Verizon is prepping for the launch of a new loyalty program that will reward customers with points for every dollar spent at the carrier. The program includes a component that hinges on customers consenting to have their location tracked so that relevant advertisements can be served to their phones. 

Enrollment in something called ‘Verizon Selects’,  an opt-in program that tracks browsing and location data, will initially be mandatory in order to take advantage of the new Verizon "Smart Rewards” point-based loyalty program. Customers can then leave the Selects program if they choose but those who stay with the tracking program will receive Smart Rewards points for their participation in that program. 

“Simply put, Verizon Selects will use location, web browsing and mobile application usage data, as well as other information including customer demographic and interest data, to create specific insights,” Verizon explained in a post on the company’s website that outlines the new program. 

Verizon Selects will then analyze the information that is collected about customers to see whether they fit into certain audiences Verizon or third-party marketers are trying to reach. Verizon hopes the program will allow it to deliver more relevant ads via email, text, postal mail or online or mobile advertising.

Verizon stressed that information gathered from Selects will be anonymized before being served to advertisers, and spokeswoman Debi Lewis said transparency was a key concern of Verizon’s.  

“We’re giving the customers full information on both programs so they can choose what they want to do,” Lewis said. “I would call it a program that gives back to our customers by giving them access to discounts on merchandise, other offers and great rewards. “

Verizon Smart Rewards will be available beginning July 24 to all customers on postpaid accounts. Those who sign up from the program will receive 10,000 rewards points when they register. 

Verizon promises the points will be redeemable for savings and discounts up to 40 percent on brand-name merchandise from more than 200 brands. Customers can also take advantage of offers on local shopping, hotels, travel and dining redeemable directly from their wireless device. 

With the Selects program, Verizon is tackling a particularly thorny privacy issue, but the tide may be turning on customer perception around sharing their location data. According to a recent IBM report, the percentage of consumers willing to share their current location via GPS with retailers nearly doubled year-over-year to 36 percent. Roughly 38 percent of consumers would provide their mobile number for the purpose of receiving text messages and 32 percent would share their social handles with retailers.