The information collected is used for demographic information (what do you buy, what will you buy more of).

If you are dumb enough to give them your correct info, they send you coupons based on previous purchases.

Stupid conspiracy theories presented as fact have no place here, only confuse the issue.

One man was convicted of a crime because police used the loyalty card database to show that he was at a certain store at a certain time.

[...] Cribcage took exception to a comment I posted yesterday. In the further discussion of things your supermarket won’t tell you, I quoted a Digg-user who works at a grocery store: Since I have started changing prices I have noticed a lot of tricks that Safeway uses. […] Everything at a grocery store is close to double the price of Walmart or Target. [...]

I don’t understand his point about how the store preferring to sell house brand products means the house brand must be low-quality. It seems to me that they’d prefer to sell house brand because they’re able to pocket all of the profits instead of sharing some with Heinz, and because getting customers hooked on a high-end house brand means those customers won’t be able to go to a competitor to buy the products they like.

(Also, any story that begins “this is a true story” probably isn’t.)

“In the retail industry, Catalina Marketing retrieves about 250 million transactions per week, across more than 21,000 grocery stores. On behalf of our grocery retail clients, we manage one of the six largest databases in the world, containing the purchase histories of over 100 million household IDs.”

Still think grocery stores aren’t making money by tracking you with those cards?

I love this blog and I’m all about financial acuity, but this is the sort of dangerous conclusion reached by the narrow-minded thinking that often goes hand-in-hand with penny pinching.

My mother used to buy oversized containers of laundry detergent. I’d explain that I understood smaller containers cost more per ounce but that I didn’t feel it was money wasted. “For my extra 14 cents, I’m buying the ability to lift these smaller bottles of detergent without pulling a muscle.” We had the same discussion about a box of 200 trash bags: “For my extra 45 cents, I’m buying a smaller box that fits inside my kitchen drawer. The bigger box is cheaper, but I don’t have anywhere to put it.”

Same principle here. Yes, my local grocery store costs more than Wal-Mart, but that isn’t money wasted. I’m investing in my local economy — but I’m also buying accountability. My local supermarket has fewer customers than multinational Wal-Mart, so each individual customer’s voice carries more weight. They care what I say.

When my local store decided to stop carrying Hodgson Mill corn meal, for example, I complained and they reversed their decision. Everyone in my neighborhood likes certain candies at Halloween, and I don’t have to worry about my supermarket abandoning those brands because 20,000 customers in Kansas and Missouri stopped buying them.

Learn to distinguish between being aware of how much you spend versus always searching for the lowest price. One is smart. The other is narrow-minded and destructive.