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My Not-So-Perfect Holiday Shopping Excursion With A.I. Chatbots

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With Shopify, Mercari and other retailers rolling out chatbots to help buyers, this holiday shopping season is the first to be powered by A.I.To help with my holiday shopping this year, I recently turned to a new personal assistant online. “I’m looking for a Christmas present for my mother, who spends long hours working,” I typed. “Is there something she can use in her office every day?”“Of course!” came the instant reply. “Does your mother have any specific preferences or needs for her office? For example, does she need organization tools, desk accessories, or something to help her relax during breaks?”So began my conversation with Shop A.I., a new chatbot from Shopify, an e-commerce marketplace. Over 10 minutes, Shop A.I. and I engaged in a question-and-answer session. I told the chatbot my budget and more about my mother, such as her need to alleviate back pain. Shop A.I. also asked me about my mother’s preferred design and color for an office chair.More people may eventually replicate this kind of shopping experience. A year after ChatGPT debuted, retailers around the world have started rolling out chatbots that are powered by generative artificial intelligence. That makes this holiday season the first when a slew of A.I. chatbots can help shoppers brainstorm and find presents for their friends and loved ones.In addition to Shopify, chatbots have come out over the past 12 months from Instacart, the delivery company; Mercari, a resale platform; Carrefour, a retailer; and Kering, which owns Gucci and Balenciaga. Walmart, Mastercard and Signet Jewelers are also testing chatbots, which may become publicly available as soon as next year.“In a way, it’s recreating an in-store environment, but online,” said Carl Rivera, a vice president at Shopify who oversees its Shop app, which hosts Shop A.I. He said the chatbot broke down people’s questions into key terms and searched relevant products from Shopify’s millions of sellers. It then recommends products based on reviews and a shopper’s purchase history.Retailers have long used chatbots, but previous versions lacked conversational power and typically answered just a few preset questions, such as the status of an order. The newest chatbots, by contrast, can process prompts and generate tailored answers, both of which create a more “personalized and authentic interaction,” said Jen Jones, the chief marketing officer of the platform Commercetools.Whether shoppers want this technology remains a question. “Consumers like simplicity, so they don’t necessarily want to have five different generative A.I. tools that they would use for different purposes,” said Olivier Toubia, a marketing professor at Columbia Business School.Nicola Conway, a lawyer in London, tried Kering’s luxury personal shopper, Madeline, in August to search for a pink bridesmaid dress for a spring wedding. Madeline was “intuitive and novel,” she said, but it gave only one recommendation, an Alexander McQueen corset dress. Ms. Conway did not end up buying it.Kering did not respond to requests for comment.Maggie Weber, a shopping influencer who uses the social media handle @refashionedhippie, said she tried Mercari’s chatbot, Merchat A.I., in May. She asked the chatbot to show her baseball cards, but she was instead offered baseballs — and then hats, bats and jerseys.“Merchat is still in its infancy,” Ms. Weber, 34, said. She added that she worried that if she gave the chatbot too much information, it would start directing personalized ads to her.A Mercari spokeswoman said Merchat used chat history only to recommend products and did not use personally identifiable information. She added that the search bar could be faster for customers who want a specific item, while the chatbot helped those who want “inspiration for gifts.”Such inspiration was exactly what I needed this season as I had only vague ideas for what to buy my 53-year-old mother and my 17-year-old cousin, Jenny.A screenshot of our reporter’s conversation with Merchat A.I., a chatbot that helps shoppers.So I tried Shop A.I. After telling the chatbot about my mother’s back pain and asking what I could buy to help her relax, Shop A.I. offered to find an ergonomic chair and asked my budget. When I said $100, it came back with a few pages of product results.“Can you help me to narrow it down?” I typed. Shop A.I. then asked about my preferred color for a chair. I said black.Shop A.I. returned more than 300 results, including a $159 camp chair from ROAM Adventure, a $179.99 reclining massage office chair from homrest and a $269.99 CosyGaming executive chair.“These don’t seem to be under $100,” I wrote, annoyed.