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March 12, 2018

Blurred Lines: Can Readers Distinguish Ads from Content?

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

Some websites, even very reputable ones, sometimes blur the distinction between editorial content and advertising. Of course, consumers have a right to know what they are reading is an advertisement when that is the case.

To that end, the Federal Trade Commission has created advertising guidelines for websites that use ads that look like the surrounding non-advertising content (“native advertising”). It encourages them to make clear disclosure to distinguish advertising content from regular new stories or natural search results. But are those disclosures really working? To find out, the FTC just published a study where Internet surfers were exposed to various webpages and asked to identify the advertising, if any, on those pages. The FTC also modified those real pages with simple changes it thought might better identify sections that really were advertisements.

Here is a sample Google Shopping results webpage when searching for computer tablets, and an FTC-modified version of it better highlighting the advertising on it:

Google Shopping FTC

Google only inconspicuously disclosed on the top right of the results page that the links listed have been paid for by the sellers (“Merchant links are sponsored.”) [Note: We’ve added the red arrows.]

The second image reflected a minor modification by the FTC putting the word “Ad” right before each link along with an information bubble explaining that.

The FTC found that few viewers even noticed Google’s disclosure in the upper right corner. In the modified version, the word “Ad” stood out much more clearly.

Here is another example of tweaks made to advertising that appeared at Time.com in their mobile version:

time.com FTC

In the original Time version, the two “Around the Web” stories are paid placements with poor disclosure (“sponsored content”) in small type. The FTC’s version made clear this was “paid content” by centering that disclosure above the two stories and adding the word “Ad” under the one on the left which was an advertisement.

Although the FTC study (“Blurred Lines: An Exploration of Consumers’ Advertising Recognition“) was limited, some generalizations can be drawn from the results:

Using some of the common sense disclosure techniques … can greatly increase the likelihood that consumers will recognize an ad as an ad. Minor modifications, including changes to disclosure language, position, text size and color, and to other visual cues such as the borders around or background shadings of ads or ad groupings, can in combination substantially increase the likelihood that a consumer recognizes an ad as an ad and reduce the potential for consumers to be misled as to the commercial nature of paid search and native ads.

Websites could easily make changes like these with minimal effort. The question is, will they?




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January 15, 2018

When it Comes to Price, Shoppers Like to be Fooled

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:17 am

Back in 2013, StubHub changed the way it priced tickets on its website moving to an all-in model that included all service charges and fees. Under this pricing method, the price you saw was the price you paid. How novel and how pro-consumer! No surprise charges or extra fees. But here’s the problem: when buyers used ticket comparison websites, StubHub’s prices seemed higher compared to the other sellers that posted artificially low prices without including all their added fees. As a result, StubHub’s sales went down dramatically.

So in 2015, StubHub reverted to its old way of pricing tickets — showing a lower price, and then tacking on hefty fees. Here, for example, is the price they advertised for seats on the “Green Monster” at Fenway Park for a particular game just after re-instituting the original, old system:

Green Monster 1

And when you clickthrough to order tickets, this is the surprise you get:

*MOUSE PRINT:

$600 tickets

$90 in fees!? Of course, to add insult to injury, Green Monster M2 seats can have a face value of just $110 to $165.

Within days of advertising low-ball prices again, StubHub was able to significantly increase their market share, according to the Wall Street Journal. [Story not free]

Now fast forward to today, and see what StubHub is doing now. After you choose your tickets (in this example two $125 tickets) and BEFORE they disclose what the fees are and what the real total price of your order is, the system forces you to enter your credit card number and name and address.

*MOUSE PRINT:

Stub Hub 2018

Maybe this is a technique to make you feel more committed to buying tickets even if you experience price shock when the final cost is eventually displayed to you.

We shouldn’t have to put up with practices like this, but we do. And judging by their increased sales when they advertised a price before fees were added, we tolerate that practice too.

We seemingly like being tricked into thinking we are paying a lower price or getting a great deal even when we are not. The poster child for this somewhat irrational behavior was J.C. Penney, when its new president, Ron Johnson, a few years ago did away with their phony 50% off sales and discounts. Sales plummeted. And then Ron Johnson lost his job. New management reverted back to advertising big discounts from inflated regular prices, and guess what happened? Sales starting jumping back.

What does this say about us as shoppers?




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January 8, 2018

Did Toys”R”Us Really Make a Mistake in its Posted Return Policy?

Filed under: Computers,Internet,Retail — Edgar (aka MrConsumer) @ 6:29 am

Every December, Consumer World releases its annual survey of retailers’ return policies and this time around it found that three stores had tightened their policies since the year before. One of them was Toys”R”Us.

