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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.




• • •

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.




• • •

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 .




• • •

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.




• • •

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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