A local furniture chain in Massachusetts has just begun advertising what seems like a too good to be true offer: “buy at least $500 in furniture and get back $500 in free groceries… get one [$100] giftcard a month for five months.”
Here is the TV commercial they are running.
The fine print in the commercial is virtually unreadable, but says that the offer does not apply to previous purchases, is subject to terms and conditions, and to see the store for more details. Based on what is said in that commercial, however, one would think this was a very straightforward offer. Not.
*MOUSE PRINT: What the commercial doesn’t tell you is that in addition to the $500 in furniture, you must also purchase at least $1000 in groceries in order to receive the five $100 giftcards. In fact, you must purchase at least $200 of groceries each month at the same store for five consecutive months, and send in proof of purchase on no more than two receipts monthly. (This means that most grocery purchases under $100 won’t qualify toward the total.) If you shop somewhere else, or miss a month, the rest of your giftcards are cancelled. [See offer details.]
When the store was asked how come the commercial left out the key fact that an additional $1000 purchase of groceries was also necessary, the response was that the ad said to see the store for details.
The offer sends up all kinds of red flags because of the financial impossibility of every customer being given $500 having only spent $500. For argument sake, let’s say a customer buys a lounge chair for $500, which cost the store $250. The store had to pay MPell Solutions (the fulfillment house for the grocery incentive) some amount of money for each $500 certificate, right? Given that the gross profit on the chair is only $250, how much of that is the store going to pay for an incentive? Let’s say they did spend 40% of their gross profit — $100 — for each grocery certificate. How in the world can MPell turn that $100 into $500 to return to customers over a five or six month period? (Only Bernard Madoff can do that.) Clearly, the math does not seem to work. Even if some customers fail to follow through, the worry is that some diligent customers may not get what they were promised. That’s what happened in a similar gasoline promotion recently.
The gas promotion, previously reported in Mouse Print*, promised customers who spent $1000 on electronics that they could get back $500 in gas giftcards. As it turned out, that meant that customers had to mail in receipts totaling $100 a month for 20 months, in order to receive a $25 monthly gas card. That electronics chain is now out of business, participants in the promotion are now complaining about slow fulfillment or non-fulfillment of the offer, and the Florida Attorney General is investigating.
Always boggles the mind when a company that tries to push itself off like a good “corporate citizen” and your friendly hometown store stoops to such lowlife trashy gimmicks. Especially one that is so obnoxious with it’s too oft repeated annoying ads.
Ha, that is classic. “Quality, Comfort, and Misleading Promotions! That’s Nice!” =)
Neat to see the update on that gas promotion you talked about earlier, too funny (too me I guess) to see that they are out of business.
I wonder if you are allowed to use the $100 gift cards towards your $200 monthly purchases. Spending $200 a month for a family isn’t too hard. However, if you aren’t allowed to use the gift cards in that purchase then that would be a sour deal. $300 a month on groceries is pretty hard to do unless you have 5 people in that household.
I also wonder if the cards must be used within 30 days of being mailed to you or if they can be saved up and used after you get all 5. It certainly sucks that you have to see the store for details. I don’t live anywhere near there, so I will never know. Although I do live about 30 minutes from MPell. Maybe they can share details with me.
I can see myself spending $300 a month in groceries before spending $125 a month in gas.
Furniture is massive profit center, 2.0 markups are minimum, bed themselves usually run a 4.0 markup (thats cost times 4).
But the basics of economics here will blow this “deal” out of the water every time.
In these economic times the companys that survive are the ones that earn customer respect. Doing stuff like this when all we see on TV are thieves and liars is not going to help this place at all. Personally I will only do business with companys that are up front and honest about what they are selling me and will back up their product as well.
The commercials are a true assault on my senses. Barry and Elliot at least had a little creativity even though they stole many of the ad ideas from others, but Bernie and Phyllis Rubin and their sons doing the commercials are just awful. Between Bernie and Phil and Bob’s my mind has tuned out a long time ago to any of their offers. I am always amazed as to the warehouses full of horribly- made goods. I went to Westborough to Bernie and Phils and could not believe such badly made and very weird styles that populate their stores. The styles are monstrous. The same with Bob’s. Bob’s opened in Dedham and if you turn over their $300 ottoman you see that the legs are plastic like from a rubbermaid container, but at least you get free ice cream while they sell you inferior quality furniture. Barry and Elliot used their Imax and other promotions to get people into the store. Bernie and Phil
are using fraudulant gift offers and Bob’s is using bundling techniques. When a company has good quality at fair prices it doesn’t need a gimmick. Beautiful furniture is the draw.
