Will You Be Mined? Ethical Considerations of Opt-in Loyalty Programs and Price Discrimination

The use of loyalty programs in retailing permeates the modern shopping experience. Program members are rewarded with benefits for simply providing purchase information to the retailer. In exchange, retailers hope to use the information in conjunction with data mining to make better business decisions. While many of the uses are common knowledge to consumers, not all are. Unfortunately, some uses have raised ethical concerns among consumers. This paper discusses the interplay of data mining and loyalty programs with the potential ethical implications of price discrimination as a result of the synergy.