Your grocery store loyalty card does more than just save you money on your weekly shopping trip; it creates a detailed record of every single item you buy. Most of us assume that this data is only used by the grocery store for its own marketing purposes. However, a shadowy network of third-party data brokers is now buying this information, creating sophisticated consumer profiles, and then selling those profiles to other industries, including insurance companies. This raises serious privacy concerns about how our most mundane daily habits could be used to judge us.
1. Through Third-Party Data Brokers
Grocery stores do not typically sell your shopping data directly to an insurance company. Instead, they sell the anonymized data to a third-party data broker. These brokers, like Acxiom or Epsilon, are massive companies that specialize in collecting consumer data from thousands of different sources. They then combine your grocery data with your other online and offline activities to build a comprehensive profile of your lifestyle.
2. Creating a “Health Risk” Score
The data broker uses your grocery purchase history to assign you a “health risk” score. If your shopping cart is consistently filled with processed foods, sugary drinks, and tobacco products, your profile will flag you as having a higher health risk. Conversely, if you regularly buy organic produce, lean proteins, and other healthy items, you will be scored as a lower risk
3. Selling Profiles to Health and Life Insurers
Insurance companies are constantly looking for new ways to assess risk. They can purchase these consumer profiles from data brokers to get a behind-the-scenes look at the lifestyle of a potential applicant. While they are legally barred from using this data to deny you primary health coverage, it can be used in other ways, especially for things like life insurance, disability insurance, or supplemental health plans.
4. Influencing Your Premiums and Eligibility
For life and disability insurance, your grocery habits could be used as one of many “alternative data” points to help determine your premiums. An insurer might see a profile that includes heavy purchases of unhealthy foods and tobacco as a sign of a higher-risk lifestyle, which could lead to a higher quote. While the impact is hard to quantify, privacy experts are increasingly concerned about this use of our data.
5. Targeted Marketing for “Wellness” Programs
Health insurance companies also use this data to target you with advertisements for their own “wellness” programs. If your shopping data suggests you have an unhealthy lifestyle, you might start seeing ads that encourage you to join your insurer’s gym discount program or a diet plan. This is a way for them to use your data to try and reduce their own future healthcare costs.
6. The Lack of Transparency and Consent
The most troubling aspect of this entire process is the complete lack of transparency. You are never explicitly asked for your consent to have your grocery data sold and analyzed this way. It is a secondary use of your data that is buried deep in the terms and conditions of the loyalty program you signed up for just to get a discount on your cereal.
Your Data, Their Profit
The quiet sale of our grocery data is a powerful example of how our personal information is a valuable commodity. It shows that our everyday choices are being monitored, analyzed, and monetized in ways we could have never imagined. As this practice becomes more common, it will lead to a greater demand for new privacy laws. These laws give consumers more control over how their most personal data is used.
Are you aware that your grocery data is sold and used in this way? How do you feel about this practice? Share your thoughts on this privacy issue!
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