No word is more powerful (or misused) in marketing than “free.” So when NutriSystem advertised its new advanced diet program with three weeks of free food, our trusty mouse had to check it out.

What is better than free? “Absolutely free.” But the dagger leads to some fine print.

*MOUSE PRINT:

“…for this offer you must stay on Auto-Delivery for at least three consecutive 28-day program deliveries… One additional free week of food will be included with your first, second, and third deliveries.”

In other words, you have to buy three months of NutriSystem food in order to receive three additional weeks of “free” food. How much money are you going to have to lay out to get the “absolutely free” food?

*MOUSE PRINT: According to their website, 28-days of food on the auto-delivery plan costs $319.95 for men. Multiply that by three for the required monthly shipments, and the total cost is $959.85.

So, in order to receive three weeks of food “absolutely free”, you have to spend nearly $1000. I am losing my appetite already.

For years, airlines, car rental agencies, and cell carriers have advertised eye-catching but incomplete prices. In a very calculated way, they leave out of the big print price certain fees, taxes, and other charges to make the advertised price seem lower than the price the consumer will actually pay.

This practice has now made its way into the publishing industry for some magazine subscriptions.

Here is a subscription card for ShopSmart;) magazine:

Nowhere is the total price disclosed. Rather, you are made to do the math yourself — 6 issues times $3 an issue is $18. Right?

*MOUSE PRINT:

*PLUS $4.95 S/H

Shipping and handling is extra? For a magazine subscription?

Worse, what kind of sleazy publisher would pull this kind of stunt? The last one you would ever expect — Consumers Union — the publisher of Consumer Reports. Ironically, they are known for pointing out lapses like this on their Selling It page each month.

When questioned why the total price was not stated, and why they resorted to using a fine print disclosure to indicate that the advertised price was not the actual price customers would pay, a spokesperson emailed:

“Unlike many other publications, ShopSmart takes no ads and we need to depend upon revenue from newsstand sales and subscribers for this publication. Part of the reason that Consumers Union charges shipping and handling for ShopSmart is that it is a newer title with a relatively small circulation; it’s not afforded the economies of scale that benefit larger publications.

Our marketing team believes that the S+H notices listed elsewhere on the advertisement were both reasonable and appropriate.

As you know, we are a mission-driven, non-profit organization. Revenue from this product helps support our ongoing product testing and research.

Our hope is that potential subscribers will see the value of ShopSmart and that we will be able to reach, and inform, a new audience of savvy shoppers.”

Wow… sounds like the type of denial that an ordinary publisher might sling. Please don’t get me wrong. Consumers Union is a fine organization that has earned the public’s respect for decades for the invaluable services they provide. And ShopSmart;) is actually quite a good magazine with features of great value to many, particularly those interested in consumerism. What I do object to is this type of advertising tactic. They are the last organization in the world I would ever expect to engage in such a ploy.

Last week, Neal E. Boyd won the top prize on NBC’s America’s Got Talent program.  In addition to headlining one show at a Las Vegas hotel, he also won a much ballyhooed $1,000,000, or so it seemed.

Throughout the season, host Jerry Springer reminded contestants of the big prize and the chance to become America’s most talented winner.

Let’s hope that Mr. Boyd wiped the stars out of his eyes long enough to read his contract with the program, and the fine print that rolled by during the credits at the end of the show.

*MOUSE PRINT:

Translation:  Like the lottery, the big prize is doled out in small increments over decades.  In this case, the winner would wind up getting less than $500 a week for 40 years.  That’s a mere $25,000 a year.  Hardly an amount that would change one’s life.  The alternative lump sum amount is not stated, but after taxes, it is likely to be in the $300,000 range. 

The million dollar prize certainly was an attention getter for the thousands that tried out for the show, and to create excitement amongst viewers.  The winner got his shot at fame, which he might say was priceless, and worth more than the somewhat illusory million dollar cash prize.

It appears that other reality shows have also touted big top prizes that were never quite what they appeared, and sometimes, they were not even awarded.  (See end of this story.)

