For decades, shoppers have taken advantage of coupons. Now, the coupons are taking advantage of the shoppers.
A new breed of coupon, printed from the Internet or sent to mobile phones, is packed with information about the customer who uses it. Though the coupons look standard, their bar codes can be loaded with a startling amount of data, including identification about the customer, Internet address, Facebook page information and even the search terms the customer used to find the coupon in the first place.
And all that information follows that customer into the mall. For example, if a man walks into a Filene's Basement to buy a suit for his wedding and shows a coupon he retrieved online, the company's marketing agency can figure out whether he used the search terms "Hugo Boss suit" or "discount wedding clothes" to research his purchase (just don't tell his fiancee).
Internet coupons grow
Coupons from the Internet are the fastest-growing part of the coupon world - their redemption increased 263 percent to about 50 million coupons in 2009, according to the coupon-processing company Inmar. Using coupons to link Internet behavior with in-store shopping lets retailers figure out which ad slogans or online product promotions work best, how long someone waits between searching and shopping, even what offers a shopper will respond to.
The coupons can, in some cases, be tracked not just to an anonymous shopper but to an identifiable person: A retailer could know that Amy Smith printed a 15 percent-off coupon after searching for appliance discounts at bates.com on Friday at 1:30 p.m. and redeemed it later that afternoon at the store.
"You can really key into who they are," said Don Batsford Jr., who works on online advertising for the tax preparation company Jackson Hewitt, whose coupons include search information. " ... [T]hey're confessing to the search engine what they're looking for."
Jammed with data
While companies once had a slim dossier on each consumer, they now have connected databases exploding with information. And every time a person goes shopping, visits a Web site or buys something, the database gets a little more jammed.
"There is a feeling that anonymity in this space is kind of dead," said Chris Jay Hoofnagle, director of the Berkeley Center for Law and Technology's information privacy programs.
None of the tracking is visible to consumers. The coupons, for companies as diverse as Ruby Tuesday and Lord & Taylor, are handled by a company called RevTrax, which displays them on the retailers' sites or on coupon Web sites, not its own site.