Evan Schuman's StorefrontBacktalk

Then there’s the opposite issue of protection. Far from protecting kids, underage E-Commerce needs to help protect retailers. Kids have been agreeing to buy products and then, after taking possession of the product, declining to pay, because a minor can’t enter into a purchase contract.

Then there’s age-verification, which is problematic online and even becomes an issue for kiosks.

But arguably the most interesting age-related in-store issue is a matter of purchase history, CRM and aging out. Given that almost no chains maintain extensive histories of children’s purchase habits—and they are only slowly collecting teenage purchase activity—this is creating legions of 18 year olds who materialize on the retail landscape as blank slates with no history.

That’s been the case for all of the 20th Century. The difference now is that there are E-Commerce histories of these new shoppers, and those histories sometimes go back to when they were 7 or 8 or younger. (Don’t get me started with how I felt when I saw my at-the-time 5 year old surfing Amazon.) Even if you buy into the theory that juveniles cannot be marketed to, 18 year olds certainly can be. What are the ethical implications of using all of that child-CRM data once that child becomes an adult? At least one marketing firm is preparing for such a possibility.

Will Congress weigh in and throw in consistency with all of these contradictions? Congress has a strong history of only weighing in on such matters when the issue is at least five or more years out of date, so no imminent help will be coming from that quarter.

So what should retailers do? Until the law changes—and state laws could change, especially in places like California and New York, much more quickly than federal laws—I’d argue for no restrictions on what data is collected from children. If for no other reason, that data can be used in aggregate to make better decisions and in customer-specific CRM form to use when the customer becomes an adult.

Personally, even as a parent, I can’t name one specific issue with direct-marketing to children that—and this is critical—isn’t already being done. Kids are too impressionable? Fine, ban TV commercials on shows aimed at kids. Kids have insufficient judgment to make financial decisions? True, but if the child has access to the store and has access to money, it’s hard to blame retailers for providing what is being sought.

StorefrontBacktalk Legal Columnist Mark Rasch suggests careful online wording to avoid conflicts with the federal Children’s Online Privacy Protection Act of 1998 (COPPA). An e-tail site “that says, ‘We won’t collect information about kids’ might bind them to never collect information about kids—ever. Much better to say, ‘We will comply with COPPA’ or ‘We won’t collect info about kids online,'” Rasch said.

It’s actually even worse than that, because a site most likely has no idea if the visitor is underage. So that would suggest, “we won’t collect info about kids online, when the kid tells us he/she is a kid.”

Rasch also points out much of even the online law speaks less to not tracking and more to not tracking without parental permission. For in-store, that may not be much of an issue.

“When Mommy Smith buys little Jeffrey a jacket using her loyalty card, the information is dutifully collected and stored. There is little risk that 10-year-old Jeffrey will independently buy something using a loyalty card and cash. So the loyalty card might be able to distinguish between purchases by little Jeffrey and his 8-year-old brother Sam (who has his own loyalty card) but doesn’t really provide much more information than the retailer can already get from mom and dad. Sure, it might track in-store purchases by cash, but the kid has to present the loyalty card to initiate the tracking. Not too risky,” Rasch said. “It also doesn’t seem too likely that a kid under 13 will sign up in person at a store for a loyalty card without mom and dad’s permission. Because the point of COPPA is to get parental permission for the collection of information about kids under 13, adding a simple parental signature requirement (even with some proof of age) should solve that problem.”

Retailers can be respectful in how far they go with marketing to children, but is the message here that misleading adults is OK? The FTC is supposed to make sure that all marketing is not misleading, and as long as that is the case, I’m not so sure that limiting children’s marketing makes sense anymore.

Then again, this gets us into the perception versus reality issue. Even if it’s perfectly fine to collect data and to then market to children, it’s going to be perceived as evil and reprehensible. That’s where JCP’s Ron Johnson dropped the lollipop. Those are perfectly good thoughts and ideas to have. Saying them out loud, though, at an analyst event when there’s not a full-blown marketing plan backing up the comments, is just asking for trouble. Good thing no one noticed he said it.