Shopping and Your Privacy

As the holiday season approaches, you may find yourself doing more shopping.  Whether you are at a mall, a big box store, or at your local drugstore for a last minute gift, you should understand how shopping may impact your privacy.  Here are some important points to consider:

You generally don’t have to show an I.D. to make a credit card purchase.  You’ve likely encountered this situation many times.  You are in a store paying for your purchase with your credit card.  The cashier asks to see your driver’s license.  Do you have to show it?  Probably not, if it’s a Visa or MasterCard.   While merchants may ask a customer for identification, in most situations, they may not require you to present an I.D.   Stores often ignore this rule.  Many consumers want to protect their privacy and personal security by not revealing their address, birth date, and other information to a stranger.  Of course, identification may be required in certain circumstances, for example, when purchasing alcohol, tobacco products, or certain drugs.  Identification may also be required for unusual transactions flagged during the credit card authorization process. 

Credit card minimum purchases and surcharges.  Stores may set a minimum purchase amount of up to $10 under federal law. In most states, they may also add a surcharge for paying by credit card.  But in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas credit card surcharges are unlawful.  However, these laws do not necessarily prevent stores from offering a discount for paying by cash.  In practice, most stores do not impose surcharges or have minimum purchase amounts.

Don’t use a debit card.   Debit cards typically put you at much greater risk than credit cards because they offer fewer consumer protections in the event of a loss. Because these cards access funds directly from your bank account, your money may remain missing while you and your bank sort out any theft, which could mean bounced checks, late fees, and numerous other problems. Your checking account (and related savings accounts) could be wiped out in minutes.  Some crooks use “skimming” devices to steal your card information from stores.  Others may hack into a retailer’s card processing system. 

Understand the risks of mobile payments.  Make sure that your phone is password protected to help avoid fraudulent use of your payment app if your phone is lost or stolen. Remember that your “rights” as a consumer depend upon the underlying payment mechanism (credit card, debit card, prepaid card, or mobile wallet).  Be sure to read the app’s Privacy Policy to understand how your purchase data is used and shared.  Understand that the company behind that app will have access to the what, where, and when of all your purchases.

Stores can track your movement through your mobile device.  Most mobile devices (including smartphones and many wearable devices) emit a Wi-Fi MAC Address and a Bluetooth address.  Your MAC address is a unique 12-digit string of letters and numbers assigned to your device. Retailers can use either their existing Wi-Fi or sensors placed throughout the store to detect your device's MAC address.  This practice is known as mobile location analytics technology.   These retail analytics are rapidly changing traditional shops into "smart stores" that can digitally observe your shopping habits.  To stop your MAC addresses from transmitting, you must either turn your device off or turn off both Wi-Fi and Bluetooth. Be sure to do so before you get near the store, because the range of the retailer's sensors may extend beyond the store’s physical boundaries.

Learn about each store’s return policy.  Some retailers require a state-issued ID or license when you return or exchange merchandise.  Typically, stores swipe the shopper's driver's license when a return is being made, and if the store's return limit is exceeded, the return is denied. Stores do this to keep better track of possible return fraud.  Some retailers maintain their own database while others use a third-party service.  A number of national merchants outsource the collection of return and exchange data to a company called The Retail Equation. If you make repeated returns or exchanges to a participating merchant, subsequent returns to that merchant’s stores may be refused. 

Understand how retailer loyalty programs work.  Many stores have customer loyalty programs.   Typically, shoppers provide their name, address, e-mail address and sometimes other demographic information such as gender, phone number, or birthday in order to join.  When customers use the store’s loyalty card or mobile app at checkout, they may be given a discount or accrue points that can be redeemed for rewards. Loyalty programs allow the store to keep tabs on what customers buy and how often they shop.  One loyalty program called Plenti isn't tied to a single retailer.  It's being billed as the first multi-industry reward program. Participating retailers include Macys, RiteAid, Exxon-Mobil, AT&T and other retailers.  As the number of retailers and other businesses participating in the Plenti program grows, the potential privacy issues are likely to increase.

Shopping Online?  When shopping online, make sure that the website uses encryption technology before you provide your personal information.  If you look at the top of your screen in the address bar, you should see https://. The "s" that is displayed after "http" indicates that website is secure.  You may not see the "s" until you are actually on the order page on the website.  The safest way to shop on the Internet is with a credit card. Be sure to check out a website’s privacy policy before providing any personal information online.  You can also learn what type of information is gathered by the website, and how it is-- or is not--shared with others by reading its privacy policy. A link to the privacy policy should be found at the bottom of the site’s home page.

Want to learn more about shopping and your privacy?  We have several Consumer Guides with much more detailed information:  

If you have any questions or complaints about shopping and your privacy, use the orange or blue buttons at the top of the page to let us know.