Supermarket loyalty cards cut bills by €600 per year while raising data privacy fears
Consumers who prioritize privacy are facing higher grocery bills as major supermarket chains increasingly tie discounts to loyalty programs that require a customer card. Research conducted by NRC and based on responses from over 1,000 participants reveals that the price difference can reach up to 600 euros per household annually for those who refuse to use a loyalty card. Among the largest chains, only Aldi, Plus, and Dirk continue to offer discounts to all customers, regardless of whether they participate in their loyalty programs.
Historically, supermarkets offered discounts to all customers. However, as they increasingly rely on customer loyalty programs, these savings are now reserved for those who share their data. This shift has raised concerns about privacy and transparency, as supermarkets collect detailed consumer profiles. These profiles can include information such as whether a shopper is a "promo lover" or a flexitarian, or whether they tend to buy groceries every Sunday evening. Albert Heijn, for example, uses purchase data to estimate whether a customer is likely to try new products.
Despite understanding that their data is being used in this way, many customers are reluctant to pass up significant savings. Peter van Dijk, a participant in the NRC study from Utrecht, commented, "You know they are using your data, but I don’t feel like my data is more valuable than the discount."
The value of this consumer data is difficult to quantify, according to Nick Bombaij, a researcher at the University of Amsterdam studying customer loyalty programs. The effectiveness of these programs is complicated to measure due to the influence they have on buying behavior. Simply joining a loyalty program can increase a customer’s spending by 1 to 4 percent, Bombaij notes. Additionally, customers who are already loyal to a supermarket chain may be more likely to sign up for a loyalty program, further complicating the ability to isolate the effect of the program itself.
Supermarkets benefit from this arrangement without necessarily incurring additional costs. According to Bombaij, the discounts offered are often a reallocation of previous savings that were available to all customers. "The costs were already there, but now they get data in return," he said to NRC.
The NRC study revealed that loyalty program participants report substantial savings, with some households saving as much as 600 euros per year. This typically applies to larger households that shop almost exclusively at one supermarket. Many of these participants prefer organic products and take advantage of premium programs, like Albert Heijn’s, which charges an annual fee of 14.99 euros in exchange for a 10 percent discount on organic products and personalized offers.
However, most consumers in the study reported savings well below this amount. Websites like Randombonuskaart.nl, created by network engineer Nick Bouwhuis, offer privacy-conscious shoppers an anonymous alternative to loyalty programs. The site generates random customer cards, allowing users to scan a barcode for discounts without sharing their personal data. This platform has become a popular tool for those seeking discounts without compromising privacy, with the website handling thousands of grocery receipts annually.
Bombaij, while not dismissing the platform, finds that the reported savings of 600 euros per year are exaggerated. The calculations assume that consumers are purchasing exactly the products featured in promotional offers and would have otherwise paid full price. "The higher numbers could reflect only the purchases where people used the loyalty card," he told NRC.
Bouwhuis, who created Randombonuskaart.nl in 2018 after a colleague voiced privacy concerns, warns users about the risks of data collection. "You have to realize that your data is being collected, and you don’t know how it will be used in the future," he said.
Retailers are increasingly focused on loyalty cards, with some expanding their programs to include digital stamps and offers available exclusively through apps. Albert Heijn, Lidl, and Jumbo are among those implementing strategies that require customers to use a loyalty card or app to access discounts. These retailers have also started offering personalized discounts through their apps, making it harder for consumers to compare prices and offerings.
The German consumer protection organization has filed a lawsuit against Lidl, alleging that the supermarket chain does not adequately inform customers that their data is being exchanged for discounts in the app. Lidl’s Plus program, used by approximately 100 million people in Europe, is at the center of the case, which is seen as a test for similar programs across the continent.
Despite concerns raised about the use of personal data, supermarkets in the Netherlands continue to emphasize the growing importance of promotions. According to interim CEO Tom Heidman of Jumbo, the role of discounts in driving sales has significantly increased. "The consumer is chasing deals," Heidman told NRC, noting that promotions now account for over a quarter of their sales, compared to just 14 percent four years ago.
This increase in discounts has made customers less loyal to specific chains, with many shoppers now switching between stores depending on the best available deal. "Our market share is under pressure," Heidman admitted, referring to the shift in consumer behavior.
While some consumers are willing to pay for privacy, others find it difficult to avoid the lure of discounts. Johan Gelderloos from Lochem, a participant in the NRC survey, noted, "I like Aldi because there’s no hassle with cards or apps." However, for many, the proximity of supermarkets offering significant discounts, along with financial pressures, makes it challenging to avoid participating in loyalty programs. Teska Seligman, another survey participant, added, "I’m actually against these kinds of cards because information is being collected, but in tough times, the discount is just too tempting."
