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April 26, 2015

Despite Crushing Publicity, TurboTax Sales Surge

Filed under: Finance,Internet,Retail — Edgar (aka MrConsumer) @ 8:56 am

  In January, we were the first to call national attention to TurboTax’s nasty and inconspicuous ploy of stripping its flagship desktop income tax preparation software of key tax forms, thus forcing long-time users to upgrade to significantly more expensive versions. (See series of Mouse Print* stories.) Customers were livid and nearly 3000 of them posted one-star reviews on Amazon.

Major media picked up on the story, and after three weeks of a public pummeling, Intuit, the maker of TurboTax, finally relented (after some half-hearted attempts to satisfy customers) and offered free upgrades to everyone.

Then came the revelation that crooks were claiming income tax refunds via TurboTax’s online software before their rightful owners could. Some states temporarily stopped accepting TurboTax returns. The FBI, Congress, and the FTC all launched investigations. And Intuit finally strengthened verification of identities on its website. This dual onslaught of negative press spanned most of January and February.

TurboTax headlines

One would think with the crushing and sustained negative publicity the company received over this period in the height of tax season that their sales would surely plummet. After all, consumers were mad as hell about the costly upgrades being forced on them, and worried as hell that TurboTax online was facilitating theft of their tax refunds.

According to Streetinsider.com, however, TurboTax desktop sales dropped only 6% or about 300,000 units, but online sales surged by two and a half million additional tax returns.

MOUSE PRINT*:

Unit Sales of 2015 TurboTax
TurboTax Sales

It is unfathomable to MrConsumer that millions felt more comfortable with TurboTax online this year than last, and that only relatively few abandoned the company’s desktop product. Wasn’t anyone paying attention except the two people who sued Intuit last week? Are all the alternatives just not up to the task? Or were those extra 2.5 million returns all filed by crooks?

• • •

April 20, 2015

Sears Gives Payment Choice for Refrigerator: $1299 or $2099

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:16 am

  MrConsumer was helping a friend buy a particular refrigerator recently at Sears:

Sears

One weekend last year, Sears was selling it for $1299, marked down from (a supposed) $2099. Scrolling down the page, there was this “payment options” section:

sears

Huh? Which would I prefer to pay — the sale price of $1299 or the regular price of $2099?

*MOUSE PRINT:

Clicking the “see details” link didn’t really add any details beyond those stated.

The offer apparently, in a roundabout way, is trying to sell you a gift card along with the refrigerator, with the value of the gift card being the difference between the regular price and the sale price the refrigerator (in this case $800) plus a 10% bonus. In other words, for $2099, you will get an $880 Sears gift card plus a $1299 refrigerator.

For a lousy $80 extra, why would anyone buy an $800 gift card, unless they had an immediate use for it? We welcome your thoughts about this promotion in the comments section below.

• • •

April 6, 2015

Where’s the Big Savings?

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:57 am

  We are all conditioned to look for sale signs and marketers know that. That’s why everything always seems to be on sale.

But sometimes, the savings offered are a joke. Here is our slightly-belated April Fools list of real sales with bogus savings.

*MOUSE PRINT:

home for sale
Wow… what a price reduction!


Sears big deal
Big sale at Sears… don’t miss it!


penny saved
Save a whole penny on clearance! [Thanks, K.T.]


4 for $10
Buy more, save zero! [Thanks, B.D.]

• • •

March 30, 2015

Hertz Hides the Lowest Priced Cars

Filed under: Autos,Internet,Travel — Edgar (aka MrConsumer) @ 6:26 am

  It is not easy to find the lowest price on a rental car because companies don’t automatically incorporate discount codes into their displayed rates, so you have to keep trying different codes and different companies’ websites. And even when you think you have found the lowest price, some rental companies have some tricks up their sleeve to bamboozle you.

Case in point: A friend is coming to Boston this week to visit, and MrConsumer agreed to help him find the “best” car rental rate. After using a number of travel sites that compare the prices of various companies, it became pretty clear that Hertz was offering the lowest prices depending on which coupon code promotions you entered into their website.

Here is the top portion of the results search on Hertz’s webpage:

Hertz top 4

It seems pretty clear that the best price turned up by this search is $162 ($170.73 including taxes and fees). It even says at the top “The rates listed represent the best available rates based on the information provided.” So a booking was made for this $170 car based on MrConsumer’s recommendation.

After a little more poking around, MrConsumer learned that this $170 rate was not in fact the cheapest rate that Hertz was offering.

Here is the (almost) full list of cars and prices on Hertz’ website at the time the above four prices were extracted:

*MOUSE PRINT:

Hertz

Scroll down the list.

The nearly complete list appears just as it does above with the $162/$170 rate apparently the least expensive option. But if you scroll down to the bottom of the list, to the 10th car listed, a $153 rate appears! What, where did that come from?

It appears that Hertz deliberately creates the impression that the lowest rate appears first at the top of the list, but in fact tucks the best rate farther down the list. (Testing other rental dates and locations, the lowest price was not always on the bottom, but it was never the first, second, or third listing which appear in increasing cost order.)

Mouse Print* wrote to the PR folks at Hertz asking why they did this, whether they recognized the deceptive nature of this ploy, and if they were going to fix it.

The company did not respond.

Just imagine if Hertz can grab an extra $7 or $10 on each car rental by upselling customers one car class above the cheapest car… times how many million rentals a year…

• • •

March 16, 2015

FTC Sues DirecTV Over Misleading Ads

Filed under: Electronics,Internet,Retail — Edgar (aka MrConsumer) @ 6:44 am

 Last week, the FTC sued DirecTV for deceptive advertising practices for their digital satellite television services.

In particular, the FTC said that their advertising didn’t make clear a number of key facts:

1. That the low advertised rate, such as $19.99, only applied to the first year of service, and that rates in the second year were typically $25 to $45 higher per month.;

2. That the consumer had to agree to a two year contract, and if they cancelled, they would be charged a $20 cancellation fee for each month remaining on the contract;

3. That the consumer’s silence after three free months of premium TV channels such as HBO or Showtime would be construed as their acceptance of continuing to receive those channels at an average of $48 extra per month — in essence, a negative option plan.

Here is a sample ad from their website as of the day after the lawsuit was filed:

DirecTV adClick ad to see actual size

Even at full size, you might not be able to read the fine print.

*MOUSE PRINT:

Near the $19.99 price: with 24-mo agreement Select package plus add’l fees.

Under “view all packages”: All DirecTV offers require 24-month agreement. Requires enrollment in auto bill pay. Select package or above. Additional equipment required & advanced receiver fees apply. Minimum 2-room set up required for free Genie upgrade offer. Select through ultimate packages.

The offer details link discloses that up to a $480 early termination fee applies.

As we have explained many times, it is not enough for advertisers to disclose key facts somehow, somewhere. It has to be “clear and conspicuous” disclosure. In the words of the FTC complaint, the agency contends that “disclosures are inadequate in terms of their content, presentation, proximity, prominence or placement such that consumers are unlikely to see or understand such disclosures.”

The FTC’s lawsuit did not emphasize a key point that consumers complain about online — the total cost of the service. Even in the first year of the contract, it is nowhere near $19.99 a month because of a multitude of added required fees and charges not clearly specified in their ads.

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