Customer Data, Loyalty Programs and the Online Channel in a Retail Sale
An independent store’s relationships with its customers increasingly live in data as well as memory. Email lists, loyalty program records, purchase histories, the store’s website and its social media following can all help a new owner reach regular customers after the sale. But retail customer data comes with legal and practical questions about what can be transferred, how it may be used and what obligations come with it. Buyers should understand those questions before assuming the data, the loyalty program or the online channel will transfer smoothly.
This article is general information for buyers and sellers of existing, operating specialty retail stores that may also sell through their own website. Privacy, data security, consumer protection, gift card and marketing laws vary by state and change over time. Buyers and sellers should have these matters reviewed by qualified counsel. Nothing here is legal advice.
What Customer Assets a Store May Have
- Customer lists and purchase histories: records kept in the point-of-sale system or elsewhere
- Email and text lists: contacts who agreed to receive marketing from the store
- Loyalty programs: points, rewards or member benefits customers have earned
- Gift cards and store credit: balances the store has promised to honor
- Website and domain: the store’s own site, online store settings and product content
- Social media accounts: pages and followers associated with the store’s name
Transfer Questions for Counsel
Whether customer data can be transferred, and how it may be used afterward, may depend on what the store’s privacy policy said when the data was collected, the consents customers gave and applicable law. Buyers should not assume they can use every email address or text contact for marketing. Counsel can review whether notices to customers or other steps are appropriate.
Loyalty Programs and Gift Cards
Outstanding loyalty rewards and gift card balances are obligations the buyer may inherit, and customers will expect them to be honored. The purchase agreement should address how these balances are measured, whether the price is adjusted and who is responsible for each. Gift card rules vary by state and should be reviewed with counsel.
The Website, Domain and Accounts
Buyers should confirm who legally controls the domain, hosting, online store, payment settings and social media accounts. Accounts registered in an owner’s personal name may need to be transferred carefully, and the buyer should receive administrator access at closing. Online sales history, return rates and fulfillment costs should be reviewed alongside store sales.
Data Security
Buyers should ask how customer and payment information has been stored and protected, whether the store has experienced any data incidents and what systems will be transferred. Payment security obligations and any past issues should be reviewed with qualified advisors. Our retail store due diligence checklist includes these items.
How Customer Assets Affect Value
A well-maintained, permission-based customer list and an active online channel may support confidence in repeat sales after the transition, while unclear data practices may add risk. See our guide to retail store valuation.
People Still Matter
Data alone does not keep customers. Staff who know regulars by name and the seller’s introductions often matter as much. See our article on retail store employee retention. Sellers preparing for a sale can find related guidance in our article on how to sell a retail store, and buyers can see where this review fits in our guide on how to buy a retail store.
US Professional Funding helps buyers finance the acquisition of existing, operating retail stores, including stores with an established online channel. Learn more about our retail business acquisition financing.
