Americans are becoming increasingly aware of the risks associated with data breaches and the exposure of their personal data. Despite being fairly aware of the dangers of data breaches, Americans are still willing to trade away their personal data; some for as little as a 5-10% discount while shopping online.
A recent study from Incogni shows a kind of Dostoyevsky-ian commentary on people acting against their own interests. The research, which surveyed over 1,000 Americans across different age groups and income levels, showed that 95% of respondents were worried about data breaches and their personal data being exposed. But within the same group, 78% of respondents agreed that they would be willing to trade (or often already do trade) their sensitive information for minimal economic incentives, such as minor discounts or free shipping.
Nearly 1 in 5 respondents (19%) would agree to trade their personal data for a discount as small as 10%. An additional 6% would accept even less, willing to share their information for just a 5% discount. In other words, for nearly a quarter of the respondents, the economic incentive to share personal data didn’t need to be particularly substantial. A modest discount outweighed concerns about privacy and security.
Generational differences were also observed in the report. Millennials showed the highest willingness to trade data, with 82% saying they would exchange personal information for shopping perks. Baby Boomers were only slightly more cautious, with 72% expressing willingness to make such trades.
It is then safe to claim that most Americans are willing to trade data for financial incentives, but that willingness varied significantly when respondents were asked about the types of data that they’d be willing to share. This data ranged from run-of-the-mill ecommerce data to deeply sensitive personal information. 42% of the respondents would trade their phone numbers, and 41% their addresses, all fairly common data points. Other responses were more compelling. 20% of respondents would share their web search history, while 15% would disclose their political views, and 12% would be comfortable marking their sexual orientation, all in the name of eking out financial benefits from an online marketplace.
Americans’ willingness to trade data for online shopping benefits becomes a much more nuanced statistic when paired with the fact that a quarter of the respondents (26%) reported having been affected by a retailer data breach, meaning their phone numbers, email addresses, and other personal information may have been leaked and potentially sold on the dark web. An additional 16% are unsure whether they've been affected.
The frequency of online shopping seemed to correlate with breach exposure, according to the report. Among reported “daily” online shoppers, 47% reported having their data compromised, compared to 30% of “weekly” shoppers, and 21% of “monthly” shoppers.
The researchers also observed a link between opt-in rates and breach risk: 32% of those who always opt in to marketing communications report experiencing a breach, compared to 19% of those who never opted into marketing communications.
The Gen Z demographic lowest breach rates (64% claiming they have not been affected), but it’s unclear whether this indicates that they truly experience fewer breaches. Incogni’s researchers suggest that this discrepancy might just be a sign of low awareness about data privacy issues among younger consumers, rather than actual lower breach rates.
Income and location also signalled differences in shopping behavior. High-income individuals were more likely to frequently shop online, with 67% shopping at least weekly, compared to 45% of average-income and 39% of low-income respondents. “Urban dwellers” shop online more than their rural counterparts: 59% of urban residents shop weekly, versus 40% in rural areas.
When it comes to trusting retailers with personal data, Americans showed high levels of trust in some retail brands, while far less in others.
Grocery chains received the most confidence, with 83% of respondents expressing moderate to high trust in their data practices. Large physical department stores and American online marketplaces also saw higher trust signals, with 81% expressing confidence in each.
On the opposite end of the trust meter, foreign online marketplaces faced moderate skepticism. Over 56% of respondents rated their trust in foreign retail brands from low to none, with only 44% expressing moderate to high trust. As perhaps expected, people distrust the handling of their data by foreign-owned entities, but only just a tad less than their domestic ones.
The research also found that “larger” global brands — despite being frequent targets of high-profile data breaches (such as recent incidents at Victoria's Secret and Ahold Delhaize USA) — still command more trust among consumers than smaller, local businesses.
The surveyed Americans generally believe that retailers should be allowed to collect order-related data, such as phone numbers (60%), addresses (60%), and real names (53%). However, only 16% think search histories should be collected, and just 10% believe Social Security numbers are justified.
Despite these preferences, the research shows many Americans will share far more sensitive information than they believe retailers should collect. That is, if the price is right. The higher the discounts seemed to offer, the more willing participants would be to trade their personal data for a financial benefit.
Darius Belejevas, Head of Incogni, offered some thought on these findings: “The immediate gain of activating a discount or other shopping perks feels far more real than the abstract risk of a data breach or identity theft. It’s just easier to ignore a future threat than to pass up ‘now’ reward."
He added, "People may not fully grasp how serious a threat exposed personal data can be. From spam and scams, to identity theft, or even physical harm, all these are enabled by giving internet strangers access to personal information. If these risks become reality, the damage could potentially negate all the combined savings received from trading personal data.”
The study highlights how economic incentives override privacy concerns, surprisingly, even when those privacy risks are somewhat understood by consumers. Whether through habit, a lack of awareness, or simple economic calculation, Americans appear to have accepted personal data as a kind of currency in digital commerce, while paradoxically expressing deep concern about giving up that data, knowing it could fall into the wrong hands.
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