“As a new chatbot, I’m still learning and sometimes the search results may not be accurate,” Shop A.I. replied. “Let me try again and find some black ergonomic chairs within your budget.”Shop A.I. returned more than 300 results for black ergonomic chairs, though few were under $100.Then, it added, “It seems that I’m having trouble finding black ergonomic chairs within your budget at the moment.”I ended up typing “black ergonomic chair” into the search bar myself and set a $100 price range. A $66.81 Victory Furniture gaming chair and a $47.96 massage office chair popped up, though they were too big and heavy to be gifts.Eventually, I asked Shop A.I. for alternative ideas and received five options, including seat cushions and standing desk converters.I chose the standing desk converter and gave Shop A.I. my $100 budget. This time, the chatbot showed options within my price range, including a $99 Risedesk standing desk converter. But most of the products did not have reviews, which I rely on while shopping online. I didn’t buy anything.Shop A.I. provided alternative gift recommendations, including standing desk converters.Shop A.I. was not great at finding a gift for my cousin, either. I wanted to buy Jenny some college dorm decorations featuring her favorite anime series, Violet Evergarden, which follows a character named Violet as she recovers from an unidentified war.But Shop A.I. appeared to decide that anything the color violet was connected to my query. It showed me wall art of purple mountains and posters of purple BMW cars.So I turned to Mercari’s Merchat. After asking for my cousin’s hobby (anime), age (17) and what she might prefer for college (dorm decorations), Merchat offered three gift ideas: wall tapestries, string lights and desk accessories in the theme of Violet Evergarden.Merchat showed me four products under each category, all of which were under my budget of $50. I ended up buying an $18 Violet Evergarden poster scroll for Jenny. (She later told me she wished I had gotten her something quirkier.)Emboldened by the experience, I asked Merchat to help find a present for my mother. “Would she benefit from a back support cushion, a heating pad or maybe a massage chair pad?” it asked.“What are the pros and cons of each?” I typed.Merchat said it couldn’t provide specific pros and cons for individual items. I changed my question to: “Which one is the easiest to use?”This time, Merchat was definitive: the back support cushion, which was portable. Merchat detailed the differences between a memory-foam cushion and a firmer one, then further grouped memory-foam cushions into three categories and displayed the top four results for each, all under $100.While I didn’t buy any because the styles were limited, it was a great starting point.“Thank you,” I wrote.“You’re welcome!” Merchat replied. “Happy shopping and have a wonderful time with your family!” More

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    For Many Small-Business Owners, a Necessary Shift to Digital Payments

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    The pandemic accelerated a transition to cashless payments, forcing a reckoning among small-business owners. But there are benefits: One owner said the switch saved her $3,000 a month.“Making It Work” is a series about small-business owners striving to endure hard times.When Egypt Otis opened her business, Comma Bookstore and Social Hub, three years ago in Flint, Mich., the pandemic was full blown. But her neighbors welcomed the literature and art she sold in her store that celebrated people of color, as well as the community programs she hosted.Despite the warm reception, Ms. Otis quickly found that she had a sales problem: Her customers wanted to pay with their cellphones.“I realized that people were hardly keeping a wallet or a physical card, which limited my ability to sell and make money,” Ms. Otis said. So she upgraded her transactions platform to include tap-and-go purchases on mobile devices. “People are not carrying cash,” she said. “It’s becoming obsolete.”The number of Americans who say they are “cashless” has jumped in the last five years. Forty-one percent of Americans said they did not use cash for their purchases in a typical week in 2022, up from 29 percent in 2018, according to a Pew Research Center survey released last October.Small-business owners increasingly are making the switch to cashless payments for several reasons, including rising consumer demand, faster checkout, lower labor costs and increased security. Those who wait risk losing revenue, experts say.But there are drawbacks to going cash-free, including a learning curve for entrepreneurs who may not understand how to set up digital payments, a lack of accessibility to credit cards for low-income consumers, and privacy concerns.Signs at a pizza joint in New York indicating it takes multiple forms of cashless payments, a switch that accelerated in the pandemic.Karsten Moran for The New York TimesJuanny Romero was an early adopter of digital payments for her small business. Fifteen years ago, when she founded Mothership Coffee Roasters, a chain of coffee shops in Las Vegas, she began using Square, a low-cost digital payments system for small businesses.