Are companies like your insurance company tracking every time you buy a bottle of wine or pick up a few cigars? A listener to my podcast responded to a discussion I had about it in a recent show.
A Listener responds:
I heard you mention on your #90 podcast that companies are buying consumers credit-card purchasing habits, and well this may very well be true, it’s most likely the store that is collecting this data not the credit card associations or the banks.
I write credit card software covering all the major banks and card associations throughout the US and UK and I can say this for sure – transaction information detailing the items purchased (e.g. 10 X 150ml Wild Turkey) [We call this ‘Level 3’ data], is only sent for certain classes of credit cards termed ‘Commercial Cards’ (or ‘Business Cards’ or ‘Purchase Cards’). As the name implies, these cards are used by businesses to allow for increased detail in expense reporting (e.g. secretary shopping for office supplies).
To get this feature, card holders must pay a premium on top of typical consumer credit cards fees. So, typical transaction detail (excepting Commercial Cards) sent to the bank for a credit card txn is: CC#, Expiration, CCV2, Cardholder Name, Address Data, Amount, POS Characteristics (Terminal Type – attended or unattended, Cardholder present or not present, etc…) and merchant name/category information.
There is somewhat of an exception with this for an e-Commerce transaction, a 23 character field is sometimes used to transmit an ,’X*Y’ pattern, where X is a merchant name or abbreviation and Y is an item description. So, you’ll end up with something like ‘AMAZON *BOOKS’. This text is printed on the billing statements to help consumers identify their purchases, but take note, this detail is at a high level, so if someone purchases 100 items they still only have this one field to describe all those purchases (e.g the field is per transaction, not per item).
If that makes you feel any better about big brother.. :)
But, still, they can track what stores you like to go to and how much you spend there – the merchant category code details the “type of store” (e.g. 5921 – Package Stores, Beer, Wine, Liquor; 7273 – Dating & Escort Services, 7995 – Betting, 5993 – Cigar Stores and Stands). So I guess the best advice to keep from being tracked is to shop at general-type stores, but I don’t know many Wal-Marts where you can find ‘dates’ or place bets.
Thanks for the cool info!