Last month, Tara Kuczykowski walked into a Target store in Columbus, Ohio, pulled out her mobile phone and handed it to the cashier. The cashier scanned the digital coupon on the phone's tiny screen, and Kuczykowski got $1 off sandwich-size Ziploc bags. Target got something, too: another entry in its database about her.
Invented over a century ago as anonymous pieces of paper that could be traded for discounts, coupons have evolved into tracking devices for companies that want to learn more about the habits of their customers, reports WashingtonPost.
A growing number of retailers are marrying data with information discovered online and off, such as guesses about your age, sex and income, your buying history, what Web sites you've visited, and your current location or geographic routine -- creating profiles of customers that are more detailed than ever, according to marketing companies.
The department stores, grocery stores and fast-food outlets that have begun to use mobile marketing say this information will allow them to provide customers with truly useful, personalized offers in a world where they are constantly bombarded with advertisements.
"The big advantage of mobile coupons is the convenience, because your phone is like your underwear -- it goes everywhere you go," said Luke Knowles, founder of Coupon Sherpa, which partners with retailers to offer discounts through mobile phones.
There's a trade-off.
"The convenience provided by mobile coupons comes at a price: your privacy," said Jeff Chester, executive director of the Center for Digital Democracy, a Washington-based public-interest group.
The government is still trying to figure out to what extent mobile marketing and the practice of what's known as "behavioral targeting" need to be regulated. Although companies have argued that none is needed, a number of consumer advocacy groups have called on the Federal Trade Commission to create guidelines that would require mobile marketers to reveal what personal information they collect and how they use it.
Pioneers on the phone
Companies such as Starbucks, McDonald's, KFC, Office Depot, CompUSA, Zales, Gap and Planet Hollywood have experimented with mobile marketing for several years, but only recently have some begun to roll out national campaigns as sales of Apple iPhones, Google Androids and other smartphones with screens have surged.
Target in March became the first to roll out scannable mobile bar code coupons at its 1,750 stores nationwide. Each month, it offers five coupons on such essentials as sunblock and cereal.
Target's terms and conditions for its mobile coupons service notes that it can collect "your cell phone number, your carrier's name and the date, time and content of your messages." A spokeswoman for Target clarified that it means the company "reads the content of messages sent to Target in order to fulfill guest requests."
Beam up savings
Within a month or so, coupon lovers will be able to walk into a national fast-food chain and shake their mobile phones near a cash register to beam over discounts through a system created by CopiaMobile, a Scottsdale, Ariz.-based startup.
Companies are loath to talk about what kind of information they collect and analyze, but Knowles of Coupon Sherpa said that up to 10 to 15 pieces of information -- from what search term you typed in to your phone number -- could be passed to a store from the bar code of a mobile coupon.
Even Kuczykowski, a tech-savvy 34-year-old mother of five children younger than 9, isn't exactly sure what she's giving up for the coupons. She said she's comfortable allowing companies to collect all sorts of information -- her age, location, even her children's ages -- but even she draws a line.
"I would be concerned," she said, "if they get very granular and are tracking me specifically."