“​​I was a young businesswoman and not astute,” she said. But Square saved her $3,000 a month in merchant fees for credit card processing.As Ms. Romero expanded her businesses (to four locations in Las Vegas, with two more on the way), she added more payment options, including Apple Pay and Google Pay.But she noticed a shift during the pandemic: Her customers no longer wanted to use cash, and her employees did not want to handle it. “We didn’t know where Covid was coming from,” she said. “There were still people bringing in cash, but it was scary and dangerous.”When the coin shortage hit in 2020, she ran out of cash altogether, but Ms. Romero found it saved on labor costs. “My managers were standing in line for two hours to deposit the cash,” she said. “I can’t get an armored car service to pick up $100 in cash.”Even so, customer demand prompted her to return to cash sales, which Ms. Romero said are holding steady at about 11 percent of her overall revenue. She said she would go cashless if the share dipped below 10 percent.A digital transaction at Mothership Coffee Roasters in Las Vegas.Bridget Bennett for The New York TimesThe pressure to adapt is growing. More that 2.8 billion mobile wallets were in use at the end of 2020, and that is projected to increase nearly 74 percent to 4.8 billion — nearly 60 percent of the world’s population — by the end of 2025, according to a study released in 2021 by Boku, a fintech companyThe United States lags other countries in adopting cashless payments. Among the most cashless countries in the world is Britain, where the pound makes up only 1 percent of all transactions, according to a report from Merchant Machine, a payment research firm based in London. But in the United States, some small-business owners do not understand the complexities of digital payments.“Smaller merchants, they don’t always have the knowledge and resources to know what to do,” said Ginger Siegel, who leads the North America small-business segment at Mastercard, which offers training to business owners like Ms. Otis of Comma Bookstore.Ms. Otis said she noticed an increase in sales when she began offering mobile payments, which made the checkout process faster. “As a retailer, you want to make the experience as efficient as possible,” she said. “It is a matter of survival.”A veteran using a tap-and-go device to collect donations for the Royal British Legion in London in 2020.Guy Bell/AlamyBenefits include immediate payment, increased sales and the ability to sell to customers who might use other currencies. “You have to set it up, but it’s worth it,” said Kimberley A. Eddleston, a professor of entrepreneurship at Northeastern University.But some business owners say they are hesitant to move too quickly, worried that today’s technology could become obsolete tomorrow. And there are compatibility and cost issues to consider, said Wayne Read, the chief executive of Forged & Formed, an online jeweler with a physical store, Studio D Jewelers, in Woodstock, Ill. In his jewelry sales, where items can be pricey, he said a speedy transaction might not be suitable. “We don’t want people to feel they have rushed their decision,” he said.Despite advances in technology, many Americans still have little or no access to financial services like credit cards and mobile wallets, although that is slowly improving. An estimated 5.9 million households did not have a bank account in 2021, down from 7.1 million households in 2019, according to a survey by the Federal Reserve.Rewards points displayed on a checkout screen at Mothership. Mobile apps allow for cashless payments and can increase customer loyalty.Bridget Bennett for The New York TimesAnother obstacle to adoption is privacy concerns: Some people prefer the anonymity that cash provides. And cash is perceived as a way for consumers to remain aware of expenditures. Complicating the transition to the digital economy, the recent banking turmoil in the United States has made many depositors question the security of financial institutions.But experts agree that cash is unlikely to go away. Consumers in lower income households continue to rely on cash for payments, according to the Fed survey.And small-business owners say that despite the speed and efficiency that cashless payments offer, cash is still a viable option for their customers.“At the end of the day, I know the people I serve,” Ms. Romero said. “I would feel conflicted if I didn’t do the right thing.” More

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    Mark Zuckerberg Prepares Meta Employees for a Tougher 2022