Consumers love “free after rebate” offers even with all the hoops you often have to jump through. Now, some companies like Symantec are adding a new wrinkle — the cash back rebate is not by check sometimes, but rather via a prepaid debit card.

Buy.com recently advertised Norton Save & Restore 2.0 (a great backup recovery product, incidentally) free after two rebates. The larger of the two rebates was for $26: 

When you click to see the form, you may be surprised to learn the rebate is in the form of a Visa prepaid card:

*MOUSE PRINT:

The rest of the rebate form [pdf] has an even nastier surprise:

*MOUSE PRINT:

The Visa Prepaid Card is not redeemable for cash and may not be used for cash withdrawal at any cash dispensing locations. Each time you use the card the amount of the transaction will be deducted from the amount of your available balance. Terms and Conditions apply to the card and are available for review at www.SymantecRebates.com. Subject to applicable law, a monthly maintenance fee of $3 (USD) applies, but is waived for the first six months after the card is issued.

Consumers are notoriously bad about using up their giftcards. This fact certainly hasn’t escaped rebate providers. So the $3 monthly maintenance fee is just one more way that manufacturers seek to hold onto more of the dollars they would otherwise have to provide customers via rebates.

From the folks who bring you FreeCreditReport.com, now there is Green Umbrella. It is an extended warranty plan for many household goods, and is sold by the month. Rather than buy a separate policy for each item, their plan is blanket coverage for multiple items in your house.

The company claims that “one plan can cover all your* Home Appliances, Personal Computers, and Electronics.”

Unless you just landed on planet earth (and didn’t bring anything with you from Mars), by its very terms, the plan cannot cover ALL items because:

*MOUSE PRINT:

“Covered Item means Electronics, Appliances, and Computers that meet the following requirements:

— Are purchased during the Coverage Period or within sixty (60) days prior to the Effective Date listed on the Cover Page of the Agreement; “

So, only items purchased no more than two months old are covered, as well as newly purchased items. The plan will not otherwise cover your existing computers, electronics, or appliances.  [Note: Green Umbrella is running a promotion for September only whereby all qualifying items purchased during 2008 will be covered.]

How long does coverage last? As long as you pay the monthly fee, but you could fall into a trap. The coverage for any particular item is limited:

*MOUSE PRINT:

“Coverage begins on the date You purchase the Covered Item and terminates thirty-six (36) months from the purchase date”

You could easily be lulled into believing that your continued payments continue to cover everything purchased since the plan went into effect.

The service agreement is over 5500 words, and there are many catches and requirements, including having to register new purchases within 30 days; already purchased items must have come with at least a 12 month manufacturer’s warranty; if your DLP or LCD HDTV lamp burns out, they will only give you the bulb for you to replace on your own; you can only make two claims per year; and much more.

If you purchased the covered item with a credit card that provides extended warranty coverage, for say the second year, your coverage under this plan may be limited:

*MOUSE PRINT:

“Coverage is secondary to any other applicable warranty, insurance, indemnity, or extended warranty available to You. Coverage is limited to only those amounts not covered by any Other Coverage.”

So, if you have a manufacturer’s warranty for say a year, you must make a claim through it, and not this plan. The credit card warranty will kick in if you have a problem in the second year of ownership. And therefore only in year three will this plan provide any benefits. So you really have to do the math and recognize that your payments for the first two years of coverage cover nothing. In total, you will pay roughly $360 to get coverage in your products’ third year of life.

One last insult:

*MOUSE PRINT:

“The Coverage Period must continue without any lapse in payment (i.e. the Monthly Agreement Charge for this Agreement is not paid when due). If there is a lapse in payment a new Agreement will be issued upon receipt of the payment for the Monthly Agreement Charge. Only Electronics, Appliances, and Computers that qualify as Covered Items under the terms of the new Agreement will be covered.”

Translation: If your monthly payment arrives late, your old plan is cancelled and a new policy is issued. Therefore, all previously covered items will no longer be covered unless they were purchased in the prior two months.