The Audit

David Clinton

You’ve certainly been asked (begged!) to join up for at least one loyalty “points” program – like PC Optimum, Aeroplan, or Hilton Honors – over the years. And the odds are that you’re currently signed up for at least one of them. In fact, the average person apparently belongs to at no less than 14 programs. Although, ironically, you’ll need to sign up to an online equivalent of a loyalty program to read the source for that number.

Well all that warm, fuzzy “belonging” comes with some serious down sides. Let’s see how much they might cost us.

To be sure, there’s real money involved here. Canadians redeem at least two billion dollars in program rewards each year, and payouts will often represent between one and ten percent of the original purchase value.

At the same time, it’s estimated that there could be tens of billions of unredeemed dollars due to expirations, shifting program terms, and simple neglect. So getting your goodies isn’t automatic.

Just why do consumer-facing corporations agree to give away so much money in the fist place?

As you probably already know, it’s about your data. Businesses are willing to pay cold, hard cash in exchange for detailed descriptions of your age, sex, ethnicity, wealth, location, employment status, hobbies, preferences, medical conditions, political leanings, and, of course, shopping habits.

Don’t believe it works? So then why, after all these years, are points programs still giving away billions of dollars?

Every time you participate in such a program, the data associated with that activity will be collected and aggregated along with everything else known about you. It’s more than likely that points-based data is being combined with everything connected to your mobile phone account, email addresses, credit cards, provincial health card, and – possibly – your Social Insurance number. The depth and accuracy of your digital profile improves daily.

What happens to all that data? A lot of it is shared with – or sold to – partners or affiliates for marketing purposes. Some of it is accidentally (or intentionally) leaked to organized criminal gangs driving call center-related scams. But it’s all about getting to know you better in ways that maximize someone’s profits.

One truly scary way this data is used involves surveillance pricing (also known as price discrimination) – particularly as it’s described in a recent post by Professor Sylvain Charlebois.

The idea is that retailers will use your digital profile to adjust the prices you pay at the cash register or when you’re shopping online. The more loyal you are as a customer, the more you’ll pay. That’s because regular (“loyal”) customers are already reliable revenue sources. Companies don’t need to spend anything to build a relationship with you. But they’re more than willing to give up a few percentage points to gain new friends.

I’m not talking about the kind of price discrimination that might lead to higher prices for sales in, say, urban locations to account for higher real estate and transportation costs. Those are just normal business decisions.

What Professor Charlebois described is two customers paying different prices for the same items in the same stores. In fact, a recent Consumer Reports experiment in the U.S. involving 437 shoppers in four cities found the practice to be quite common.

But the nasty bit here is that there’s growing evidence that retailers are using surveillance pricing in grocery stores for basic food items. Extrapolating from the Consumer Reports study, such pricing could be adding $1,200 annually to a typical family’s spending on basic groceries.

I’m not sure what the solution is. It’s way too late to “unenroll” from our loyalty accounts. And government intervention would probably just end up making things worse.

But perhaps getting the word out about what’s happening could spark justified mistrust in the big retailers. No retailer enjoys dealing with grumpy customers.

Be grumpy.

OTTAWA — It is an honor to speak before you at the Canadian Parliament.

My testimony will attempt to explain why China’s economic success is built on the backs of the largest number of displaced persons in human history.

It is estimated that these displaced individuals range between 300 to 400 million — it is equivalent to the total population of the United States being uprooted and forced to relocate. These displaced persons are invisible to the world, their sufferings unnoticed, their plights ignored.

In 1978, when economic reform began, China’s GDP was $150 billion USD.

In 2000, when China joined the WTO, it was approximately $1.2 trillion USD.

China’s current GDP is approximately $18 trillion USD.

In 2000 China’s manufacturing output was smaller than Italy’s.

Today it’s larger than America, Europe, Japan, and South Korea combined.

If you have ever wondered how China managed to grow so fast in such a short time, Charles Li, former CEO of the Hong Kong Stock Exchange, has the answers for you.

He listed 4 reasons: 1) cheapest land, 2) cheapest labor, 3) cheapest capital, and 4) disregard of environmental costs.

“The cheapest land” because the CCP government took the land from the farmers at little to no compensation.

“The cheapest labor,” because these farmers, without land to farm, were forced to find work in urban areas at very low wages.

The communist household registration system (hukou 戶口) ties them perpetually to the rural areas. This means they are not legal residents, and cannot receive social benefits that legal urban residents are entitled. They could be evicted at any time.

One well known incident of eviction occurred in November 2017. Cai Qi, now the second most powerful man in China after Xi Jinping, was a municipal official in Beijing. He evicted tens of thousands into Beijing’s harsh winter, with only days, or just moments of notice. Cai Qi made famous a term, “low-end population” (低端人口), and exposed CCP’s contempt of rural migrants it treats as second class citizens.

These displaced migrant workers have one tradition they hold dear — it is to reunite with their families during the Chinese Lunar New Year holiday, making this seasonal migration of 100 to 150 million people a spectacular event. In China’s economic winter of 2025 with waves of bankruptcies and factory closures, the tide of unemployed migrant workers returning home to where there is also no work, and no land to farm, has become a worrisome event.

Historically in the last 2,000 years, social instability has caused the collapse of many ruling regimes in China.

“The cheapest capital” is acquired through predatory banking practices, and through the stock markets, first to rake in the savings of the Chinese people; and later international investments by listing opaque, and state owned enterprises in leading stock markets around the world.

“A disregard of environmental costs” is a hallmark of China’s industrialization. The land is poisoned, so is the water; and China produces one-third of all global greenhouse gases.

Chinese Communist officials often laud their system as superior. The essayist Qin Hui has written that the Chinese communist government enjoys a human rights abuse advantage. This is true. By abusing its own people so brutally, the CCP regime has created an image of success, which will prove to be a mirage.

If you think the CCP will treat foreigners better than its own people, when it extends its power over you, please think again.