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    In an internal meeting this week, Mr. Zuckerberg said the tech giant was facing one of the “worst downturns that we’ve seen in recent history.”SAN FRANCISCO — Mark Zuckerberg has a message for Meta employees: Buckle up for tough times ahead.At an internal meeting on Thursday, Mr. Zuckerberg, the chief executive of Meta, said the Silicon Valley company was facing one of the “worst downturns that we’ve seen in recent history,” according to copies of his comments that were shared with The New York Times. He told Meta’s 77,800 workers that they should prepare to do more work with fewer resources and that their performances would be graded more intensely than previously.Mr. Zuckerberg added that the company — which owns Facebook, Instagram and other apps — was lowering its hiring targets. Meta now plans to bring on 6,000 to 7,000 new engineers this year, down from a previous goal of around 10,000, he said. In some areas, hiring will pause entirely, especially of junior engineers, though the head count will increase in other parts of the business, he said.“I think some of you might decide that this place isn’t for you, and that self-selection is OK with me,” Mr. Zuckerberg said on the call. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”The C.E.O.’s comments, which were some of the most sharply worded ones he has made to employees, reflect the degree of difficulty that Meta is facing with its business. The company, which for years went from strength to strength financially, has been in an unfamiliar position this year as it has struggled. While it enjoyed strong growth in the early parts of the pandemic, it has more recently grappled with upheaval in the global economy as inflation and interest rates rise.That economic uncertainty is hitting as Meta navigates tumult in its core social networking and advertising business. Mr. Zuckerberg declared last year that his company, which was renamed Meta from Facebook, was making a long-term bet to build the immersive world of the so-called metaverse. He has been spending billions of dollars on the effort, which has dragged down Meta’s profits.The company is also dealing with a blow to its advertising business after Apple made privacy changes to its mobile operating system that limit the amount of data that Facebook and Instagram can collect on its users.As a result, Meta has posted back-to-back profit declines this year, the first time that has happened in over a decade. In February, after a dismal financial report, Meta’s stock plummeted 26 percent and its market value plunged more than $230 billion in what was the company’s biggest one-day wipeout. In March, the company told employees that it was cutting back or eliminating free services like laundry and dry cleaning.In a memo to employees on Thursday, Chris Cox, Meta’s chief product officer, echoed Mr. Zuckerberg’s sentiments and said the company was in “serious times” and that economic “headwinds are fierce,” according to a copy of the memo that was read to The Times.“We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets,” Mr. Cox’s memo said. “We must prioritize more ruthlessly, be thoughtful about measuring and understanding what drives impact, invest in developer efficiency and velocity inside the company, and operate leaner, meaner, better executing teams.”Mr. Zuckerberg’s and Mr. Cox’s comments to employees were reported earlier by Reuters. A Meta spokesman said that Mr. Cox’s memo echoed what the company has said publicly in earnings calls and that it was being frank about its “challenges” and “opportunities.”In the internal meeting on Thursday, which was held via videoconference, Mr. Zuckerberg’s comments appeared to come out of a sense of frustration, according to one employee who watched the call. After someone asked whether the company would continue having “Meta Days” in 2022, an internal name for paid-time-off holidays, Mr. Zuckerberg paused and mulled aloud about how to answer the question appropriately, said the employee, who spoke anonymously because they were not authorized to speak.The C.E.O. then said the company needed to crack down and work harder than it had before, “turning up the heat” on internal goals and metrics used to rate employees’ performance. He said he expected some degree of turnover from employees who were not meeting those goals and that some might leave as a result of the intensified pace.But Mr. Zuckerberg noted that he was not averse to spending heavily on projects that matter for the long term and was not focused solely on profits. He cited the efforts on building the metaverse with virtual and augmented reality products over the next 10-plus years.Mr. Cox in his memo also said that Meta was continuing to focus on investing in Reels — the TikTok-like video product featured heavily in Instagram — as well as improving artificial intelligence to help drive the discovery of popular posts across Facebook and Instagram. Meta is also working on making money from its messaging apps and looking to more opportunities in e-commerce sales across the platform, he said.Internal recruiters at Meta said that after a surge of new hires during the pandemic, the company’s recruiting slowed this year. The company was mostly hiring for vital positions, and many roles were being filled internally, said two recruiters who spoke on condition of anonymity because they were not authorized to speak to reporters.There are no current plans to lay people off, two people with knowledge of the company’s plans said, who spoke anonymously because they were not authorized to speak. In chat room channels that accompanied the live broadcast of the employee meeting, some workers said they were celebrating cutting the “dead weight” after feeling that the “bar was lowered” for hiring over the course of the pandemic, according to comments that were described to The Times by one of the employees. More

