This is how Facebook learns what you buy at physical stores in order to show you relevant ads - and how to opt out

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The process begins when you buy something, either online or in a store. The retailer may retain information about you from the purchase.

The process begins when you buy something, either online or in a store. The retailer may retain information about you from the purchase.
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If that retailer has an ad partnership with Facebook, it sends Facebook your email, phone, name, zip, city, state, country, date of birth, gender, and age, or fragments of that information, according to a Facebook spokesperson.

If that retailer has an ad partnership with Facebook, it sends Facebook your email, phone, name, zip, city, state, country, date of birth, gender, and age, or fragments of that information, according to a Facebook spokesperson.
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Facebook only needs a few data points from retailers in order to create a "custom audience," or a group of users it determines have shopped at that retailer.

Facebook only needs a few data points from retailers in order to create a "custom audience," or a group of users it determines have shopped at that retailer.

According to a study published earlier this year, algorithms are capable of confidently identifying people based on just a few anonymized data points — and few companies have as much user data as Facebook.

That data is hashed before it's uploaded to Facebook and is removed after users are matched to retailers, according to a Facebook spokesperson.

That data is hashed before it's uploaded to Facebook and is removed after users are matched to retailers, according to a Facebook spokesperson.

Hashing is a common data-privacy practice that converts plain-text data to code that can only be read by an algorithm, and can only be decoded with a specific key.

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After the hashed data is deleted, what remains is the match — that is, Facebook has used the information from retailers to match specific user profiles to that business.

After the hashed data is deleted, what remains is the match — that is, Facebook has used the information from retailers to match specific user profiles to that business.

From there, the retailers can buy ads on Facebook that will be shown directly to the "custom audience" of users matched to them.

From there, the retailers can buy ads on Facebook that will be shown directly to the "custom audience" of users matched to them.
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Several retailers are already using the "off-Facebook activity" functions for buying ads on Facebook, including Macy's and Dick's Sporting Goods.

Several retailers are already using the "off-Facebook activity" functions for buying ads on Facebook, including Macy's and Dick's Sporting Goods.

"With store visits custom audiences, we re-engaged customers who had visited one of our stores with a targeted Facebook ad," a Dick's Sporting Goods spokesperson said in a statement. "And, using lookalike audiences, created from people similar to those who visited our store, opened up a broader audience of new customers for us to reach, driving incremental foot traffic and sales."

A Macy's spokesperson said the retailer has used Facebook's tool to drive more in-store sales.

"We are encouraged by the positive results we saw in-store and are excited to continue testing Facebook's offline suite to fuel our growth," the spokesperson said.

Users can opt-out of off-Facebook activity tracking by going to their Facebook settings, selecting "Ads," and disallowing "ads based on data from partners."

Users can opt-out of off-Facebook activity tracking by going to their Facebook settings, selecting "Ads," and disallowing "ads based on data from partners."

The "ads" section of Facebook's user settings can be found here.

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Facebook also offers a tool to let people check whether an ad is specifically targeting them. To use the tool, select "Why am I seeing this ad?" from the dropdown menu on the top right of the ad.

Facebook also offers a tool to let people check whether an ad is specifically targeting them. To use the tool, select "Why am I seeing this ad?" from the dropdown menu on the top right of the ad.