Friday, May 30, 2008

A modest proposal on loyalty cards

This post on MR got me thinking since I am one of those with a lot of loyalty cards: Giant, Safeway, Borders, Best Buy, Neisha Thai, American Plant Food, Staples, Office Depot and probably some others that I have now misplaced.

The inconvenience of having to carry all the cards on me (since I never know when I might swing by one of these places) seems to cry out for a centralization and who better to do this than Federal Government. Retailers sign up with the Federal Government who then offers one card to all who want one. For simplicity, let's call this a Federal Loyalty Card. Those who want to card simply check off on a form all the retailers they would want to participate with. (The default could be all retailers who sign up.) For security purposes, the Federal Government could require a finger print or some other biometric pattern on the card. Therefore, if I lose the card or forget to carry it, I can still get my discounts by offering my thumbprint.

This is the win-win situation of all time:
1. Retailers win by having a streamlined version of a loyalty program. They could also "share" information with the Federal Government by letting the Federal Government know what the customer has been buying.
2. The Federal Government wins by having a centralized database of buyers.
3. The customer wins by not having to carry all the loyalty cards around. Plus, if the retailers choose to "share" information with the Federal Government (with the approval of the customer, of course), the Federal Government will contribute 1% of all total spending to a retirement account held in trust for the customer.

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