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    How Tech Is Helping Poor People Get Government Aid

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    Even as the government expanded aid programs, many people faced barriers to using them. That problem is now being addressed with apps and streamlined websites.WASHINGTON — In making his case that safety net programs should be easier to use, Jimmy Chen, a tech entrepreneur, recalled visiting a welfare office where people on food stamps endured long waits to submit routine paperwork.They passed the time as people in lines do, staring at their phones — which had the potential to do the work online with greater convenience, accuracy and speed.The image of aid-seekers wasting time with a solution literally in hand captures what critics call an overlooked challenge for people in poverty: Administrative burdens make benefits hard to obtain and tax the time and emotional resources of those who need help.“Too much bureaucracy prevents people from getting the help they need,” said Mr. Chen, whose start-up, Propel, offers a free app that five million households now use to manage their food stamp benefits.Barriers to aid are as old as aid itself, and they exist for reasons as varied as concerns about fraud, the bureaucratic tension between accuracy and speed, and hostility toward people in need. But the perils of red tape have drawn new attention since the coronavirus pandemic left millions of Americans seeking government help, many for the first time.The government approved vast increases in spending but often struggled to deliver the assistance. While some programs reached most households quickly (stimulus checks), others buckled under soaring demand (unemployment benefits) or daunting complexity (emergency rental aid).“The pandemic highlighted how difficult these programs can be to access,” said Pamela Herd, a professor at Georgetown and an author, with Donald P. Moynihan, of “Administrative Burden,” which argues that excessive bureaucracy deepens poverty and inequality.The share of eligible people receiving benefits varies greatly by program: It is about 82 percent for food stamps, 78 percent for the earned-income tax credit and 24 percent for Temporary Assistance to Needy Families, or cash welfare, according to government estimates. That means billions of dollars go unclaimed.On his first day in office, President Biden issued an executive order asking agencies to identify “systemic barriers in accessing benefits,” with the results due in January.Shaped by forces as diverse as the tech revolution, welfare rights and behavioral psychology, the movement to create a more user-friendly safety net was underway before the pandemic underscored the perils of bureaucracy.Code for America, a nonprofit group, spent years devising a portal that makes it easier for Californians to apply for food stamps. Civilla, a Detroit-based nonprofit, helped Michigan shrink its 42-page application by 60 percent.In an age of ambitious social movements, the cry of civic tech — power to the portals — may seem obscure, but Mr. Chen, 34, says democratizing technology’s rewards is essential to social justice.“For someone like me, a phone is like a magic wand,” he said. “If I want to call a cab, there’s an app; if I want to book a hotel, there’s an app; if I want to get a date, there’s an app. It’s just incredibly unfair that we don’t apply more of this sophisticated knowledge to the problems of lower-income Americans.”Among those drawn to the app — recently renamed Providers, from Fresh EBT — is Kimberly Wilson, a single mother in Spindale, N.C., who has a 7-year-old son and cleans vacation rental homes. With her work interrupted by the pandemic, she turned to food stamps, which is also known as the Supplemental Nutrition Assistance Program, or SNAP.Kimberly Wilson, a single mother in Spindale, N.C., said the app’s most appealing feature is that it gives her the ability to check her food stamp balance.Mike Belleme for The New York TimesWhat Ms. Wilson said she likes most about the SNAP app is the ability to instantly check her balance, which she does almost daily. “It’s a comfort knowing I’m going to be able to feed my kid,” she said.The app also explains the timing and amounts of her payments better than the state, she said, and it steered her to a broadband subsidy that saved $50 a month.But the app’s rewards transcend the particulars, Ms. Wilson said: It leaves her feeling respected.