When it comes to saving on groceries or trips to the mall, Nichole Schaubroeck is a pro.
She scours flyers and websites, alerting her @couponcutiecanada Instagram account鈥檚 254,000 followers to supermarket sales and deals at the likes of Lululemon or Amazon.
But one of her tried and true savings methods 鈥� apps like Checkout51, Caddle, Drop, Eclipsa, which offer gift cards, points and cash back in exchange for uploading receipts, tracking purchases or completing surveys 鈥� poses a mystery to the savvy shopper.
鈥淭he purpose of these apps is to collect data mainly, from my understanding, but I don鈥檛 know for sure,鈥� said Schaubroeck, who lives in Dominion City, Man. about 100 kilometres south of Winnipeg. 鈥淚 don鈥檛 know a ton about that side of it.鈥�
Schaubroeck鈥檚 right about the apps collecting data, but where does the information go and who is really profiting from it?
Many of the apps make money from contracts with retailers and brands wanting to trigger purchases, reward loyal customers and learn more about how specific demographics shop. Customers鈥� submitted receipts, linked credit cards and completed surveys help the apps deliver on their client鈥檚 demands.
The information the apps deal with can be incredibly value for Canadian brands, said Ransom Hawley, who started a cashback app seven years ago, after working for Ziploc- and Windex-maker SE Johnson.
鈥淚t was just really difficult for me to get good data and insights that were Canadian and recent,鈥� he recalled.
鈥淚magine presenting insights to Walmart and the data being six months ago from the U.S., they鈥檇 just get laughed out of the room.鈥�
A happenstance meeting with Apple co-founder Steve Wozniack convinced him to build Caddle, a St. Catherine鈥檚, Ont. company doling out cheques for uploaded receipts, surveys and reviews.
Daily surveys net users five cents each. An uploaded receipt from stores like No Frills, Dollarama, Home Depot and Sephora can make them between 10 cents and one dollar.
The receipts help Caddle learn which customers have bought products featured on the app, so it can validate that it prompted a purchase.
Other brands want Caddle to land their products reviews. The receipt identifies when someone bought a target item, so Caddle can offer them money for writing a review.
The final way Caddle makes its money is through surveys, which help clients draw conclusions about the shopping habits and opinions.
While Hawley鈥檚 heard of 鈥渂ad actors鈥� mishandling data, he said Caddle is upfront about its policies from the moment users enroll.
鈥淭here鈥檚 a clear disclaimer there that says 鈥榟ey, this is how we鈥檙e going to use your data鈥� and it鈥檚 not buried somewhere and in legalese,鈥� Hawley said.
It鈥檚 a 鈥渕isconception,鈥� he added, that companies like his collect data and pass it along to clients with people鈥檚 names and other identifiable details.
鈥淲ith the things that we sign with like the Walmarts and Nestles, they don鈥檛 want personally-identifiable data, because it makes them liable,鈥� he said.
鈥淪o the vast majority of the data that we sell is just aggregated and anonymized.鈥�
Truly anonymized data is stripped of identifiable information through a technical process, so even if it is found, it cannot be tied back to a person, said Imran Ahmad, partner and head of technology at law firm Norton Rose Fulbright Canada.
However, some people confuse the term with de-identified data 鈥� data that removes names, but often leaves details like an address or a date of birth, which leaves room for reidentification.
Regardless of which apps use, it鈥檚 incumbent for them to handle data safely and be upfront about how information will be used, which Ahmad said most apps do.
Bob Fay, the managing director of digital economy at the Centre for International Governance Innovation, reviewed several money saving apps, but refused to sign up for any because the information they collect is 鈥渧ery invasive.鈥�
鈥淚t is very unclear how that information is being used. The only thing I think that is clear is that they are monetizing that information,鈥� he said.
鈥淭he old adage that there鈥檚 no such thing as a free lunch, or in the case of these apps, free money is true.鈥�
He worries people 鈥渄on鈥檛 fully understand what they are giving away with these apps,鈥� but a recent survey from Drop, an app offering points in exchange for access to customers鈥� credit card purchases and survey responses, suggests that isn鈥檛 a concern for many.
The Toronto-based company found 70 per cent of members it recently surveyed weren鈥檛 bothered by the sale of their data, 23 per cent were 鈥渟lightly bothered.鈥� Only the final two per cent were bothered.
鈥淭hey鈥檙e not against it, they鈥檙e very well aware of the fact that their data is being used, and they鈥檙e happy to opt into it because the value they鈥檙e receiving on the other side supersedes what鈥檚 happening there,鈥� said Amber Foucault, Drop鈥檚 chief product officer.
Drop鈥檚 userbase is primarily generation Z and millennials and the app, which advertises 鈥渂ank level security,鈥� promises it doesn鈥檛 provide user data to third-parties.
鈥淥nly anonymous aggregate information may be presented to third parties,鈥� Drop writes on its website.
Its clients are often companies looking for shopping insights or help targeting new customers or 鈥渂attleground customers,鈥� who consistently shop with their competitors.
鈥淚f a user hasn鈥檛 shopped at a beauty brand before we could offer them the opportunity to shop there and give them an incentive to maybe switch from their current beauty brand,鈥� Foucault said.
鈥淥r if that shopper is really loyal, we could give the beauty brand the opportunity to reward or incentivize them a little bit more because of that continued shop.鈥�
Using these methods, it has rewarded over $48 million to more than five million users, including many that flocked to the app in recent months as 20-year inflation materialized.
But Ahmad still has a warning.
鈥淧eople should know when they give something, they may be getting something, but just because you鈥檙e getting something doesn鈥檛 mean you don鈥檛 have to give,鈥� he said.
鈥淲ith anything that鈥檚 free, guaranteed there鈥檚 some component that鈥檚 a quid pro quo for it, so I think people have to go (into it) eyes wide open.鈥�
Tara Deschamps, The Canadian Press
