There's A Big Catch In Verizon's Latest Offer

Companies have long thanked loyal customers with rewards programs, from credit-card companies (Capital One's No Hassle Rewards) to airlines (JetBlue's True Blue program). The latest company to roll out a rewards program is Verizon, but there's one big catch. Verizon's Smart Rewards program requires customers to allow their every move to be tracked for marketing purposes. So, let's be clear — it's not so much a rewards program as it is a trade: they get your privacy, you get bonuses.

The concept of big companies collecting big data on its customers is not a new one. Actually, it's pretty much old hat by now. Just look at Facebook, which knows essentially everything about you and your life — those targeted ads you see are all based on data the social network company has gathered from your profile, websites you visit, and other online interaction.

Are they giving you gift cards to TGI Friday's? Nope, didn't think so. What about discounted flights to Bermuda? Not at all. So what the bottom line of the Verizon tradeoff: If you're going to be tracked, you might as well be compensated.

In order to participate in Smart Rewards, customers have to enroll in Verizon Selects, a program that the company uses to collect users' data to hand over to third-party marketers. Verizon Selects, which is part of Verizon's Precision Marketing Insights portfolio, collects data on customers' location, web browsing, mobile app usage, as well as demographic and interest data to help marketers better customize their targeted ads.

How Smart Rewards Works

Once you've signed up for Smart Rewards, you can opt out of Verizon Selects, but those who stay with Selects will earn extra points every month. Verizon also emphasizes that all of your data will be anonymized before it's given to third parties. (Great!)

How to Earn Points

Customers who register for the Smart Rewards program automatically start with 10,000 points, plus extra points for every year they've been with Verizon. Then they earn points each time they do things like pay their bill online, sign up for paperless billing or auto pay, add a new line, trade in their phone through the Device Recycling Program, or purchase an accessory through Verizon Wireless.

The Rewards

So what's the swag like? Well, it's pretty standard. Rewards include gift cards to 150+ department stores, retailers, and restaurants (and an additional 10 percent off); more than 200,000 local deals like 50 percent off on shopping, dining, and entertainment; up to 40 percent off on 4,000+ brand-name merchandise like apparel, accessories, home goods, and electronics; and up to 40 percent off travel packages worldwide, including cruises, car rentals, activities, and more than 20,000 hotels.

So if you don't mind giving up more data to marketers, then Verizon's Smart Rewards program could be worth checking out. Otherwise, you can always stick to collecting frequent flyer miles.

Images: Getty (3)