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.
