Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.
“I own a retail store and want to start a discount/loyalty program. Can I use a customer’s driver’s license as the discount card that I scan with my cash register each time they purchase?”Some states have restrictions on who may scan the magnetic stripes and/or bar codes on driver’s licenses. For example, under a Texas law, only law enforcement and banks may do so. In other states, however, there is no restriction. You may be able to ask the Department of Motor Vehicles in your state whether there are such restrictions.
Question: In any event, even if it’s legal, using such information may not be advisable; unless you are absolutely assured of the privacy and security of that information with your computer systems, scanning and storing the information contained on driver’s licenses could create significant risk and legal liability. For example, if your system was ever breached and if that information was stolen, you could be subject to a variety of privacy laws, including the requirement to notify all your customers of the breach and risk to their privacy.
Answer:
You might want to consider avoiding these risks, and at the same time take an opportunity to strengthen your branding and marketing by considering a store branded “club card.” You may find that creating your own club card may be no more expensive and will give you greater flexibility, all the while avoiding any increased risk of liability. This may be one of those situations where avoiding the risk actually can lead you to a better business opportunity.
