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The Privacy Club : An exploratory study of the privacy paradox in digital loyalty programs

  • Johansson, Lilly
  • Rystadius, Gustaf
Publication Date
Jan 01, 2022
DiVA - Academic Archive On-line
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Background: Digital loyalty programs collect extensive personal data, but literature has so far neglected the aspect of privacy concerns within the programs. The privacy paradox denotes the contradictory behavior amongst consumers stating privacy risk beliefs and actual behavior. Existing literature is calling for a dual perspective of the privacy paradox and digital loyalty programs to find the underlying reasons for the contradictory behavior. Purpose: The purpose of this study was to explore (1) if and when privacy concerns existed in digital loyalty programs and (2) why consumers overruled their privacy concerns in digital loyalty programs. Method: A qualitative method with 18 semi-structured interviews were conducted through a non-probability purposive sampling of consumers within digital loyalty programs. The findings were then analyzed through a thematic analysis to finally construct a model based upon the given research purpose.  Conclusion: The findings suggest that consumers experience privacy concerns in digital loyalty programs from external exposure to privacy breaches and when consumers felt their mental construct of terms and conditions were violated. Four themes were found to influence why consumers overrule their privacy concerns and share personal data with digital loyalty programs, relating to cognitive biases, value of rewards received, and digital trust for the program provider. The findings were synthesized into a model illustrating the consumer assessment of personal data sharing in digital loyalty programs and the interconnection between the influences.

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