The Australian privacy commissioner has urged consumers to think carefully about the personal information they hand over to companies when joining loyalty programs.
The advice comes off the back of the Office of Australian Information Commissioner assessments that found after investigating Australia's largest loyalty programs - Coles Flybuys and Woolworths Rewards - that both had handled personal data transparently in accordance with privacy laws.
Both companies use personal data for internal marketing purposes and also offer analytics services with anonymised data to external partners; for example at Woolworths this is done through Quantium.
The only area for improvement highlighted for Coles' Flybuys was providing more information about how it deals with privacy complaints.
For Woolworths, which launched its first major campaign with M&C Saatchi yesterday, the report suggested Reward members be advised of which countries their data could be sent to.
As 88% of Australians are now a member of a loyalty program, privacy commissioner Timothy Pilgrim warned that handing over personal data comes with its own risks.
“While it’s encouraging to see that Coles’ Flybuys and Woolworths Rewards each had appropriate privacy notices that were consistent with their practices, it’s important that all Australians understand the bargain we strike with a retailer when we join a loyalty program,” Pilgrim says.
“There’s no such thing as a free lunch, nor a free flight. The data that loyalty programs collect is valuable and personal. So in this case, there is a price for the rewards from these programs.”
While details collected in isolation may seem insignificant, when they are merged together it can paint a picture of who consumers are and how they behave. This data is extremely valuable to marketers to better target messaging and campaigns.
Pilgrim says when consumers sign up for programs, it is important to read privacy policies to understand how personal data will be used.
The Office of Australian Information Commissioner will review other popular loyalty programs this year.
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