“It makes you feel like it’s normal to need help,” she said, which is especially welcome because she has relatives who post memes depicting people on SNAP as lazy and overfed. “It’s like somebody behind the screen is looking out for us. You feel like they care.”Andrea Young, a Providers user in Charlotte, N.C., goes as far as to say the app “makes us feel like we’re Americans, too.”Propel offers an account that can also receive paychecks and other government benefits with the same balance-checking features, in recognition that most low-income households have multiple sources of income and need stable banking.PropelWith 42 million Americans receiving SNAP, many conservatives dispute the notion that aid is elusive. They see dependency as a greater concern than red tape and argue that administrative contact serves important goals, like deterring people who do not really need help or letting caseworkers encourage the jobless to find work.“The system should be striving to help individuals achieve self-sufficiency through employment” rather than maximize benefits, said Jason Turner, who runs the Secretaries Innovation Group, which advises conservative states on aid policy. “When you pile benefit on top of benefit, you make it harder to break free.”Poverty has long been linked to oppressive bureaucracy. “Little Dorrit,” the 1857 novel by Charles Dickens, lampoons the omnipotent “Department of Circumlocution,” whose stupefying procedures keep the heroine down. The 1975 documentary film “Welfare” offers a modern parallel with footage that one critic called “unbearable in its depictions of frustration and anger” among caseworkers and clients.Sometimes barriers to aid are created deliberately. When Florida’s unemployment system proved unresponsive at the start of the pandemic, Gov. Ron DeSantis told CBS Miami last year that his predecessor’s administration devised it to drive people away. “It was, ‘Let’s put as many kind of pointless roadblocks along the way, so people just say, oh, the hell with it, I’m not going to do that,’” he said. (Mr. DeSantis and his predecessor, Rick Scott, are both Republicans.)Other programs are hindered by inadequate staffing and technology simply because the poor people they serve lack political clout. Historically, administrative hurdles have been tools of racial discrimination. And federal oversight can instill caution because states risk greater penalties for aiding the ineligible than failing to help those who qualify.To show that Michigan’s application was overly complex, Civilla essentially turned to theater, walking officials through an exhibit with fake clients and piped-in office sounds meant to trace an application’s bureaucratic journey. Working with the state, the company created a new application with 80 percent fewer words; the firm is now working in Missouri.Michael Brennan, Civilla’s co-founder, emphasized that the Michigan work was bipartisan — it began under a Republican governor and continued under a Democrat — and saves time for the client and the state.“Change is possible,” he said.With its California portal, Code for America cut the time it took to apply for food stamps by three-quarters or more. The portal was optimized for mobile phones, which is how many poor people use the internet, and it offers chat functions in English, Spanish and Chinese. In counties with the technology, applications increased by 11 percent, while elsewhere the number fell slightly.During the pandemic, Code for America built portals to help poor households claim stimulus checks and the expanded child tax credit. The latter alone delivered nearly $400 million. David Newville, who oversaw the work, quoted a colleague to explain why web design matters: “Implementation is justice.”Mr. Chen, right, and Propel’s chief operating officer, Jeff Kaiser, at the company’s office in Brooklyn. Propel has landed investments from the venture capital firm Andreessen Horowitz and the sports stars Kevin Durant and Serena Williams.Karsten Moran for The New York TimesAs the son of struggling immigrants from China, Mr. Chen, the founder of Propel, understood hardship before he understood technology. “There wasn’t always enough to eat” in an otherwise happy Kansas City childhood, he said. (The family did not receive SNAP, though Mr. Chen does not know why.) He graduated from Stanford, worked at Facebook and left at 26 for a fellowship in New York, hoping to produce software for people in poverty.Mr. Chen founded Propel in 2014 with $11,000 from a Kickstarter campaign, pitched about 60 investors without success and went two years without a salary. After planning to work on SNAP applications, he shifted to focus on people who were already enrolled and developed the balance display.The existing technology did allow people to check their balances, but it did not work well on mobile phones, and a phone line required a 16-digit number. While studying how poor people shop, Mr. Chen saw them buy cheap items — often a banana — to check the balance on their receipts. It struck him as “disrespectful,” one more hassle that they did not need.In tech terms, a balance display was no special feat, but reaching SNAP recipients was. Mr. Chen said the app’s users checked it on average 17 times a month. Ms. Young, 54, said she checked it more frequently than that.