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July 29, 2019

Cash Back Credit Card Correction;

Group Asks FTC to Investigate Prime Day Promotions

Filed under: Finance,Internet,Retail — Edgar (aka MrConsumer) @ 5:05 am

CORRECTION AND UPDATE:

Before our main story, I wanted to advise readers that the PayPal 2% Cashback credit card mentioned here two weeks ago as a good substitute for the Citi Double Cash card which is dropping almost all benefits soon does NOT have the benefits referred to on its website nor as confirmed by its customer service agents with whom I double-checked. That card only has one benefit – ID theft protection — but not extended warranty, price protection, return protection, CDW coverage, lost luggage coverage, etc. contrary to the link from the benefits section of its website states. I apologize to anyone who applied for this card as a result of the recommendation. I will be cutting up my card shortly. Synchrony Bank, the card’s issuer, just provided us with a response that basically says they are going to correct their link:

…we are taking some action to help further clarify the specific benefits of the PayPal Cashback Mastercard when a consumer is looking on the web. Already consumers can see the two key benefits including ID Theft Protection and Microchip technology. Additionally, we plan to post a specific version of the guide to benefits that you can find here.


Last week, Public Citizen, a Washington-based public interest consumer advocacy organization, sent a letter to the FTC asking them to crack down on websites that promote the sale of products from Amazon.com without clearly disclosing when they have a financial incentive to tout those items.

The group pointed out dozens of instances of stories published two weeks ago on popular websites and through social media that spotlighted certain items as great deals during Amazon’s big Prime Day sale. In most cases, the affiliate relationship the publisher had with Amazon was either not disclosed at all or poorly disclosed. (We documented this very issue last December in this story.)

In an affiliate relationship, a publisher or even a person with just a social media presence can earn a small commission on the sale of products if a reader clicks a link from the website or post and actually purchases the item. Under the Federal Trade Commission’s testimonial and endorsement guidelines if there is a financial connection between an endorser and the product being touted, that fact must be clearly disclosed. Similarly under the FTC’s native advertising guidelines when advertising masquerades as editorial content, clear disclosure of a sponsorship relationship must be made.

As one example of what is going on, Public Citizen cited this story from the Today Show website:

Today Show promotion

The story recommended a couple of dozen items as “the best Prime Day deals.” What the reader didn’t know was that NBC had a financial interest in the sale of those items.

*MOUSE PRINT:

Only if the reader clicked the “read more” link (and they would have no particular reason to do so based on the content that was already showing), would they learn NBC’s little secret).

NBC Today Show disclosure

The program makes a small commission if a reader buys any of the items featured through the links provided.

The problem here was that NBC hid that fact instead of openly disclosing it. At least their specific choice of which items to highlight was an independent editorial decision based on merit. This is how Consumer World selects its Bargain of the Week (which very rarely contains an affiliate link).

Last year, we called out ABC and others for an even bigger problem — running entire “deal” segments on their morning shows, where the network was getting a cut of the sale of each item featured, and not clearly disclosing that fact at the beginning of the segment. See our story.




 

 

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May 27, 2019

Google Ran An Illegal Lottery — And We Got Them to Stop

Filed under: Internet,Sweepstakes — Edgar (aka MrConsumer) @ 5:53 am

Last Wednesday evening, Google sent out an email to Google Assistant customers announcing a sweepstakes to win a free Google Home Max speaker.

Google email

To get your chance to win, you had to either buy a 2-pack of Google Home Minis smart speakers yourself (or anything else from the Google store), or get a friend to buy two using a special link that would secure your entry. At the bottom of the offer was a terms and conditions link with the contest rules.

*MOUSE PRINT:

Despite the rules saying multiple times “no purchase necessary” to enter the sweepstakes, they provided no free means of entry. You or someone else had to make a purchase for a chance to win. And that makes this an illegal lottery, against federal law and the gambling laws of virtually every state. “Paying a price for the chance of a prize” is the classic definition of a lottery. To convert an illegal lottery into a legal sweepstakes, the promoter must always include a free means of entry.

But Google didn’t do that.

We wrote to their PR folks about 12 hours after their email was sent, contacting both Google and its parent company, Alphabet, pointing out the problem and asking how they were going to remedy it. By that evening Google sent out a new email to customers entitled “Update to Home Max Sweepstakes.”

Google Revised Email

Miraculously, all mentions of a purchase being necessary disappeared from the promotion. And the sweepstakes rules were changed to include an additional alternate means of free entry.

*MOUSE PRINT:

Google updated sweepstakes rules

Did Google or Alphabet reply to our email, or even send a note of appreciation for getting them out of potential legal hot water? Nope.




