Shoppers Club Raises Concern on Personal Privacy

Jorge Gomez says answering a couple of questions was a small price to pay to win $500.

Every week he and thousands of shoppers at The Plaza at West Covina slide their free, mall-issued “Plaza Players Club” cards into new ATM-like machines in hopes of winning cash, vacations and other prizes.

But there’s a catch.

Prospective members must fill out an application that asks for their address, the ages of family members and income level. And each time members use the machine, they are asked two more questions about personal details, such as reading habits and plans to purchase cars or jewelry.

The information is fed into a a computer databank that creates profiles on cardholders, who must be 18 or older to join the Players Club. About 13,000 shoppers have joined the club, the first of its kind in the nation, since the mall started it four months ago.

Although marketing and retail experts praise the club as an imaginative way to draw shoppers to the mall, the comprehensive computer file on customers alarms consumer rights advocates, who say the information can be used in ways shoppers never intended.

The mall “asks more questions than the FBI,” quipped Gomez, a retired U.S. postal worker and La Puente resident who plans to give his winnings to family members.

But he doesn’t mind. Other retailers, he said, “are getting this information on you when you buy things, and you don’t even realize it. At least with the mall I got something in return.”

The mall’s operators say the program will help build customer loyalty, shoring up business that has been siphoned off by neighboring malls. Shoppers, they say, will benefit from the discount coupons and prizes awarded daily, as well as the weekly $500 drawing.

Marketing and retail experts say the club is a valuable marketing tool because it enables the mall to gear advertising to the specific interests of shoppers. And, they say, it will help reduce junk mail.

But consumer rights advocates and computer technology watchdogs warn shoppers to be wary of surrendering personal information to marketers.

“You can imagine that through a program like this malls could develop a pretty complete dossier on someone’s buying habits--much more than someone could gather from purchases at a single outlet,” said David Redell, a member of Computer Professionals for Social Responsibility and a computer scientist at Digital Equipment Corp. in Palo Alto. “It seems obnoxious to me.”

Redell and other consumer advocates say they are particularly concerned about the next phase of the Players Club program: installing card-reading machines in every store so the database can track members’ purchases, further enhancing shopper profiles. For each purchase, club members would accrue credit toward future purchases.

“Consumers are being asked to take the risk that (details about) their buying habits might be sold in the future in return for a pretty big perceived award or discount,” said Edmund Mierzwinski, consumer program director with the U.S. Public Interest Research Group, a consumer watchdog group.

Mierzwinski said the mall should put in writing how shopper profiles will be used.

A Players Club “Rules, Terms and Conditions” handout states the mall can do as it pleases with the information. Club members can withdraw from the program by turning their cards in to the mall, the rules state.

Tracey Gotsis, the Plaza’s marketing manager and Players Club coordinator, says the mall has no plans to sell or show shopper profiles to commercial interests outside the mall.

“I don’t want to invade (members’) privacy. We’re trying to build their trust,” Gotsis said. She said the program would suffer if customers were angered by a flood of junk mail from businesses outside the mall.

Most shoppers interviewed said they didn’t mind giving the information out, so long as the mall keeps the information to itself.

“I think the program is a great idea because it’s nice any time I can save some money. But if they give my name and information to people outside the mall I wouldn’t like that,” Players Club member Ophelia Bisquertt of West Covina said.

Information collected on members is stored in a database controlled by a San Diego-based computer company that sold the Players Club software and hardware to the mall, Gotsis said. Only the mall, she said, is privy to the information.

She hopes the Players Club program will eventually pay for itself as the mall begins to charge its retailers and outside businesses to advertise in the quarterly newsletter and other materials sent to club members.

The operator that purchased the mall in August, St. Louis-based CenterMark Properties, owns 22 major centers in eight states and considers the Players Club at the West Covina Mall to be a pilot program. A Players Club has already started in CenterMark’s San Diego mall and the developer may expand it to its East Coast malls, Gotsis said.

Henry R. (Pete) Hoke, publisher emeritus of Direct Marketing Magazine in New York, said the Players Club is an example of a trend toward more sophisticated collection of personal data by retailers.

“It’s the decade of direct marketing,” he said. “The problem today is the total inefficiency of advertising. The way you make it more efficient is to know more about your customer.

“The people concerned with the privacy issue don’t see what’s going on. All they can see is Big Brother breathing down the back of every consumer on Main Street. The idea should be to help the retailers survive.”