That little card or app on your phone earning you points at the supermarket checkout isn’t really about the discount. It’s about the data trail you leave behind every time you scan it.
Consumer NZ has been blunt about the trade-off. Loyalty schemes exist primarily to breed customer loyalty and keep shoppers returning to the same store, which is good for the retailer and mutes competition between chains.
The organisation’s head of research and advocacy, Gemma Rasmussen, has said the “data downside” outweighs the benefits for most consumers, and that shopping around usually beats sticking with any single scheme’s rewards.
The mechanics of what gets collected are worth understanding. Beyond the obvious record of what you buy and when, loyalty programme terms and conditions typically allow retailers to gather your name, address, date of birth, and in some cases video or audio footage captured in-store through security systems.
That information can then be shared with operational and technology providers, advertisers, and even search engines, all under the banner of terms most people accept without reading.
New Zealand’s largest supermarket loyalty overhaul in years, Woolworths’ shift from the long-running Onecard to Everyday Rewards, brought this into sharp focus. The retailer maintains the new scheme collects no more data than its predecessor, and that its longer privacy policy simply reflects greater transparency rather than expanded collection.
Critics weren’t entirely convinced, noting that terms buried deep in the fine print permit personal information to be sent overseas to jurisdictions including Australia, the US, the UK, Malaysia, the Philippines and India, where privacy protections may not match New Zealand’s own standards.
The Office of the Privacy Commissioner has also weighed in, noting that businesses are required to be open and transparent about what information they collect. Tucking disclosures deep inside multi-document terms and conditions doesn’t necessarily meet that bar, the office has suggested, and CCTV or audio capture in particular comes with responsibilities operators need to actively manage rather than simply disclose and forget.
None of this makes loyalty programmes illegal or even unusual by international standards. Nearly every major retailer runs some version of the same model, because the personalised marketing and shopper insight it generates is worth far more to the business than the vouchers it hands back in return.
The real question for shoppers is whether the discount on offer is worth what’s being collected in exchange, and whether they’d make the same choice if the terms and conditions were placed in front of them in plain language rather than buried six documents deep.
For now, the cost-of-living pressure that makes those discounts attractive is exactly what makes the trade-off harder to walk away from, even for shoppers who’d rather keep their data to themselves.
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