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At COLLOQUY, we regularly discuss the benefits of using loyalty program data to improve customer relationships and targeted customer communication. But can a company be sued for not using its loyalty data?

Apparently so: Safeway was recently sued by a non-profit group for failing to issue recall alerts through contact information gleaned from its loyalty club program.

According to the original press release, a woman used her Safeway Club card to buy crackers and cookies that later were part of a recall of products made with contaminated peanut butter that was traced to a salmonella outbreak in 2008 and 2009 and resulted in nine deaths and 714 confirmed infections. Another woman, also using her Safeway Club card, bought eggs that were connected to a salmonella outbreak that led to the recall of more than 500 million eggs.

Both women say Safeway made no attempt to notify them about the recalled items and, in the complaint filed in California Superior Court, asked that they and others who bought recalled food be refunded the price of those purchases, and that Safeway commit to using its Club card data to contact consumers during future recalls.

COLLOQUY has covered a few instances where retailers have leveraged their rewards program database to alert customers to recalls on products they've purchased, such as when Giant Eagle alerted over 30,000 Giant Eagle Advantage Card customers last January about a recall of hash brown products.

In this case, Safeway surely did miss a prime opportunity to demonstrate added value to being a club card member, and if they had used their database to alert customers, they would have had a great surprise-and-delight moment. But a lawsuit? We believe that seems to take things too far — creating too big a leap between "relationship-building opportunity" and "legal obligation."

Certainly, a loyalty database need not be used only for promotional targeting — that is old-school thinking about what customers can do for Safeway. In today's new age of loyalty marketing, customers are coming to expect communications that work for them. Perhaps Safeway could have contacted that portion of customers that had provided their e-mail contact information and asked them to forward and share the notification to friends and family. It could have also used the experience as an opt-in opportunity to gain an active e-mail address for future recall notifications, taking the action on Facebook and Twitter to build their e-mail list as well.

Today, marketers need to take every chance they can to add loyalty value — especially in a case like this where there exists the opportunity to save someone from illness, or even to save a life. Nevertheless, we feel the idea of a lawsuit punishing companies for not proactively using their loyalty data may go a little too far.

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User Comments – Give us your opinion!
  • Molly Griffin
    Great points. Often times people work hard to create effect loyalty programs, but fail to follow up and keep the loyalty program defeats the purpose of having one to begin with. It is important for companies to utilize loyalty plans, but suing for failure to follow up seem excessive. Our clients here at Dydacomp have seen the benefits of an effective loyalty program.

    Thanks for sharing!

    Molly Griffin
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Latest posts by Sharon Goldman
Sharon Goldman
In her role as Senior Editor, Sharon writes and edits stories for COLLOQUY magazine. She helps develop future communications and research initiatives, and also works on white papers and thought leadership content for other lines of business within LoyaltyOne.
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