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This reminds me of a phone solicitation we’ve received a couple years ago trying to get us to visit a facility so they could sell us a timeshare. One thing I can remember is they offered $40 in gas coupons, so you think you can afford to make this trip with $40 towards the gas. Wrong! It doesn’t work that way, which you don’t find out until you get there, and the requirements were similar to this furniture promotion. I’m sure many people were not able to keep track of it all and never received their $40. I’m starting to notice this with rebates, too, like very short time periods to get them sent in.
The Small Print will always get ya!!!!!!!!
I got screwed over too. I was very cautious because it looked tricky. My fatal word was This mistake mistak was T reciept(s)must be for the purchase or groceries within 30 days FOLLOWIG thethe date issued on this certificate. My dates were within 30 days only they were prior to the date on the certificate . Shame on me I got Raped out of $500. 00 dollars. I hope that you don’t. Unfotunatly it was leagle. I will never do buisness with Bernie and phills again! Shee!! Don’t tell Bernie
I am another customer who didn’t get what they were promised.
Let me explain a couple of things about the economics of how I think this entire system is supposed to work first: Yes, the retail store is buying
the certificates for pennies on the dollar of their face value. But it’s not like they are paying $100 for a $500 certificate. They are probably
paying only something like $10. So it’s easy to see how profitable it is for the retailer. But how is this profitable for the promotions company?
Well, generally, it isn’t, which is why we hear about all these companies going out of business amid lots of complaints, and then they resurface
under new names and defraud new people all over again. They rely on the concept of “breakage”, where they figure that most people won’t take the
time to collect receipts and send them in every month. I am sure they have statistical studies that show what % of the face value of the certificate
they will likely have to pay out. But if they end up having to pay out more than they expect, then they are obviously in trouble. But there are
other ways for the promotions companies to make money: they can sell advertising to be included in the mailing with the voucher (if they ever send
out a voucher to begin with) since there’s a 100% likelihood of the envelope being opened, unlike the other junk mail envelopes we normally get and
toss in the trash unopened. They can also sell the receipts to marketing companies to learn about buying habits (much more useful for grocery
receipts than for gas receipts). So, taking all this into consideration, the business model potentially seems feasible, but I still went into this
thing with a high degree of skepticism, and it looks like I was proven right. When I mentioned “breakage” earlier, another way to acheive that is
to create your own breakage by simply not honoring legitimate claims in various ways (ignoring them altogether, claiming they were claimed
incorrectly, claiming the vouchers were sent but bounced in the mail, etc.)
I have been in the “Claim Your Gas” and “Claim Your Groceries” programs for 6 months now and haven’t received a single voucher. The parent company of
these used to be called BBZ Resource Management, but now they go by Incentive International (just a corporate shell game to constantly change the
names of their companies and their programs to stay one step ahead of angry consumers and the law). I was lucky to find a customer service number
and speak to a human being once, and was told my claim would be expedited in 7-10 business days, but that deadline has since passed and I still
haven’t received anything, and that phone number I called is now just an outgoing message stating that they handle all customer service with an
online form (easier to ignore customer complaints that way). From surfing the net, I found this company has an F rating with the BBB and there are
several articles about this company that sound like it is about to go under, plus they are being investigated by several states’ Attorneys General,
etc. So in this case, it’s more than just an asterisk with additional terms and conditions that weren’t advertised. It’s downright fraud and
not ever getting what you were promised, even if you follow the instructions to the letter!
Don’t trust Mpell with anything. They tend to find loop holes to avoid fulfilling promotion requests, and the company doesn’t listen to pleas for quality customer servioe. I recently filed a BBB report, a report with the company that hired them, and Mpell. And, I only receive input input from the company that hired them. Guess they didn’t want to lose lots of furniture business each year! Mpell has poor business ethics that can cause their customers to lose clients. Don’t hire them!