What's the deal with Facebook Deals?

Facebook Deals sounds like an easy way to snag cool offers. But don't get comfortable. You may check in, but your data may never check out.

The location-based services gold rush is now officially underway.

Ever since smart phones arrived on the scene, people have been predicting that the McDonalds and Starbucks and Wal-Marts of the world would beat a path to our pockets, beaming deals and discounts to our phones in an effort to lure us inside.

It took Facebook to figure out how to make it happen.  Facebook Deals is the first major service that marries your location to your wallet. It won’t be the last. 

How Deals works couldn’t be simpler: Say you check into your local Farbucks Café via Facebook Places on your mobile phone. There might be a coupon you can redeem for a free cruller. Who could turn down a free cruller? Show the coupon to the barista to redeem your coupon and you’re halfway to pastry heaven.

[ See also: This ad has been brought to you by you, part I ]

Better yet, you could stroll down the street and find out if any of the shops you’re passing by are offering freebies or discounts. Simple, fast, easy, and dangerously addictive. (I can think of a few schnorrers who would kill for this kind of service.)

Personally, I carry a dozen loyalty cards in my wallet entitling me to a free burrito or latte or oil change after X number of purchases. All of those go away once these businesses convert to Facebook Deals. That alone could make the service worth it.

The good news about Deals is that it’s opt in. You have to actively choose to use Facebook Places and check in (though it’s still possible for your friends to check you into places even if you don’t, unless you disable this in your privacy settings). For once, Facebook doesn’t assume you want to be checked in and make you opt out.

So what’s the catch? That is the 64 billion dollar question.

As far as I can determine, right now there is no catch.  Facebook Deals sounds as close as you can get to getting something for nothing. But it’s not likely to stay that way for long.

Unlike a loyalty card that gets punched six times and discarded, your check-in data can persist for a virtually infinite amount of time. The question is, where does that data persist and who does it belong to? Is it Facebook’s? Does it belong to the business in question? Is it stored somewhere, and if so for how long? What happens to it? Is it tied to our Facebook profiles? Do the businesses know who we are?

I’ve scoured the Facebook privacy policy, but it does not appear to have been updated to account for location information shared via Deals. (Or if it’s there, I can’t find it.) That’s extremely worrisome to me.

Businesses may use Deals at first because it makes them seem hip and cutting edge, or they might use it to drum up new business. But eventually they’ll want to use it to gather and analyze data on their customers (because they’d be stupid not to). My best guess is that, if Farbucks offers you a free cruller, they’ll want some information in return. What they do with it from there is anyone’s guess – and you may never find out. My local coffee shop doesn’t post a privacy policy on its cash register.

Facebook Deals is just the beginning. I’ll bet there are dozens of companies watching this experiment in mobile marketing to see how it pans out before leaping in feet first. And some of them may not be so polite as to wait for you to check in, ask permission first, or give you a way to turn off the virtual spigot.

Coupon spam, anyone?

ITworld TY4NS blogger Dan Tynan never goes anywhere without his Flaming Amy’s loyalty card; he has snagged more free burritos than any human should probably ever eat. Visit his snarky humor site eSarcasm (Geek Humor Gone Wild) or follow him on Twitter:@tynan_on_tech.

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