Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Sun, 05 Oct 2003 18:10:57 -0400 (EDT)
From: Office of The Provost <provost@xxxxxxxxxxxxxx>
Subject: privacy: sobering
X-X-Sender: provost@gusun
To: dave@xxxxxxxxxx
Dave,
I found myself in an upscale department store the other week, thinking I
might buy something, but when I started to get closer to doing so, the
clerk mentioned that they didn't take either Visa or MasterCard. Well,
that put it paid for me -- I wasn't going to open another credit account
for this mildly whimsical gift purchase. But I was curious, so later I
called a couple of their stores and got a consistent story. I won't say
what store this is, but I will say that if you want to know which it is,
you could walk thoughtfully around Union Square in San Francisco and bear
in mind that Macy's *does* take Visa and MasterCard.
A customer service representative at one store said that they didn't take
these cards because (1) these cards sold information about their customers
to others (aha! privacy enthusiasts! yes!) because (2) these cards
wouldn't give the store the kind of information about purchasers that the
story wanted to get (OOPS!). So I persisted at another store and got the
manager to talk to me: interesting.
We did an experiment a while ago with five stores that did accept
Visa/MasterCard and our overall business went down. Reason? Well, we use
that information about customers to customize our marketing: catalogs,
mailings, and such. Without that information, our aggregate business went
down, so we stopped it.
My point is that this is a tale about what Andy Odlyzko (whose piece you
posted a few weeks ago) calls differential pricing: that is, tailoring
what you sell to the people you're selling to. And here's a major
national household name chain that can't do the business they want with
credit cards that aren't permissive enough to suit them.
Jim O'Donnell
Georgetown Univ.