Analysis: As coffee chains hope to emulate the success of Tesco's loyalty card, where will it end?

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As Tesco's Clubcard loyalty scheme has demonstrated, information on your customers is a valuable commodity. The supermarket has attributed much of its extraordinary growth to the scheme, which records every purchase made by its holders.

Last month, Starbucks and Costa Coffee launched enticing cash card schemes that can be topped up online or in store. The success of these cards is almost guaranteed. In the US, 100 million Starbucks cards have been activated since the scheme launched in 2001.

Should consumers be worried? The coffee cards are likely to be just the start of a trend towards branded cash loyalty cards from all market sectors. And we may be issued with similar cards that provide access to government services. But where is all this extra data going to be stored and what governs its use?

The Government insists it will respect the public's rights and privacy, but not everyone believes that. A poll in The Guardian showed that more than 60 per cent of GPs feared that data held on the proposed "data spine" would be vulnerable to hacking, bribery and blackmail. Such fears, and doctor's subsequent refusal to use the system, are likely to delay the introduction of a national medical database designed to bring efficiency gains to the NHS.

It seems business is still trusted more than the Government. "Most consumers are not aware of how much data is stored about them, but many wouldn't care if they were," says Peter Reid, chief privacy officer at EDS.

He points to research carried out in the US, which found that around 60 per cent of the public were of the opinion that companies could have their data as long as they didn't abuse it.

The proliferation of data gathering devices is likely to continue until people decide that their data is being abused - or more likely, no longer feel they're getting a good deal in return for being watched.

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