In 2016, the toy chain had a two-tier return policy: 90 days for most items, but only 30 days for various electronic goods like cameras, video game hard, computer hardware, etc.

*MOUSE PRINT:

2016 TRU 30 day items

In November 2017 when Consumer World visited websites to find the current return policies, the Toys”R”Us policy had changed. “Computer hardware” which had been in the 30-day category the year before now was in a new separate section of its own indicating only a 15-day return period.

*MOUSE PRINT:

Toys R Us exceptions 2017

So Consumer World reported that Toys”R”Us had shortened the return period from 30 days to 15 days for computer hardware in its December 18, 2017 report. (Keep this date in mind.) On that same day or the day after, in planning for a TV segment on return policies to air just after Christmas, staff from the Today Show contacted retailers to confirm the changes that Consumer World found. Toys”R”Us reportedly told Today that it had not in fact changed its policy to 15 days for computer hardware, and that it was still 30 days.

Taken aback by the possible error, MrConsumer doubled-checked his verbatim copy of the Toys”R”Us policy captured in late November and sure enough it said “15 days” for computer hardware. Surprisingly, however, a visit to the ToysRUs.com website on December 19 — a day after the report was issued and just after the Today Show contacted Toys”R”Us — revealed that the policy now said “30 days” for computer hardware.

*MOUSE PRINT:

TRU policy dec 19thDecember 19, 2017

What MrConsumer said upon seeing that Toys”R”Us apparently had changed its website after hearing from the Today Show can’t be printed on a family website. He did some sleuthing however, and discovered through the miracle of Google cache, what the website said the very day before the company heard from the Today Show, December 18.

*MOUSE PRINT:

TRU Dec. 18December 18, 2017

Consumer World asked the company why the policy had been changed back to 30 days and whether it was the result of the Today Show contacting them. MrConsumer was told in a phone call that the 15-day policy was listed in error and that the company changed it as soon as it learned of the mistake.

A review of archived copies of their returns page reveals that that whole separate section singling out computer hardware for a special shorter return period was added and has existed online at least since August 2017. The return policy signs in a T-R-U store checked by Consumer World on December 20, however, said “30 days” for computer hardware.

So what do you think? Did Toys”R”Us make an innocent mistake in their posted return policy online or did they backtrack when they found out that the change was going to be part of a news story on national TV?




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January 1, 2018

Amazon’s Free $10 Offer Switcheroo

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:44 am

MrConsumer recently received an offer from Amazon via email inviting him to get the Amazon app and if he did so, he would get $10 just for signing into the app.

Amazon $10 off

Clicking through to their website reveals that Amazon left out a key detail of their free $10 offer.

*MOUSE PRINT:

Amazon $10 offer detail

Rather than giving $10 to the recipient of the email offer if one takes their wording literally, Amazon is requiring a minimum $20 purchase be made in a very narrow window of time and not from any marketplace seller.

While most people might make at least a $20 purchase anyway, the point is that the offer should have been made clear in the email. It is not merely “get $10” when signing into the app for the first time, it is “get $10 off a $20 purchase.”

Amazon offer redone




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November 27, 2017

Some Retailers Misled Shoppers on Black Friday Savings

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

[Note: The next new Mouse Print* story will be December 11.]

For both Black Friday and Cyber Monday sales, retailers know that shoppers love a bargain, so the bigger the savings they can claim, the more sales they will likely ring up. Telling shoppers they can save hundreds of dollars by buying now is potent advertising.

The trouble is some of the discounts claimed are grossly exaggerated, promising illusory savings of $100, $200, $300 and even $600 in the following cases.

Take this Samsung HDTV, model UN55MU6290FXZA, that many major retailers used as a doorbuster deal for Black Friday. It’s a new item that was just introduced in August according to Samsung and was only recently stocked in stores. Some might call it a “made for Black Friday” TV. On Samsung’s own website, it was on sale for $499.99 — a savings of $200 compared to the regular price of $699.99:

Samsung TV Samsung site

A Samsung spokesperson confirmed for Consumer World that the manufacturer’s suggested retail price for this TV is in fact $699.99.


The Good Guys (maybe)


How did major retailers promote this TV around Black Friday?

Among others, Best Buy, Walmart, Amazon, Sears/Kmart, and surprisingly J.C. Penney (which is known for inflating regular prices just to offer goods at big discounts) played it straight. They advertised the TV as being on sale for about $499.99 — a savings of $200. (Of course, we don’t know if all these stores really offered the TV at what they claimed was the “regular price” of $699.99 price for any substantial period of time before discounting it to $499 — a requirement under some state laws.)


