4 Ways Retail Stores Are Monitoring Your Every Move

From the second you pull into a store’s parking lot, you can be relatively certain there are electronic eyes on you. But we’re way past the days of black-and-white monitors to discourage vandalism and shoplifting. Today’s retailers follow you everywhere and know lots about you.

“While most consumers understand a need for security cameras, few expect that the in-store video advertising monitor they’re watching … is watching them” with a pinhole camera, says Pam Dixon, executive director of World Privacy Forum to our cohorts at ShopSmart, which recently looked at the variety of ways in which your shopping behavior is being monitored and tracked.

1. SUPER SPY CAMS
Stores aren’t just using video cameras so that the cast of Law and Order can come in during the second act and identify a suspect, though they still serve that purpose too.

“Gaze trackers are hidden in tiny holes in the shelving and detect which brands you’re looking at and how long for each,” writes ShopSmart. “There are even mannequins whose eyes are cameras that detect the age, sex, ethnicity, and facial expressions of passers-by.”

That data can be combined with other info, like what you ended up buying, what kind of credit card you used, your photo and even your license plate number to create a profile of you.

Right now, most stores offer zero-to-little disclosure information about what information it collects via video camera, and there really is no way to opt out of this sort of tracking.

Industry analysts say many of the big chain retailers use some kind of video-based analytics, but none are really open about it. Cisco brags that Macy’s uses its video system, but when ShopSmart contacted the department store chain, reps did not call back. Similarly, though Target’s privacy policy states that it gathers info “recorded by in-store cameras,” a Target rep would not comment on the chain’s use of video analytics.

2. SMARTPHONE TRACKING
There are already opt-in systems that send out alerts and coupons to users’ phones when they near a participating store, but this is more about using all of the shoppers’ phones to track foot traffic. By latching on to and keeping records of your phone’s International Mobile Subscriber Identity number or Media Access Control address (transmitted when the device’s Wi-Fi is enabled), retailers can not only monitor customers’ movements in real time, they can compare a shopper’s previous visits to see how things change over time.

A pair of malls made headlines in 2011 when they announced they would be testing something like this during the holiday season, and they quickly backed off after public outcry. But ShopSmart reports that Cisco is currently testing, at an undisclosed location, a phone-tracking system that automatically connects shoppers’ smartphones to the store’s free WiFi network.

“Once the customer gets on the network, he has opted in, and the privacy concerns are allayed,” the general manager of Cisco’s wireless networking group tells ShopSmart.

That means that if you use your smartphone to go online and compare prices, the store will know.

“The retailer is not controlling but is managing the flow of information, and the shopper sees the retail brand as helping her shop,” says Cisco’s director of Internet business solutions by way of justifying this sort of system.

3. PERSONALIZED ADVERTISING
Just like the camera-containing mannequins and store shelves mentioned above, those video ads you see playing at your local store may be evaluating you, determining your age, gender, ethnicity, mood, to select a message that’s best targeted to what some database says you want to know about.

Beyond the facial recognition tech, some stores use RFID tags on merchandise so that these targeted ad monitors will know exactly what you’re carrying.

4. RETURN REWARDS
We’ve been writing about the ever-increasing privacy invasion of product returns for years, almost all of it having to do with a company called The Retail Equation, which provides monitoring services to a growing list of retailers. TRE’s database keeps track of who is returning what when and where in order to flag the tiny percentage of shoppers who are problem returners.

But some stores have added a new twist designed to appease customers who aren’t habitual “borrowers” (people who buy things with the intention of returning after a short period of use). ShopSmart reports that retailers have begun rewarding honest shoppers with things like discounts toward future purchases, with the idea being that you’ll be encouraged to spend your refund at the store right then and there, as these rewards are often only valid for a short period of time.

“The offers work to serve the retailer’s needs,” writes ShopSmart. “As a result, the deals might be on stuff that’s about to be marked down for clearance anyway, or for a brand that you don’t usually prefer.”

For more on these sorts of antics and what, if anything, can be done to stop them, check out the full ShopSmart article.