which broke about two months later.  At which point I splurged and paid extra for a better quality pump at the local bike shop.  What if Target was able to track this data, and then analyze how many people were, like me, not finding what they wanted at Target (or Wal Mart, or the bike shop, etc.), and adjust their inventory accordingly?  Maybe Vons carries a certain brand of cheese that is really popular, and Target shoppers are buying Target eggs and butter, but skipping the cheese.

Consumer research information has long been available that can tell companies all kinds of things about what people are buying, why and where they are buying it.  But in theory it should be possible now for a company like Target to get a hold of actual individual point-of-sale transaction info.

For a price.  Ostensibly this would be a cash cow for the credit card companies, who could sell this information, presumably through third party data-mining specialists who could tailor it and package it up for big-box businesses.  One wonders just how devastating this would be for small businesses, already hit hard by POS fees, now signing up to be further cannibalized by corporations operating at scales they can't afford to compete with.

What really gets me though, is that I have no idea if this is going on.  Are there regulations against this kind of thing?  Is there language buried in my debit card contractual agreement I likely signed at some point when I opened up a checking account that basically forfeits my right to expect any kind of privacy?

I'm not reflexively opposed to data-mining.  Part of me thinks it is fascinating.  But part of me wonders what the unintended result is going to be.  In the meantime, we ought to at least know a bit more about where our data is going and who might be using it.  I can't be the first one to propose a system of such global access to one's credit card data.

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