#8 – Scaring stores away from embracing pro-consumer mobile technologies

What’s so iAWFUL?

Some state lawmakers want to mandate warning signs in stores that use new technology that’s aware of mobile devices. These warning signs will alarm consumers and suppress adoption of new technology that helps stores send deals to returning customers — even where the customer downloaded an app for that very purpose.

(CA AB 2667), (MD HB 924/SB 950)

States are forcing stores to post signs that merely frighten consumers – not inform them.  The problem is these signs will also forestall stores from adopting a new technology that makes the shopping experience more interactive, and possibly less expensive.

Last spring, Nordstrom started its in-store cellphone awareness program to identify (1) how many customers enter the store and how many are repeat customers; (2) how many people walk by a store compared to how many enter; and (3) how customers make their way through the store.

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Nordstrom posted signs describing its program, as seen at in the figure at right. Their sign described privacy practices, customer consent options, and benefits of the program. Many customers read the signs and some of them chose to opt-out. But several others posted complaints on websites and sent letters claiming to be “creeped-out” by the program. They raised such an alarm that Nordstrom cancelled the program, rather than struggle to explain how it benefits their business and serves their customers.

A state-mandated sign is not sufficient to explain the benefits, options, and privacy protections of the different in-store cellphone awareness systems. For example, PayPal’s Beacon requires customers to twice authorize any collection of information.

First, customers agree to terms of service when they install the PayPal App.

Second, customers are required to choose whether to participate with a specific store they enter, indicating “Always,” “Never” or “One Time” otherwise no information is shared with that merchant.

That’s two chances to inform consumers and give them control over their information. Moreover, a consumer can revoke these permissions they grant individual merchants at any time. And, that’s more than can be conveyed in a window sticker or sign that’s far more likely to alarm consumers.

Instead of informing, CA 2667 mandated signs will dissuade stores from implementing cellphone awareness programs, denying consumers their right to choose whether to participate.

Worse, by discouraging stores from participating in cellphone awareness, it denies consumers a new way to save money while shopping.  Some new systems offer consumers coupons and discounts for using the in-store cellphone identification. This is similar to loyalty card programs consumers enjoy today – providing them custom coupons for the kinds of things they actually want to buy.  And others give consumers the savings from coupons they otherwise forgot or left behind.

States should encourage adoption of this new technology, not brand it with a scarlet letter.

Status:

MD HB 924/SB 950 did not pass.

The iAWFUL reflects the editorial views of the Executive Director of NetChoice and does not necessarily reflect the views of all NetChoice members.

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