Isom Case
Do the benefits of reward programs outweigh privacy related issues?
Have you ever counted the number of membership cards are there in your wallet? For mine, there are at least five. Membership reward program is now becoming more and more prevalent in the Hong Kong and is controversial. It brings huge benefits to the customers since they are rewarded considerably in some way by joining the membership, as the companies claimed. However, there are two sides of the same coin. Privacy related issues, like the Octopus Card Company scandal in 2010, are generated by the programs. In this paper, I will briefly introduce how the programs work and issues generated in the process, followed by reasons why I think the benefits of the programs outweigh privacy related issues.
Reward programs are membership schemes developed by companies for the purpose of encouraging customers to rely on the same supplier for the same product. Simply speaking, after joining the membership, you enjoy a certain percent of discount, or some other privileges over ordinary customers on the street. Undoubtedly there are things to do in order to get this privileged status. Some need you to pay an annual fee or a lump-sum, some want you to provide them with personal information and some require both.
The benefits from these programs are actually not abide by what the companies said in the agreement, but can be huge. Apart from the cash returns, free gifts, coupons and discounts, most customers can gain unwittingly from researches conducted by the companies using the personal information of members. What the companies use for research work is not exactly your ID number or phone number or so, but your shopping style and trend. By simply looking at this kind of trend and buying patterns, companies can know what kind of products their customers really need, what is going to obsolete, the quantity that a customer will purchase periodically and so on. In light of these, more products with higher
Have you ever counted the number of membership cards are there in your wallet? For mine, there are at least five. Membership reward program is now becoming more and more prevalent in the Hong Kong and is controversial. It brings huge benefits to the customers since they are rewarded considerably in some way by joining the membership, as the companies claimed. However, there are two sides of the same coin. Privacy related issues, like the Octopus Card Company scandal in 2010, are generated by the programs. In this paper, I will briefly introduce how the programs work and issues generated in the process, followed by reasons why I think the benefits of the programs outweigh privacy related issues.
Reward programs are membership schemes developed by companies for the purpose of encouraging customers to rely on the same supplier for the same product. Simply speaking, after joining the membership, you enjoy a certain percent of discount, or some other privileges over ordinary customers on the street. Undoubtedly there are things to do in order to get this privileged status. Some need you to pay an annual fee or a lump-sum, some want you to provide them with personal information and some require both.
The benefits from these programs are actually not abide by what the companies said in the agreement, but can be huge. Apart from the cash returns, free gifts, coupons and discounts, most customers can gain unwittingly from researches conducted by the companies using the personal information of members. What the companies use for research work is not exactly your ID number or phone number or so, but your shopping style and trend. By simply looking at this kind of trend and buying patterns, companies can know what kind of products their customers really need, what is going to obsolete, the quantity that a customer will purchase periodically and so on. In light of these, more products with higher