Retailers Compile Data from Licenses
* Privacy: Critics worry about 'potential for abuse.'
With the help of inexpensive machines that can read magnetic stripes on California driver's licenses a thousand times faster than cashiers can ask "paper or plastic?", grocery chains are compiling customer's names and addresses on computers.
It's a potential marketing bonanza for retailers. Having customers' names and addresses easily accessible in a chainwide database may eventually allow retailers to develop mailing lists based on consumer preferences gleaned from register receipts.
The magnetic-stripe technology works like this: The first time a customer cashes a check at a store, he or she swipes a driver's license into a stripe reader and hands the cashier a check. With the help of an optical scanner for reading check numbers, the customer's name, address, license and checking account numbers are stored in a computer - usually located in the distant headquarters of a grocery chain.
When the customer returns, all he or she has to do is hand the cashier a check. An optical scanner reads the check's number, and a computer determines that the license information is already in the database.
Rumors to the contrary, the only information on the magnetic stripe is that printed on the license itself, DMV spokesman William Madison says.
No law prevents businesses from storing license data and using it for any purpose they choose. Madison said the DMV considers turning over the license to a cashier an implicit act of permission to copy the data. "The individual has relinquished control of the information," he said.
Civil libertarians express concern over these brave new checkout stands - although they haven't quite figured out why.
"There's certainly the potential for abuse," said Alan Schlosser, managing attorney for the American Civil Liberties Union of Northern California. "It could have tragic consequences."
Businesses pooh-pooh such worries, saying that all they're doing is speeding up lines at teller windows and checkout stands.
"We're using it for purposes of check cashing - and that's it." Said Judie Decker, spokeswoman for Dublin, California, based Lucky Stores, which has electronic card readers in all 410 California stores.
Lucky and other major supermarkets say that they have no intention of deluging customers with enticements developed from newly generated lists. Lucky and Safeway say they're satisfied with low-tech coupon mail based on zip codes.
Magnetic-stripe technology was perfected in the Early 1980's, said John Wojcik, a marketing manager for Redwood City-based Veri-Fone, a major manufacturer of electronic-payment systems. Cross-Check, Inc. the third ranked Check Guarantee company, was the first such company to accept the Magnetically stripped Drivers licenses, electronically.
Hector Ortega, a manager with Wholesale Mailing Lists in west Los Angeles, said grocery chains could easily use magnetic-stripe technology to develop tailored mailing lists containing tens of thousands of names.
But Ortega thinks people would become reluctant to hand over their driver's licenses to cashiers if they knew stores were using them to beef up marketing data.
"I could be wrong, but I think people would be wary," he said, "I know I would."
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