“I check it all day, every day,” she said. “It makes me reassured, knowing that I’m going to have food.” Ms. Young, who gets by on a disability payment of about $800 a month after injuring her back, said she had run out of funds at the register; discarding items while others watched “makes you feel like you’re just pitiful.”Ms. Wilson said the app created a sense of belonging among people used to feeling stigmatized.Mike Belleme for The New York TimesMs. Wilson is so concerned about her balance that she keeps it in her head: It was $14.02 the other day.While the app does not let users talk to each other, she said it still created a sense of belonging among those who felt stigmatized. “It just made me see there were a whole group of people out there in the same circumstance,” she said.The app also tells people how much they have spent and where they spent it; offers recipes and budgeting tools; and provides news about other benefits. It generates revenue by selling ads, often to grocers offering discounts or employers offering jobs; Mr. Chen said the goal was to align the company’s financial interests with those of its users.In early 2016, the app had a few thousand users. A year later, it had about 200,000. Propel landed investments from Andreessen Horowitz, a top venture capital firm, and the sports stars Kevin Durant and Serena Williams. Forbes estimated that the company was worth $100 million, a sum that Mr. Chen called “not far off.”Partnering with a charity, Give Directly, during the pandemic, Propel distributed $180 million to randomly selected app users, offering them $1,000 each. It also moved into advocacy, adding a feature that lets users ask their members of Congress to extend the temporary child tax credit expansion. The app now offers an account that can receive paychecks and other government benefits, prompted in part by the difficulties that the poorest households experienced in collecting stimulus checks, because they often lack stable bank accounts.However they make ends meet, Mr. Chen said, poor people should know where they stand without having to buy a banana.“We pay hundreds of billions of dollars to fund these programs,” he said. “Why not make them work well?” More

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    QR Codes Are Here to Stay. So Is the Tracking They Allow.

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    Fueled by a desire for touchless transactions, QR codes popped up everywhere in the pandemic. Businesses don’t want to give them up.SAN FRANCISCO — When people enter Teeth, a bar in San Francisco’s Mission neighborhood, the bouncer gives them options. They can order food and drinks at the bar, he says, or they can order via a QR code.Each table at Teeth has a card emblazoned 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 input their credit card information to pay, all without touching a paper menu or interacting with a server.A scene like this was a rarity 18 months ago, but not anymore. “In 13 years of bar ownership in San Francisco, I’ve never seen a sea change like this that brought the majority of customers into a new behavior so quickly,” said Ben Bleiman, Teeth’s owner.QR codes — essentially a kind of bar code that allows transactions to be touchless — have emerged as a permanent tech fixture from the coronavirus pandemic. Restaurants have adopted them en masse, retailers including CVS and Foot Locker have added them to checkout registers, and marketers have splashed them all over retail packaging, direct mail, billboards and TV advertisements.But the spread of the codes has also let businesses integrate more tools for tracking, targeting and analytics, raising red flags for privacy experts. That’s because QR codes can store digital information such as when, where and how often a scan occurs. They can also open an app or a website that then tracks people’s personal information or requires them to input it.As a result, QR codes have allowed some restaurants to build a database of their customers’ order histories and contact information. At retail chains, people may soon be confronted by personalized offers and incentives marketed within QR code payment systems.“People don’t understand that when you use a QR code, it inserts the entire apparatus of online tracking between you and your meal,” said Jay Stanley, a senior policy analyst at the American Civil Liberties Union. “Suddenly your offline activity of sitting down for a meal has become part of the online advertising empire.”