Loyalty cards set to be part of OFT probe into personal pricing

Tesco’s Clubcard and Sainsbury’s Nectar loyalty scheme are set to be scrutinised by the Office of Fair Trading after the watchdog announced it is to explore personalised pricing on the internet.

The OFT has launched a “call for information” to analyse how retailers are targeting customers with personalised offers after monitoring their online shopping habits.

Personalised vouchers and offers are growing in importance for the supermarket industry as retailers attempt to grab the attention of customers with targeted offers.

At Sainsbury’s interim results on Wednesday, chief executive Justin King said that Nectar allows the retailer to “understand our customers better and provide them with relevant offers”.

For example, Mr King said that customers with Sainsbury’s Bank were spending more in supermarkets “driven by our ability to offer them targeted offers and promotions using Nectar loyalty data”.

The OFT said it will examine “consumers’ understanding of how their information is used and whether they are being treated unfairly in law as a result of any firms using this practice”. It could then launch a full-scale investigation.

The watchdog will consult with international bodies including the US Federal Trade Commission. It will publish its findings next spring.

Clive Maxwell, OFT chief executive, said: “It is important we understand what control shoppers have over their profile and whether firms are using shoppers’ profiles to charge different prices for goods or services.

"This call for information will help us understand these practices better and to decide whether or not this is an issue on which the OFT needs to take any action.”


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