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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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December 3, 2018

Network TV Shows Get “Secret” Payments for Hyping Products

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:29 am

Pressed for time? Read the shorter news release version here.

When you see a news story online or a feature segment on television about a product or service, you never expect the media in which it appears to have a financial interest in it.

The trouble is, today there are hidden financial connections between media outlets like TV networks, and outside commercial entities selling products or services. What appear to be regular informational segments on TV shows sometimes are really advertising in disguise. Consumer World has been investigating these secret connections for over nine months, and today reveals some of the surprising findings.

The issue is evident most clearly in “deal” segments run by the major TV networks several times a week. For example, Good Morning America (GMA) airs a popular Steals & Deals feature, and The View broadcasts “View Your Deal” twice a week. In these segments, show hosts or guest presenters demonstrate and tout five or six products that viewers can purchase for a limited time at deep discounts. And many are genuine bargains.

Oprah's Favorite ThingsThe products offered are unrelated to each other, but may be grouped together under a theme such as summer beach bargains. The theme of two recent deal segments involved “Oprah’s Favorite Things 2018.” That is an annual list of products that Oprah recommends in her magazine and through her surrogates in television segments as worthy products and gifts. In no way are we suggesting any wrongdoing by Oprah or the products that make her list. We are using it as just one example of the type of bargain segment that network programs are broadcasting.

Some media outlets have figured out a way to capitalize on the list. It is all done very quietly, without prominent disclosure to the viewer that the programs are making money directly or indirectly from the sale of these products.

Good Morning America

In early November, ABC’s GMA featured in a Deals & Steals segment a first look at six of Oprah’s Favorite Things for 2018, and offered them at deep discount:


Deals & Steals segment on ABC’s Good Morning America

There is no oral disclosure anytime during the segment that ABC has a financial arrangement to be paid by the makers of the products they are demonstrating. Only at the very end of the segment does any disclosure come up:

*MOUSE PRINT:

GMA disclosureDisclosure on ABC’s Good Morning America

“Promotional consideration” was provided by the six companies whose products were featured on the program. Normally this means that products were provided to the program to give to audience members, which did occur in this instance.

But segments like this are no longer just about touting deals to viewers and giving free merchandise to audience members. They are now about the program quietly receiving money based on the actual sales of the products promoted on the show. How do they do this? Viewers are sent to a special website created just for the show with these items, or to the show’s own website, and if they click on the special link provided and buy the item, the show gets a commission.

How do we know this? Certainly not from watching the program. It is only on the special GMA website (GMADeals.com and GoodMorningAmerica.com/shop) that there is an added disclosure:

*MOUSE PRINT:

GMADeals footer
Disclosure at GMADeals.com that ABC receives a fee on purchases

This is a bit different from the disclaimer at the end of the TV segment because it clearly says that if you buy the featured products, ABC is going to receive compensation. This is not an isolated incident.

The View

ABC also features bargain segments like this on The View. That program cleverly uses a vague oral disclosure at the beginning of the segment that says “We’ve partnered with vendors for at least half off.”

At the end of the Oprah’s Favorite Things segment on The View in early November there is a disclosure in the credits that the brands shown in that segment paid ABC “promotional and financial consideration.”

*MOUSE PRINT:

The View creditsDisclosure in credits on ABC’s The View

This does not clearly communicate to the average viewer that The View gets a cut of every item sold. Like GMA, The View sends shoppers to a special website (ViewYourDeal.com) where they can purchase the items shown. It is only there that the viewer first learns that ABC is going to be paid money when a purchase is made.

This sounds very much like an affiliate relationship whereby a reader clicks a product link on a website and is taken to the actual seller’s website. The website owner who referred the sale to the seller gets a small commission if a sale is actually made.

In ABC’s case, the concept of affiliate marketing has been transformed for use on a television program. If you buy an item you see promoted on the show, the program gets a commission. Clever. Very clever.

The Today Show

ABC is not alone in quietly collecting affiliate-type commissions. On NBC’s Today show, viewers are only let in on the secret via an explicit but fine print disclosure on a cluttered screen at the end of their Steals & Deals segments. They make no disclosure of the payments on their special website, deals.today.com, however. See sample segment.

*MOUSE PRINT:

Today disclosure
Disclosure at end of Today’s Steals & Deals segment

The Law

Under the FCC’s “payola” rules, if a program’s producers receive payment to feature a product, that fact must be disclosed to viewers during the program. Similarly, the FTC has two sets of advertising guidelines. They both require clear and timely disclosure: (1) if there is any financial connection between a presenter and the products being touted (endorsement and testimonial guidelines) and (2) if the presentation looks like a regular part of the program but is in fact commercial in nature (native advertising guidelines). Of particular relevance is the FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements.

We asked Disney-ABC’s PR folks four times to explain the differences between “promotional consideration” and “financial consideration,” who pays whom when these segments are aired, and whether ABC makes money in an affiliate-like relationship based on the number of products sold. Despite these repeated requests to representatives of both GMA and The View, no response was received.

However, a vendor whose products have appeared in a previous GMA Deals & Steals segment confirmed to Consumer World that ABC uses a commission structure whereby it receives a percentage of sales.

