This data-retentiveness puts these chains in a tricky position. Every retailer wants large quantities of CRM information from customers. Telling those same customers they don't have control over information about their store-branded credit-card accounts (as in, customers can access it themselves but can't have an aggregator collect it for them) risks turning the image of chains from a friendly retailer to that of a paranoid Big Brother—especially as chains start behaving more like banks.
The issue is with Mint.com, an Intuit service that lets customers pull together all their account balances from multiple banks and credit-card issuers onto a single PC screen. Customers sign up for the service and give Mint their logins and passwords for each account. Mint then collects and regularly updates the information for each account.
According to the New York Times, Nordstrom (which issues its own cards) notified customers last month by E-mail that it would no longer let Mint.com access the account information. Nordstrom said it would "explore a variety of options for online financial management services," according to the E-mail.
GE Capital, which issues cards for Amazon and Gap, has already pulled the plug on Mint's ability to access those retailers' customer accounts, citing security concerns. Nordstrom wasn't specific about why it cut off the service, except to say that there were costs associated with supporting the service.
To be clear, this might be mainly about money or competition. Maybe Nordstrom and GE Capital just want to be paid a fee when Mint accesses a customer account. Or maybe the card issuers hope eventually to compete with Intuit with their own money-management offerings. In any case, it's not the retailer who is pulling the plug—it's the card-issuing bank (in Nordstrom's case, that's a bank owned by the chain).
But that's not who customers will blame. They'll blame the store whose name is on the card.
After all, customers know that retailers want data about them. Retailers collect it directly, from third parties, through loyalty programs and POS transactions—pretty much any way they can. Sometimes they're legally required to get the customer's permission to collect and use the data. And the usual boilerplate in retailer privacy policies says that even though customers can't actually get access to that data, the data still belongs to the customer (although bankruptcy courts for Borders and other dead chains beg to differ).
Customers also know that they do have access to their account balances.Customers also know that they do have access to their account balances, and that once they log into their bank or payment-card accounts, they can hand that information off to whomever they please. So why can't they authorize someone else to access that information? If the chain can aggregate a lot of information about purchases and personal behavior, why can't customers have a third-party aggregate a lot of information about account balances?
There are very reasonable technical and legal answers to those questions, having to do with security and liability and business strategy. And customers don't care. Their question is simple: Mr. Retailer, you want to make it easy to get and use information about me. Why are you making it hard for me to get and use information about me from you?
It's the type of question that corrodes the warm, friendly feeling toward retailers that CRM and loyalty programs are built on. And it's going to get worse the deeper chains dive into financial services that have the store's brand on them but aren't directly controlled by the chain.
Store-branded credit cards are an old problem, and so are pre-paid debit cards with a retailer's name on them. But many chains are ready to raise the stakes: Costco already offers home mortgages, and a survey that came out on Monday (Dec. 3) said one-third of Americans would consider getting a mortgage from Walmart, which already does tax returns and makes small-business loans.
That's going to change the way customers think about CRM data and loyalty programs. It's going to give them more reasons not to trust the chain. (One reason they like the idea of a Walmart or Costco mortgage is probably that they trust Walmart and Costco more than their banker. How long do you think it will take for that to flip?) And the less they trust the chain, the more loyalty programs will be squeezed. The cost of financial services may be some lost CRM data.
There's no obvious workaround for any chain whose management has decided that financial services are a big business opportunity. There's no way of knowing how much those financial services will cut into CRM data growth—or whether they'll actually spur it, if the chain figures out how to keep customers happy on both the loyalty and the financial sides.
But it's already past time to start working out how you'll deal with that shift, because it's already started.