Thinking about the last time you shopped in a store, were you asked if they could send you your receipt by e-mail? It is a question asked with greater frequency. For the cynical amongst us, we assume that this is so the retailer can send us their latest offers and marketing materials, and - to a certain extent - that is true, but is this a loophole to the e-mail marketing rules for retailers?
The short answer is no! For the longer answer, keep reading on the recent investigation by Which? and what retailers need to do to be compliant with the rules.
Which? arranged for mystery shoppers to attend shops of 11 large UK retailers and ask to be provided with an electronic receipt, rather than a paper receipt, but indicate that they did not wish to be sent marketing material.
It was discovered that some major retailers including Mothercare, Schuh, Halfords and Gap sent e-receipts to customers, which included promotional marketing. For example, one retailer had attached the e-receipt to an email which predominantly contained marketing information.
Why is this a problem?
The retailers concerned were in breach of their legal obligations regarding data protection practices and direct marketing.
Alex Neill, Which? Managing Director of Home Products and Services, has stated that, “More and more shops are offering e-receipts, which can be convenient for shoppers, but our investigation suggests not all shops are aware of the law.”
So, what are the laws that retailers should be concerned about?
Direct marketing rules
These rules state that direct marketing e-mails must not be sent to new customers, unless the customer has provided prior opt-in consent to receive such messages or the “soft opt-in” exemption applies.
The soft opt-in exemption for e-mail marketing will however only apply where:
- The customer has provided their details as part of a sale or negotiation
- The intended marketing message contains a similar product or service
- The customer has a simple means of refusing unsolicited marketing at the time their details were collected and is given a simple way of opting out in every future message
So, if a retailer cannot apply each of the above three elements, they cannot rely on the soft opt-in exemption and are prohibited from sending marketing wording along with an e-receipt. The retailer should obtain the customer's opt-in consent to rectify this.
Additionally, the ICO has already held (when investigating FlyBe and Honda) that sending an e-mail to a customer seeking their consent to receive marketing e-mails itself constitutes direct marketing, and is therefore subject to the direct marketing rules. So, retailers should not be using e-receipts as a way to obtain consent for marketing e-mails.
Data protection principles
These retailers were also in breach of multiple data protection principles.
Lawful, Fair and Transparency Principle: This means that the retailers should have told customers that their information would have been used for marketing purposes to meet this principle.
Purpose Limitation Principle: This means personal data collected for specific purposes must not be subsequently processed in a manner that is incompatible with those initial purposes. The retailers collected their customer’s personal data was collected in order to provide the customer with an e-receipt but was subsequently used for a different and incompatible purpose - to send marketing information.
Are you a retailer? Read our top tips for compliance:
Given that retailers are dealing with consumer customers on a daily basis, this means they have the ability to collect a lot of personal data. Retailers must make sure they are handling this data compliantly, and that they are implementing procedures to legally collect data for email marketing.
- If you want to use e-receipts as a method for sending marketing messages make sure you have prior consent from the individual to do this or you can rely on the soft opt-in exemption.
- Update your privacy notices to cover these types of practices and direct your customers to them.
- Offering employees training may increase awareness of the relevant legal requirements within your organisation.
If you would like more information on complying with the direct marketing rules, please contact Val Surgenor.