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Insider Tips

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A young woman exchanges her personal data for loyalty points by shopping with reward programs

How loyalty programs sucker you into giving up personal information

If you’re not paying for a product, then you might be the product. Wise words to consider next time you're thinking of joining a loyalty program.

We love a freebie, but loyalty programs offering everything from free coffees to discounted flights aren't actually free. Businesses increase their profits with loyalty programs in two ways. A loyalty program encourages you to shop with those participating outlets more than you would otherwise.

The other, more troubling, aspect is that these businesses then sell your data, either to market research companies or to other companies, which then send you unsolicited emails, instant messages, SMS or MMS, better known as spam.

So are these programs worth the annoying influx of unwelcome emails or messages—even phone calls—or are we being suckered into giving up our personal information for little return?

Are the big loyalty rewards that draw you in actually achievable?


Online loyalty program offering refunds and cashback


It depends on how much you spend. If you don't have a big budget or enjoy the freedom of shopping at many different outlets or hunting down a bargain, you're probably not going to get access to the big rewards. Don't let loyalty programs cost you more than they're worth. Use the following tips as a guide:

    • Don’t buy according to reward points offers. Accumulating reward points should be incidental, not dictate your purchasing decisions.
    • Compare the cash value of rewards before buying items on points to get best value.
    • Credit card points give you the greatest flexibility for using points, meaning you're more likely to use your points.
    • Loyalty programs offering discounts on the actual purchase you’re intending to make may offer the best value.
    • Credit cards which accumulate points generally have a higher interest rate. Use these cards only if you pay in full each month or the ‘savings’ you get in rewards are worthless.

How much personal data are you giving up in exchange for loyalty rewards?

You’d be surprised how much. Information on where we shop and what we buy is what these loyalty programs are after. To give you an example, the information collected about shoppers from the Woolworths Everyday Rewards program was combined with the information from its insurer’s car-crash database. What they found was that customers who drink lots of milk and eat lots of red meat are very good car insurance risks. But the customers who eat lots of pasta and rice, and also fill their cars with petrol at night and drink spirits, were not.

Can I minimise the amount of data I give away?

There are a few simple ways to protect yourself:

    • Dedicated spam account - Create a separate email address for websites you’re interested in but unsure if you’ll receive spam (example [email protected])
    • Block spam on your current account
    • Are your details for sale? - Check if the website will sell your details
    • Scam alert – Clicking an ‘unsubscribe’ link on a spam email might result in more spam or even scam contacts.

What are the rules for spam - can we stop it?

There are protections in place, so don’t sit there and take that influx of unsolicited nonsense.


A woman unsubscribing from spam emails


Rules for spam:

    • Must be easy to unsubscribe – instructions clear and visible
    • Unsubscribe must be low or no cost
    • Unsubscribe links must work for at least 30 days
    • Unsubscribe requests actioned within 5 working days
    • Report spam to the government agency responsible or by calling 1300 855 180.
    • Penalty for breaching spam regulations are up to $1.1 million

If you are experiencing any trouble with loyalty programs, or need help getting off lists you didn’t ask to be on, let us know and we’ll help you handle it.