Online Shopping Tips: E-Commerce and You (Lesson – 5 – Be Aware of Cookies and Behavioral Marketing)

Online merchants as well as other sites watch our shopping and surfing habits by using “cookies,” an online tracking system that attaches pieces of code to our Internet browsers to track which sites we visit as we search the Web.

“Persistent” cookies remain stored on your computer while “per-session” cookies expire when you turn the browser off. Online merchants use cookies to recognize you and speed up the shopping process the next time you visit. You may be able to set your browser to disable or refuse cookies but the tradeoff may limit the functions you can perform online, and possibly prevent you from ordering online.

Privacy advocates worry that as more and more data is compiled about us — without our knowledge or active consent — it will be combined to reveal a detailed profile, even our actual identities. This data is often collected to market goods and services to us, encouraging us to buy them. There are a number of companies that specialize in targeted online advertising called “behavioral marketing.” Companies say consumers benefit by being exposed to more targeted advertising and that online merchants can make more money more efficiently by targeting the right shoppers.

For example, you might buy a book on golf from Amazon, visit the Professional Golfer’s Association site, purchase golf shoes at Zappos, and search online for golf courses near your home. When you do, your computer’s Internet Protocol (IP) number could be used to generate golf-related ads. When you open the USA Today site to read the morning news, you may see an ad offering you a new set of clubs at a discount. When you go back to Amazon later that day you might be offered a biography of Tiger Woods.

What if your behavioral marketing profile is shared with others, without your permission? You might not care if a drug company shares your prescription drug information with a coupon service to save you money. But what if that same information were obtained by your employer, resulting in more expensive health insurance coverage?

Consumer groups have asked the Federal Trade Commission (FTC) to require companies to get consumers’ permission (opt-in) before collecting or sharing any personal information about them, such as their computer’s IP number. Many of these groups also recommend creating a “Do Not Track” list for those who do not wish to be followed online, patterned after the widely used Do Not Call list.

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