 

 

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April 22, 2019

Wayfair Called Out on Exaggerated Savings Claims

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:45 am

Wayfair, the large online seller of home goods, had its big “Way Day” sale on April 10th and 11th, promising the “lowest prices of the year” and “up to 80% off.” In the process of checking it out, we discovered often exaggerated savings claims and misleading price comparisons, and not just on Way Day.

Wayfair Way Day

 

Perusing those six categories, some of the discounts seemed too good to be true. For example:

Wayfair memory foam mattress on Way Day

Here they’re claiming this store brand memory foam mattress is on sale for $349.99, marked down from what looks like their $2,100 regular price. That’s 83-percent off, seemingly saving shoppers $1,750!

Many other items were advertised at 40 – 80% off, with some discounts so large as to raise questions about the legitimacy of the savings claimed. To check this out, Consumer World conducted a spot-check of a dozen deeply discounted items from the six categories featured above on April 10, 2019 – the first day of Wayfair’s Way Day 36-hour sale.

Here is the cart with those 12 items:

Wayfair Way Day cart

Scroll down the list.

You’ll see the amazing discounts above that Wayfair was offering.

But the question was, when the Way Day sale was over, would all these items revert to the higher price shown? Or, would you save almost as much if you delayed your purchase or missed the sale and returned later? To find out, we went back the day after the sale ended, April 12, to check the prices of the same dozen items.

Wayfair day after cart

Scroll down the list.

One item we checked was that memory foam mattress pictured at the top of this story. It was on sale during Way Day for $349.99 and was still on sale right afterwards and only slightly higher — $376.99. So customers who purchased that item on Way Day when it was said to be 83% off, really only saved a mere $27.

Wayfair mattress after Way Day

 

All the items went up in price right after Way Day, some by only a little and some by much more. This certainly suggests that the company did lower its everyday prices for the sale and it was a good day to shop there.

But none of the items in our spot-check reverted to the stated crossed out price (the “strike-through price” like the $2,100 reference price for the mattress). In fact, while Wayfair’s claimed savings on Way Day for the items in the sample averaged 71% off, the actual savings on Way Day compared to Wayfair’s everyday prices right after the sale only averaged out to be a 16% discount.

*MOUSE PRINT:

What Wayfair does in their product listings for many sale items, and not just on Way Day, is make it appear that their own regular price is being cut by crossing it out and claiming it is now being offered at an often large percentage-off discount. The trouble is, this is not how Wayfair’s discounts actually work.

Take the mattress pictured above, for example. Is the $2,100 strike-through price really their regular price? Wayfair buries the answer in a 42,000-word page of fine print accessible through an inconspicuous “terms of use” link. Its strike-through price is really the list price or the highest price they ever offered the item, according to that disclosure.

*MOUSE PRINT:

Wayfair terms

The Federal Trade Commission’s Guides Against Deceptive Pricing says that comparison to a high list price or regular price that is rarely charged can mislead buyers as to the discount they actually receive.

Various states have similar false advertising laws. For example, in Massachusetts where Wayfair is headquartered, the company appears to run afoul of state consumer law by not “clearly and conspicuously” stating the basis for its price comparisons and discount claims. Simply put, under the attorney general’s regulations [940 CMR 6.05], when sellers advertise an item as “X% off”, it automatically means the discount is off the seller’s own regular prices – just the way a shopper would understand the claim. If sellers intend the savings claim to be a comparison to any other type of price, they have to finish the comparison — X% off what — such as by stating “83% off list price.” Similarly, putting a line through a higher price suggests it is the seller’s own regular price that is being reduced unless it is labeled otherwise. Wayfair’s product listings fail to make these critical distinctions and disclosures.

And Wayfair has an additional burden. List price comparisons are not even allowed under Massachusetts law unless the seller can demonstrate that a reasonable number of sellers in its trade area actually offer the goods at the stated list price.

We asked Wayfair to comment on our findings and their pricing policies. The company did not respond to two inquiries.

In our view, shoppers are misled when retailers make illusory savings claims based on inflated regular prices rarely if ever charged or by making comparisons to list prices that virtually no one ever pays. Why can’t sellers just play it straight?

Consumer World is turning over its findings to the Massachusetts Office of the Attorney General and other relevant agencies.

The spot-check of prices done by Consumer World is limited in scope, and cannot be used to project the average actual savings on all items during Way Day nor the number of items that did or did not revert to the claimed reference price.




 

 

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March 18, 2019

Thanks for Nothing, 2019 – Part 1

Filed under: Food/Groceries,Humor,Internet,Retail,Thanks for Nothing — Edgar (aka MrConsumer) @ 5:51 am

“Thanks for Nothing” spotlights advertising that seemingly promises a great deal, and then lets you down big-time, or makes a product claim that proves untrue, or just makes you scratch your head and laugh.

