PRODUCT RECALLS ARE often a nightmare for grocers. They lead to lost revenue and more work for staff as they pull items off the shelf and respond to customer inquiries.
Now, an ongoing lawsuit against Safeway in the U.S. could bring loyalty programs into the mix.
In the suit, two loyalty cardholders argue the chain should have alerted them when products they’d purchased were recalled due to salmonella contamination.
It’s a case grocers will want to follow, as most don’t notify loyalty customers about recalls, says Judith Kirkness at Toronto consulting firm Traceability Matters.
Loblaw, the Canadian grocer Kirkness believes has the most advanced product tracing system, doesn’t alert its PC Plus holders about recalls because the loyalty program “does not have the ability to post these types of messages,” according to an email from the company’s public relations department. Instead, the chain posts recall messages through social media, press releases and on its website.
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The biggest hurdle to tracing recalled products to specific loyalty members is that most loyalty data is too vague. It typically reveals little more than the brand and type of product, says Pietro Nenci, vice-president of Costco’s foods division for Eastern Canada. It’s up to the customer to check their product against information such as the lot number or expiry date in the recall message.
Whether for competition or legal reasons, in the future, major retailers will be able to avoid the information gap by tracking products via the trade bar code (known as the GS1-128 code) all the way to checkout, says Kirkness. The good news? Marrying sophisticated product info with customer contact information might save grocers money.
Currently, Kirkness says, “If yogurt of a particular date is recalled, people start bringing back all the yogurts of that brand, and retailers typically give their money back.” If stores knew a customer bought from a safe batch, they could avoid some customers demanding a refund.
Plus, the more detailed information a loyalty program has, the easier it can be to quickly trace the source of a food-borne illness.
In the May issue of the journal Eurosurveillance, Dr. Helena Swinkels, medical health officer for the Fraser Health Authority in British Columbia, reported on how her team narrowed the source of a hepatitis A outbreak thanks to grocery store loyalty card data. With customers’ permission, the health authorities examined the purchase history of three of the individuals who fell sick and found they’d all purchased frozen fruit containing contaminated pomegranate seeds.
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“We picked up an outbreak extraordinarily early. Usually, you don’t pick something up that quickly,” says Swinkels.
Targeted recall alerts can also be good PR. Costco is one of the rare companies that alerts members about recalls, letting them know they may have purchased an offending product.
Costco spokesperson Lorelle Gilpin says members “are very appreciative of the fact that we’re calling them or sending them a letter.” The alerts help the company highlight its commitment to food safety “before customers hear on TV,” says Gilpin.
However, simply notifying customers who purchased a product may not be enough, according to Mary Thomson, a lawyer and product liability specialist with Toronto firm Gowlings.
Companies have an obligation to “anybody who can reasonably be anticipated to consume their product,” she says, which means any acquaintance of the purchaser. So grocers won’t be able to narrowly target recall messages to avoid mass panic.
Alerting individual customers has its downsides. There were more than 225 product recall alerts last year, according to Sylvain Charlebois, a professor in food distribution and policy at the University of Guelph. A significant portion of them were for minor mislabelling issues. And given “there’s still this negative connotation around food recalls,” says Charlebois, sending out targeted alerts could backfire.
Either way, grocers will have to proceed with caution.