Costco’s Safety Alert Robo-Calls: Good or Bad?

January 28th, 2009 · 7 Comments

So, you may have read my recent post regarding Costco’s response to the Peanut Butter recall on some of their products.  In that post I mention how Costco was performing yet another customer service by culling their membership database to find members that had purchased one, or more, of the recalled products and then calling them to let them know about the recall.  Personally, I think this is great and just demonstrates one more reason why Costco has such high customer satisfaction. I mean, isn’t it great that someone is using this technology for good?

I had thought that this was a new thing that Costco was trying out, but according to this news story, they have been making these robo-calls regarding safety alerts for 18 months now.  Basically, they go through their database of member purchases to see who bought the recalled item, then create a phone list that they send to their outside vendor that will perform the actual calls.  They’ve already made 1.5 million calls regarding the peanut butter recalls and expect to make more.  And if all that technology is just too much for you, they are also sending out old fashioned snail mail letters (which is more than most companies would even do).

So, mostly the comments and other blog posts that I’ve read regarding these robo-calls has been really favorable.  I mean, most people want to know if they are going to eat something or have their child using something that is potentially really harmful or fatal.  However, this blog post, which I read today, made me realize that not everyone sees the greatness in what Costco is doing.  Some are maybe a little too afraid of it because that means Costco knows what they bought.  I’ll be honest, I thought he was over the top paranoid, myself.  Because the fact of the matter is, Costco is going to keep track of what you buy whether you know it or not because it is necessary for them to be more efficient and better at providing customer’s with the goods that they want.  Costco is going to use it to determine things like what they should stock in their stores or even what should be different across the various locales; they’re going to use that information to help you make easier returns (this is why you don’t need a receipt all the time, I believe); and they are going to use it to better ensure their customers’ health and safety.  Not to mention, it’s what all of those grocery store loyalty programs have been doing for years, except Costco won’t be selling your information to advertisers that will target you because of your purchases.   And when’s the last time the grocery store has called to tell you about a recall on a purchase?

So, I’m just wondering if more people feel like this is a service that Costco is performing and should be commended for, or as the guy in the blog writes, should Costco ‘mind their own business’ and let you eat salmonella and jelly sandwiches?

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7 Responses so far ↓

  1. 1 Heidi // 2009.01.31 at 1:10 pm

    I can’t imagine being paranoid about someone knowing what I buy at Costco–hey, we all use scottowels! Items are not bagged, so they are right in the cart for anyone in the parking lot to see. They don’t carry items that some would consider nefarious (porn, etc.). Yeah, I eat granola bars–and I’m not afraid of others knowing it!

  2. 2 Morgan // 2009.01.28 at 7:10 pm

    We had peanut butter Zone bars in the house, so I was glad to get the call from Costco reminding us not to eat them. If I hadn’t already been aware of the recall and made a point of setting aside all the peanut butter products in the house, getting a call would have made sure we were aware that we needed to do so. I knew Costco tracked purchases and it doesn’t bother me in the slightest. I chose to get a membership being aware of that.

  3. 3 Brian // 2009.01.28 at 6:12 pm

    I’ve been doing some reading about this topic, mainly because like the rest of you, I don’t see a problem where so many other people apparently do. The most realistic concern I’ve found would be something like this: suppose our health insurance companies got the data, and adjusted our rates accordingly? There’s such a huge margin of error (e.g., how would they know whether I drank all that wine myself, with friends, or gave it all as gifts?) that I don’t see this happening, but I think that’s the sort of thing people are worried about. If nothing else, maybe we should all buy more carrots if only to give to animals and pets (my dogs love them!).

  4. 4 Melanie // 2009.01.28 at 5:56 pm

    Personally, I am fine with it. A couple years ago when the Easy Bake Ovens were recalled, I received a letter from Costco with instructions on how to receive a credit from Hasbro if I sent the oven back. I thought it was great customer service.

    I could care less if they are tracking to see how many packages of carrots I buy in a month or if I’m a junk food binge.

    Now that I think of it, I wonder if they’ve noticed a correlation between feminine supply and chocolate/salty food purchases?!?! LOL

  5. 5 Beth // 2009.01.28 at 5:30 pm

    Well, I think if a person is worried about people knowing what they buy they shouldn’t shop at a place where they need to have a membership card. That includes using the loyalty cards at the grocery store.

    Of course then you’re limited to paying with cash only, so the credit card company or the bank can’t track your purchases. But what if that nice cashier who waits on you is making a little list in a notebook after you leave? Or what if the bagger is keeping track of your “suspicious” purchases and flagging his friend the cart guy to get your license plate number when you go out?

    There are limits to how careful one can be without stepping off the edge into paranoia.

  6. 6 Dan // 2009.01.28 at 2:10 pm

    Count me in on the “Good” side of this debate (hey maybe that’s a good question for the Agree/Disagree feature of the Costco Connection magazine!). In this case the potential for saving someone’s life far outweighs the “privacy” aspect for me.

    I am well aware that Costco tracks what their members purchase. Every receipt I get from them has my membership number on it, and every item in the store has a barcode/SKU–it’s quite easy to store that information in a database and use it for all kinds of things. If I wasn’t comfortable with that, I just simply wouldn’t shop at Costco.

    I think for me it comes down to the fact that I trust Costco to “do the right thing” with my personal shopping data. Time and time again, that company has shown itself to be able to make a profit without becoming unethical (i.e. markups limited to 14%, taking care of their employees, flexible return policy, etc.). I’m under no delusion that a corporation that large can be completely angelic, but IMHO Costco is better than most–the proof is in the pudding .

    You mentioned the many good ways Costco uses this data–recalls are maybe the most important because they could save lives, but also facilitating returns, and increasing efficiency of inventory – which should benefit shareholders and shoppers both.

    I also have no problem with them using it to protect themselves against fraud and theft (although I don’t know if they do or not). A perfect example is people scamming extra coupon books from the front desk and using multiple coupons in separate trips to buy sale items that are supposed to be limited to x per customer. I hope that Costco can get their system to track coupon use on a per account basis and enforce those coupon limits. That gives all members a chance to get in on a deal and protects Costco’s profits from resellers/ebayers.

    While the libertarian in me identifies with the desire for privacy, in this case the usefulness of tracking purchases wins out in my mind. Product recall notifications are the perfect example of that. It’s just a much more efficient and effective method of informing the customer of a potentially dangerous situation. I only make it to Costco once a month so I wouldn’t necessarily see a posted recall notice in a timely fashion. Other people have probably never seen them as they are posted near the return desk (at least at my store).

    If I didn’t trust Costco to use that data primarily for good then I would probably feel differently. And I do appreciate the airing of opposing viewpoints. It’s important to be aware of the good and bad aspects of data warehousing. But in this case, Costco is doing it the right way.

    And I suppose if one was really paranoid, he could make the purchase with a Costco Cash Card (which I think can be used without a membership card–someone correct me if I’m wrong). The purchase of the card itself could be traced to a particular membership number but the cash card itself can be used by anyone.

    Anyway, good post. I’m interested to hear what others think about this.

  7. 7 Mindy // 2009.01.28 at 11:23 am

    I have bought these peanut butter crackers. I got a letter in the mail yesterday informing me of the recall. I like the idea of letting me know. If we hadn’t already eaten them all I would have taken them back. I like that service.

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