Example 1:

Buy Dig is an online seller of electronics and other goods. Recently they advertised a pretty high-value coupon online, $50 off.

$50 off

However, if you click-through to see the actual deal, you would no doubt be disappointed.

*MOUSE PRINT:

$2000 purchase required

To save that $50, you have to make a $2000 purchase, saving a mere 2.5% off. Thanks for nothing, Buy Dig.


Example 2:

The problem with this Aunt Jemima syrup doesn’t even require you to read the fine print ingredients statement.

Butter syrup

What? Contains no butter? Thanks for nothing, Auntie.


Example 3:

Nothing turns shoppers off like high shipping costs, but this example takes the cake.

high shipping costs

A cheap, small plastic bottle costs over $18 to ship and the tax is three times the item’s price? Thanks for nothing.


Example 4:

Finally, if you want a quick meal, ramen noodles are about as fast as you can get, and dirt cheap in this offer. The trouble is you could starve before your order arrives.

ramen noodles

Thanks for nothing, Amazon


If you find an offer suitable for a “Thanks for Nothing” mention, please submit it to edgar(at symbol)MousePrint.org .




 

 

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December 10, 2018

Even Angels Quietly Make Money Referring Buyers to Sellers

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:09 am

Last week, we told you about network TV morning news and talk shows receiving “secret” payments when they plugged particular products in deal segments on their programs.

The concept of affiliate marketing — where sites get small commissions for referring their readers to sellers — is almost as old as the Internet itself. When a reader clicks a link to a seller on a website, it may be specially coded to identify what site referred the potential buyer.

You might be surprised who is using affiliate links now — Oprah and even Consumer Reports.

Our own Consumer World website uses affiliate links sparingly and has for years, usually in conjunction with a bargain. But, unlike virtually any other site, we flag each such affiliate link’s description with two hot green plus marks (++). And those plus marks lead readers to a clear but small disclosure at the bottom of the page explaining that we may earn a commission if you make a purchase from that link.

*MOUSE PRINT:

Consumer World affiliate disclosure

There is nothing inherently wrong about a publication entering into affiliate relationships with sellers as long as it doesn’t affect the editorial process. The question is, how well disclosed is that financial connection to readers? The FTC’s endorsement and testimonial guidelines require clear disclosure when a product reviewer has a financial connection to the product shown. We all could do better on disclosure.

 

Consumer Reports

While preparing last week’s Consumer Reports section of Consumer World (for which we receive no money), MrConsumer noticed a surprising disclosure in their “Top Gifts Under $50” story. The piece highlighted various products that rated well in Consumer Reports tests and provided direct links to the sites where they could be purchased. What was unexpected was a disclosure in tiny print at the end of the story.

*MOUSE PRINT: [highlighting added]

affiliate disclosure

Yes, even Consumer Reports, famous for not accepting advertising, buying all the products it tests instead of accepting free samples, and having a strict noncommercialization policy, makes money referring readers to sellers of the products it features in some stories.

We asked the organization, particularly given its sterling reputation and image, why they would virtually hide a disclosure like that in the smallest possible type. A spokesperson for them responded in part:

“Consumer Reports recently added new retailers to its shopping program, making it easier for consumers to buy rated products from a variety of online retailers while they’re researching them on ConsumerReports.org. At the time, we elevated our shopping disclaimer to the top of the page. We also have another disclaimer at the bottom of the page that links to the About Us section of our website where people can find additional information about our Commercial Partnerships.”

The November 30th story with the tiny disclosure only at the bottom apparently was an update of a previous story before the format change and therefore only had a disclosure at the end.

And as to why Consumer Reports makes the disclosure in such small type even when it appears on the top, the spokesperson said, “I have no answer for that.”

 

O – The Oprah Magazine

Oprah's Favorite ThingsAnother angel in the public eye is Oprah. We told you last week that historically, products that appear on her “Oprah’s Favorite Things” list of gift ideas have been chosen based solely on their merit. And we can confirm that is still the case after speaking to a product maker who has appeared on the list.

But does this mean that she or her magazine have not figured out a way to capitalize on the list? Not quite.

What O – The Oprah Magazine doesn’t talk about too prominently on its website is the fact that they have an affiliate relationship with the primary seller of the items on the list — Amazon. Click one of the “buy at Amazon” links in the story and if you buy the item, ca-ching for Oprah’s folks.

And as they say in a famous Seinfeld episode, “not that there’s anything wrong with that.”

Except for this. It is only at the very end of the page of this year’s list, just above the Hearst copyright, that this tiny disclosure appears (in one very long line that we had to divide in half to fit here):

*MOUSE PRINT:

O Magazine disclosure

In conjunction with our story last week, we asked the editor of Oprah’s magazine a variety of questions including how its affiliate relationship with Amazon worked. We did not get a reply. Twice.




 

 

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