QR Codes Are Right here to Keep. So Is the Monitoring They Enable.

SAN FRANCISCO – When people walk into Teeth, a bar in San Francisco’s Mission District, the doorman gives them options. You can order food and drinks at the bar, he says, or you can order via QR code.

Every table in the teeth has a card with the code, a pixelated black and white square. Customers simply scan it with their phone camera to open a website for the online menu. Then they can enter their credit card information to pay without touching a paper menu or interacting with a server.

A scene like this was a rarity 18 months ago, but no longer. “In 13 years as a bar owner in San Francisco, I’ve never seen such a profound change that led the majority of customers to change their behavior so quickly,” said Ben Bleiman, owner of Teeth.

QR codes – essentially a type of barcode with which transactions can be made contactless – have developed from the coronavirus pandemic into a permanent technical facility. Restaurants have taken them over en masse, retailers like CVS and Foot Locker have put them on checkout lists, and marketers have put them on retail packaging, direct mail, billboards, and TV ads.

But the proliferation of the codes has also allowed companies to incorporate more tracking, targeting, and analytics tools, which is red flags for privacy professionals. Because QR codes can store digital information, such as when, where and how often a scan is carried out. You can also open an app or website that will track people’s personal information or ask them to enter it.

As a result, QR codes have allowed some restaurants to build a database of their customers’ order history and contact information. At retail chains, people could soon be presented with personalized offers and incentives marketed in QR code payment systems.

“People don’t understand that using a QR code puts the entire online tracking machine between you and your meal,” said Jay Stanley, a senior policy analyst with the American Civil Liberties Union. “Suddenly your offline activity of sitting down to eat is part of the online advertising empire.”

QR codes may be new to many American shoppers, but they have been popular internationally for years. QR codes were invented in 1994 to streamline automobile manufacturing in a Japanese company. In recent years, QR codes have become widespread in China after being integrated with AliPay and WeChat Pay digital payment apps.

In the United States, technology has been hampered by clumsy marketing, poor consumer understanding and the hassle of needing a dedicated app to scan the codes, said Scott Stratten, who wrote the 2013 business book “QR Codes Kill Kittens” with his wife, Alison Stratten .

That has changed for two reasons, said Stratten. In 2017, Apple made it possible for the cameras in iPhones to recognize QR codes, which further spreads the technology. Then came the “pandemic and it’s amazing what a pandemic can do for us,” he said.

Half of all full-service restaurant operators in the US have added QR code menus since the pandemic began, according to the National Restaurant Association. PayPal introduced QR code payments in May 2020 and has since added them to CVS, Nike, Foot Locker, and around a million small businesses. Square, another digital payments company, launched a QR code ordering system for restaurants and retailers in September.

Companies don’t want to forego the benefits that QR codes have brought to their bottom line, said Sharat Potharaju, CEO of digital marketing company MobStac. Bargains and specials can be bundled with QR code systems and are easy to spot by looking at their phones, he said. Companies can also use QR codes to collect data on consumer behavior.

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“With traditional media like a billboard or a television, you can gauge how many people saw it, but you don’t know how people actually interacted with it,” said Sarah Cucchiara, senior vice president at BrandMuscle, a marketing firm last year Introduced a QR code menu product. “With QR codes we can generate reports on these scans.”

Cheqout and Mr. Yum, two startups selling technology for creating QR code menus in restaurants, also said the codes had benefits businesses.

Restaurants that use QR code menus can save 30 to 50 percent in labor costs by reducing or eliminating the need for servers to take orders and collect payments, said Tom Sharon, co-founder of Cheqout.

Digital menus also make it easier to convince people to spend more money by adding french fries or replacing more expensive liquor in a cocktail, and photos of menu items make them more attractive, said Kim Teo, a co-founder of Mr. Yum. When ordering through the QR code menu, Mr. Yum can let restaurants know what items are on sale so they can add a menu section with the most popular items or highlight dishes they want to sell.

It is these heightened digital capabilities that concern privacy professionals. Mr Yum, for example, uses cookies in the digital menu to track a customer’s purchase history and gives restaurants access to this information, which is tied to the customer’s phone number and credit cards. It is pilot software in Australia that allows restaurants to offer people a “Recommended” section based on their previous orders, Ms. Teo said.

QR codes “are an important first step in making your experience in the physical space outside your home feel like you are being followed by Google on your screen,” said Lucy Bernholz, director of Stanford University’s Digital Civil Society Lab.

Ms. Teo said that each restaurant’s customer data was only available to that company and that Mr. Yum did not use the information to reach customers. It also doesn’t sell the data to third parties, she said.

Cheqout only collects customer names, phone numbers, and proprietary payment information, which are not sold to third parties, Sharon said.

On a recent stormy evening at Teeth, customers shared mixed reviews of Cheqout’s QR code ordering system that the bar had installed in August. Some said it was convenient but added that they would prefer a traditional menu in an upscale restaurant.

“If you’re on a date and pull out your cell phone, it’s a distraction,” said Daniela Sernich, 29.

Jonathan Brooner-Contreras, 26, said ordering QR codes was convenient, but feared the technology would lose him from his job as a bartender in another neighborhood bar.

“It’s like a factory replacing all of its workers with robots,” he said. “People depend on these 40 hours.”

Regardless of customer feelings, Mr Bleiman said that Cheqout’s data showed that roughly half of Teeth’s orders – and up to 65 percent for televised sports games – are coming through the QR code system.

“You may not like it,” he said on a text message. “But they do!”

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