NBC did not respond to two inquiries.

The disclosures the networks make come too late and are couched in industry jargon. Viewers have a right to know upfront in clear and unambiguous terms that they are really watching an ad, that the networks are making money on each sale, and that the gushing product comments of the show’s presenters could be influenced by the networks’ likely desire to maximize commissions.




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October 22, 2018

Thanks for Nothing, Sears and Kmart

Filed under: Food/Groceries,Humor,Internet,Retail,Thanks for Nothing — Edgar (aka MrConsumer) @ 6:06 am

It is with a tinge of sadness that we lament the passing of hundreds more Sears and Kmart stores following their filing for bankruptcy last week. However, some of the dumb things that they have done can turn off consumers. For example, when retailers advertise a sale or reduced prices, shoppers expect to save money and be offered a good price. Sometimes, however, that wasn’t always the case at Sears and Kmart.

Example 1:

Just when Sears announced they were filing for bankruptcy last week, the local Sears in Cambridge, MA which had just started its own store closing sale, was adding an extra incentive — an extra 10% off your total purchase.

Sears 10% off

Great, except for one thing — the fine print on the coupon.

*MOUSE PRINT:

not at the register

What, you can’t use the coupon in the store and this is a store only coupon?

As it turns out, who knows what that really means because the Sears in Cambridge was automatically giving folks the extra 10% at the register, even without the coupon.


Example 2:

A couple of months ago, Sears MasterCard offered an unbelievable “month long” deal — get 20% back in points if you use the card at gas stations.

*MOUSE PRINT:

month long promotion

Apparently February has been displaced by August as the shortest month of the year.


Example 3:

People think that shopping online will generally save you money. These items at Kmart.com from marketplace sellers, however, challenge that assumption big time.

bread

.

matzo

.

Tide

Thanks for nothing, Sears and Kmart, for all these “deals.”


If you spot an outrageous or funny offer, please submit it to edgar (at symbol) mouseprint.org .




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October 8, 2018

Is Sprint Misleading Customers or the FCC?

Filed under: Internet,Telephone — Edgar (aka MrConsumer) @ 5:43 am

Sprint and T-Mobile are seeking to merge. As part of that process, they have to convince the FCC that the merger will not harm competition and would be good for customers.

To this end, Sprint submitted a filing to the FCC on September 25 claiming that its LTE data network was inferior to the other major carriers and they needed a partner to compete better.

Sprint Network Click Chart to Enlarge

Sprint’s coverage is depicted in yellow. You can see, for example, on the map of the U.S. on the right, that Sprint has a much more limited network than Verizon (in red). In fact, the company tells the FCC that its network covers “a much smaller geography” than the other carriers and therefore it needs to merge.

However, if you compare the coverage map from the Sprint website below directed toward customers with the ones above, Sprint makes it appear that its network coverage is very robust and broad.

Sprint network

*MOUSE PRINT:

Only in the tiniest fine print footnote does Sprint disclose that the above map includes roaming coverage, meaning areas where other companies have coverage and share it with Sprint customers. The map also includes non-LTE data coverage that they cleverly omitted from the FCC map.

footnote

In addition, the company tells the FCC it has problems with its network:

“Poor network experience is a leading cause of Sprint’s subscriber churn.”

“…consistency challenges impact both network performance and customer perception”

“Sprint has not been able to invest sufficient capital to achieve network performance necessary to attract and retain enough subscribers to improve its scale.”

Funny thing, Sprint has advertised for years on television that there is only a 1% difference in its network reliability compared to the competition.



2016 Commercial


2018 Commercial

Noting these contradictions, we asked the PR folks at Sprint some very pointed questions:

(1) Which is more accurate — what Sprint presented to the FCC or what they advertise to customers?

(2) If the FCC coverage map is more accurate, how does Sprint respond to customers who feel the company exaggerated its coverage area?

(3) Which is correct — Sprint’s network performance is lacking or it’s 99% that of competitors?

A Sprint spokesperson tersely responded:

“Thanks for reaching out. I don’t have anything to add to the filings. If that changes, I’ll let you know.”




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October 1, 2018

Staples.com Quietly Drops Price Matching

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:08 am

A little over a year ago, Staples was sold to a private equity firm. And since then, shoppers have been treated to some unpleasant new policies.

For years and years, consumers could buy reams of paper for a dollar or a full case for $9.99 after rebate. No more. Rebates have been discontinued and paper is no longer a giveaway item there.

Consumers have also complained that they can no longer earn rewards for online purchases at Staples.com.

And in mid-September, Staples.com implemented another anti-consumer change — it will no longer match prices. There was no big announcement of the change, but rather just a subtle change to the fine print on its website, noticed by reader David B.

*MOUSE PRINT:

Staples NO match policy

Ten days earlier, however, Staples.com did match prices, as it has done for years.

Staples matches prices

We asked the PR folks at the company why Staples.com no longer matches prices, why they don’t publish the store price matching policy on their website so shoppers can see it before going to the store, and what are the full details of their in-store price matching policy.

This was their entire barebones answer:

Thanks for reaching out. We are still price matching, 110% in- store at Staples retail locations.

Come on, Staples, you owe customers a better explanation than that.




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