Best Buy Samsung TV

Walmart -Samsung TV


Sears Kmart 699-499TV

J.C. Penney Samsung TV



The Other Guys

1. BJ’s Wholesale Club:


At other stores, sellers took some liberties it appears in telling customers how much over $200 they would save if they bought this TV for $499. Early in November, BJ’s Wholesale Club seemed to suggest that its regular price for this TV was $699.99, and once put in the cart, the price became $499.99 — the standard $200 savings.

BJs TV Nov. 3

Then, in promoting its upcoming Black Friday savings event, the BJ’s cover item in circulars now proclaimed that buying this TV for $499 would save customers $300! Miraculous.

*MOUSE PRINT:

BJs Samsung $300 off

How did they do that? Online, BJ’s simply replaced the previous crossed out $699 regular price and changed it to a $799.99 regular price crossed out. Neat trick, huh? Raise the regular price and claim bigger savings.

BJs TV 799.99



2. Target:


BJ’s was not the only seller seemingly playing games with the regular price of this TV in order to make a more dramatic savings claim. Target, which historically has not engaged in questionable pricing practices, appeared to have slipped this time. In their Black Friday week circular, they claimed a regular price of $799.99, and a sale price of $499.99 — for a $300 savings. That is an extra $100 of phantom savings compared to the real list price of this TV.

To make matters worse, on their website, starting on November 19th, they were claiming a $400 savings because their regular price of this TV inexplicably jumped up to $899. (See update at the end of this story.)

*MOUSE PRINT:

Target 799 regular

Target $899 regular



3. Kohl’s:


The inflated regular prices compared to list price didn’t stop there. Kohl’s which has also been accused of inflating regular prices to offer illusory discounts on its merchandise, was selling this TV on its website prior to Black Friday “on sale” for $899.99 — a savings of $100 over its supposed regular price of $999.99. This TV is a key doorbuster in the Kohl’s Black Friday ad, selling for the standard $499.99 sale price but with a savings supposedly of $500 compared to its so-called regular price of $999.99.

*MOUSE PRINT:

Kohl's TV 999-899

Kohl's TV 999-499



4. Shopko:


Lastly, taking the prize for the most exaggerated saving claim is Shopko. They contend that this $499.99 TV on sale was regularly priced at $1299.99 — providing lucky purchasers with a whopping $800 in savings.

*MOUSE PRINT:

Shopko - 1299-499



The Law


Under FTC Guides Against Deceptive Pricing:

If … the former [regular] price being advertised is not bona fide but fictitious — for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction — the “bargain” being advertised is a false one; the purchaser is not receiving the unusual value he expects…

At least under Massachusetts law, “regular price” refers to the seller’s own previous selling price that the store actually offered the goods for. “List price” is different, and cannot be used as a basis of comparison unless a reasonable number of sellers actually offer the goods at that list price.

Now, just because Samsung has established a suggested list price of $699.99 for this TV, doesn’t mean retailers have to sell it at that price. They can establish any regular price they want for goods generally as long as that price is legitimate, meaning it is not substantially above the manufacturer’s list price, is not set artificially high to facilitate a false price drop with huge but illusory savings, and is one that the store openly charges for a reasonably substantial period of time.



Company Responses:


Some sellers, including Samsung itself, really did offer this TV at the full list price of $699.99 at least for a short time. It is doubtful, however, that all the stores that advertised this item as regularly selling for $799, $899, $999, or $1299 ever really offered it at those prices for any appreciable period of time in any of their stores. We don’t know for sure because not all stores responded to our inquiries including BJ’s and Kohl’s. We asked when they offered this TV at the high so-called regular price noted in their ad and how they respond to critics who say that the savings they advertised for this TV were exaggerated.



Target’s Response:


Target did respond, explaining that the $899.99 regular price for the TV was a “system error” and to their credit, they immediately changed their website to show only a $200 savings from the now updated $699.99 regular price.

Corrected 499-699 comparison

The company could not immediately explain, however, why other of their advertised Samsung TVs also had grossly exaggerated regular prices too.



Shopko’s Response:


A spokeperson for Shopko said it was not their policy to inflate regular prices, and was committed to following all laws and regulations. Michelle Hansen, the spokesperson, further indicated that the TV was a seasonal item gotten in for Black Friday and could not say if the store ever offered it at $1299. Of course, this suggests that the only price they ever charged was the $499 Black Friday price and they advertised an arbitrarily high regular price for the TV to attract customers to their big sale.



Final Thoughts


It is time for the FTC and state attorneys general to take action against retailers that have established a pattern and practice of deceiving the public about the actual savings that their customers can achieve when buying advertised items.

And for shoppers, the unfortunate truth is that you cannot always rely on advertising to truthfully disclose the amount of money you will actually save on any particular item.

[Note: graphics were edited for size and to add store logos.]




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