“I’ve never seen a sea change like this that brought the majority of customers into a new behavior so quickly,” Ben Bleiman, Teeth’s owner, said of QR codes.Ulysses Ortega for The New York TimesQR codes may be new to many American shoppers, but they have been popular internationally for years. Invented in 1994 to streamline car manufacturing at a Japanese company, QR codes became widely used in China in recent years after being integrated into the AliPay and WeChat Pay digital payment apps.In the United States, the technology was hampered by clumsy marketing, a lack of consumer understanding and the hassle of needing a special 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, Mr. Stratten said. In 2017, he said, Apple made it possible for the cameras in iPhones to recognize QR codes, spreading the technology more widely. Then came the “pandemic, and it’s amazing what a pandemic can make us do,” he said.Half of all full-service restaurant operators in the United States have added QR code menus since the start of the pandemic, according to the National Restaurant Association. In May 2020, PayPal introduced QR code payments and has since added them at CVS, Nike, Foot Locker and around one million small businesses. Square, another digital payments firm, rolled out a QR code ordering system for restaurants and retailers in September.Businesses don’t want to give up the benefits that QR codes have brought to their bottom line, said Sharat Potharaju, the chief executive of the digital marketing company MobStac. Deals and special offers can be bundled with QR code systems and are easy to get in front of people when they look at their phones, he said. Businesses also can gather data on consumer spending patterns through QR codes..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-1rh1sk1{margin:0 auto;overflow:hidden;}.css-1rh1sk1 strong{font-weight:700;}.css-1rh1sk1 em{font-style:italic;}.css-1rh1sk1 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#ccd9e3;text-decoration-color:#ccd9e3;}.css-1rh1sk1 a:visited{color:#333;-webkit-text-decoration-color:#ccc;text-decoration-color:#ccc;}.css-1rh1sk1 a:hover{-webkit-text-decoration:none;text-decoration:none;}“With traditional media, like a billboard or TV, you can estimate how many people may have seen it, but you don’t know how people actually interacted with it,” said Sarah Cucchiara, a senior vice president at BrandMuscle, a marketing firm that introduced a QR code menu product last year. “With QR codes, we can get reporting on those scans.”Tom Sharon, right, and Jamie Sunderland, founders of Cheqout. Mr. Sharon said restaurants that used QR code menus could save 30 percent to 50 percent on labor costs.Ulysses Ortega for The New York TimesCheqout and Mr. Yum, two start-ups that sell technology for creating QR code menus at restaurants, also said the codes had brought advantages to businesses.Restaurants that use QR code menus can save 30 percent to 50 percent on labor costs by reducing or eliminating the need for servers to take orders and collect payments, said Tom Sharon, a co-founder of Cheqout.Digital menus also make it easier to persuade people to spend more with offers to add fries or substitute more expensive spirits in a cocktail, with photographs of menu items to make them more appealing, said Kim Teo, a Mr. Yum co-founder. Orders placed through the QR code menu also let Mr. Yum inform restaurants what items are selling, so they can add a menu section with the most popular items or highlight dishes they want to sell.These increased digital abilities are what worry privacy experts. Mr. Yum, for instance, uses cookies in the digital menu to track a customer’s purchase history and gives restaurants access to that information, tied to the customer’s phone number and credit cards. It is piloting software in Australia so restaurants can offer people a “recommended to you” section based on their previous orders, Ms. Teo said.QR codes “are an important first step toward making your experience in physical space outside of your home feel just like being tracked by Google on your screen,” said Lucy Bernholz, the director of Stanford University’s Digital Civil Society Lab.Ms. Teo said that each restaurant’s customer data was available only to that establishment and that Mr. Yum did not use the information to reach out to customers. It also does not sell the data to any third-party brokers, she said.Cheqout collects only customers’ names, phone numbers and protected payment information, which it does not sell to third parties, Mr. Sharon said.At Teeth, customers can order food and drinks at the counter or via QR code menus. Ulysses Ortega for The New York TimesOn a recent blustery evening at Teeth, customers shared mixed reviews of the QR code ordering system from Cheqout, which the bar had installed in August. Some said it was convenient, but added that they would prefer a traditional menu at a fine dining establishment.“If you’re on a date and you’re whipping your phone out, it’s a distraction,” Daniela Sernich, 29, said.Jonathan Brooner-Contreras, 26, said that QR code ordering was convenient but that he feared the technology would put him out of his job as a bartender at a different bar in the neighborhood.“It’s like if a factory replaced all of its workers with robots,” he said. “People depend on those 40 hours.”Regardless of customers’ feelings, Mr. Bleiman said Cheqout’s data showed that about half of Teeth’s orders — and as much as 65 percent during televised sports games — were coming through the QR code system.“They may not like it,” he said in a text message. “But they’re doing it!” More