Shoppers save with rewards apps, but where does the data go?
When it comes to saving on groceries or trips to the mall, Nichole Schaubroeck is a pro.
She scours fliers and websites, alerting the 254,000 followers of her @couponcutiecanada Instagram account to sales at supermarkets and stores like Lululemon and Amazon.
But one of the tried and true ways to save – apps like Checkout51, Caddle, Drop, Eclipsa, which offer gift cards, points and cash back for uploading receipts, tracking purchases or taking surveys – is a mystery to the savvy shopper for. .
“The primary purpose of these apps is to collect data, as far as I know, but I don’t know for sure,” said Schaubroeck, who lives in Dominion City. about 100 kilometers south of Winnipeg. “I don’t know a whole lot about that side of him.”
Schaubroeck is right about apps collecting data, but where does the information go and who really benefits from it?
Many apps make money from contracts with retailers and brands that want to trigger purchases, reward loyal customers, and learn more about how certain demographics shop. Customers’ submitted receipts, linked credit cards and completed surveys help apps meet their customers’ needs.
The information handled by apps can be incredibly valuable to Canadian brands, said Ransom Hawley, who launched a cashback app seven years ago after working at Ziploc and Windex maker SE Johnson.
“It was very difficult to get good Canadian and fresh data and insights,” he recalled.
“Imagine if they presented an insight to Walmart and the data was from the US six months ago and they would be laughed out of the room.”
A chance meeting with Apple co-founder Steve Wozniack convinced him to build Caddle, St. Catherine’s Ont. the company that verifies uploaded receipts, surveys and evaluations.
Daily surveys net users five cents each. Top-up receipts from No Frills, Dollarama, Home Depot, and Sephora stores range from 10 cents to $1.
Receipts help Caddle know which customers have purchased in-app products, so you can verify that they made a purchase.
Other brands want Caddle to introduce their products. The receipt identifies when someone has purchased a target item, so Caddle can offer them money for writing a review.
Caddle’s final way to make money is through surveys, which help customers make inferences about buying habits and opinions.
While Hawley has heard of “bad actors” mishandling data, he said Caddle is upfront about its policies from the time users sign up.
“There’s a clear disclaimer that says, ‘hey, this is how we’re going to use your data,’ and it’s not buried somewhere and legally,” Hawley said.
It’s a “misconception,” he added, that companies like his collect data and pass it on to customers, along with people’s names and other identifiable information.
“The things we sign with, like the Walmarts and the Nestles, they don’t want PII because it makes them liable,” he said.
“So the vast majority of the data we sell is only aggregated and anonymized.”
Truly anonymized data is stripped of identifiable information through a technical process, so even if found, it cannot be linked back to an individual, said Imran Ahmad, partner and chief technology officer at law firm Norton Rose Fulbright Canada.
However, some confuse the term with de-identified data – data that removes names but often leaves details such as address or date of birth open to re-identification.
Regardless of which app they use, they are required to handle data securely and to be upfront about how the information will be used, which Ahmad says most apps do.
Bob Fay, executive director of the digital economy at the International Center for Government Innovation, has reviewed several money-saving apps but refused to sign up for any because the information they collect is “very invasive.”
“It’s very unclear how they’re using that information. I think the only thing that’s clear is that they’re monetizing that information,” he said.
“The old saying that there is no such thing as a free lunch or free money with these apps is true.”
He worries that people “don’t fully understand what they’re giving away with these apps,” but a recent survey of an app called Drop, which offers points in exchange for access to customers’ credit card purchases and survey responses, suggests that’s not a concern for many. gives reason.
The Toronto-based company found that 70 percent of members surveyed recently were not bothered by the sale of their data, while 23 percent were “somewhat bothered.” Only the last two percent was confusing.
“They’re not against it, they’re very aware that their data is being used and they’re happy to accept it, because the value they get on the other side overrides what’s happening there.” said Amber Foucault, Product Manager at Drop.
Drop’s user base is primarily comprised of Gen Z and millennials, and the app, which touts “bank-grade security,” promises not to give user data to third parties.
“Only anonymous aggregate information can be released to third parties,” Drop says on its website.
His clients are often companies looking for shopping insights or help targeting new customers or “battlefield shoppers” who consistently shop with their competitors.
“If a user hasn’t shopped at a beauty brand before, we could offer them the opportunity to shop there and encourage them to maybe switch from their current beauty brand,” Foucault said.
“Or if that customer is really loyal, we can give the beauty brand an opportunity to reward or incentivize them a little bit more for their continued purchase.”
Through these methods, it has awarded more than $48 million to more than five million users, including many who flocked to the app in recent months when 20 years of inflation took hold.
But Ahmad still has a caveat.
“People need to know that if they give something, they might get something, but just because you get something, you don’t have to give it,” he said.
“Anything that’s free, there’s bound to be some component that gives you something in return, so I think people should go in with their eyes wide open.”
This report by The Canadian Press was first published on March 12, 2023.