Webloyalty

Retailers involved with marketing scam tell consumers: shop with us at your own risk

When there’s a lot of money to gain, many brands have trouble giving up questionable practices. And in the case of the online marketing case now in the Senate, many retailers came out this week with statements that indicate they’re putting profits ahead of their customers.

Last week the Senate held a hearing investigating the practices of online marketing companies that work with many retailers online to unwittingly enroll customers in loyalty programs that end up costing a lot of money.

Multiple retailers have severed ties with the companies in the following week. But not all. Many companies, from Priceline to Classmates.com, FTD, Shutterfly and Orbitz, think they’ve done nothing wrong and it’s up to customers to read the fine print.

But by enrolling people in these programs without asking for additional credit card information, the retailers breached the trust of their customers. For some retailers — especially those known for questionable deals at absurd prices — that might work. But for most, earning revenue from confusing customers is bad business.

Congress subpoenas web loyalty firm

How much disclosure is enough online? Congress has issued a subpoena to online marketer Vertrue for making unauthorized credit card charges online, and regardless of how it turns out, the increased exposure should prove bad for the business of blind credit card transactions.

The request by the Senate marks the Commerce Committee’s first major subpeona to get documents from a private company since the 2002 Enron scandal.

Committee Chairman John
Rockefeller wrote in a July 28 letter to Vertrue Chief Executive
Gary Johnson that consumers are struggling to get by during the recession, and “allegations that your company is making this situation
worse by charging consumers for services they do not want or
use are extremely troubling.”

Vertrue maintains that it has not done anything unlawful. And said that it requested the subpoena because the Senate was
asking for information that could “include personally identifiable
information about the consumer.” Meanwhile, Vertrue has failed to disclose email, financial documents and other internal communications and has been accused of “slow walking” the investigation.

Right to reply: Webloyalty / ShopperDiscounts

Webloyalty / Shopper Discounts right to reply; image thanks to altemark via FlickrEarlier this week on this blog Graham Charlton discussed whether or not retailers should promote third party shopper discount schemes at the end of the checkout process. 

The way this usually works is that you buy something, and after having your order confirmed are invited to accept a ‘£10 off your next purchase’ or similar. The schemes are operated not by the retailers, but by a partner.

Graham bought some train tickets via TheTrainline.com and stumbled across one of these offers at the end of the checkout. He found it confusing, and he’s not alone… many consumers have also complained (‘I was duped’, ‘I’m another victim’, etc).

Naturally the discount scheme operator, Webloyalty, is not thrilled with our coverage, and marketing director Gill Hynes has written in to complain. 

Should e-commerce sites be offering rewards schemes?

I’ve been booking some train tickets through thetrainline.com, and aside from the steep £2.50 charge for using a credit card, I was disappointed to find myself on a pop-up page offering me a cashback voucher and other rewards. 

The offer comes from a company called Webloyalty under the name of Shoppersdiscounts, which has come in for flak before from customers who feel they have been duped, so should thetrainline and other e-commerce sites risk their reputations by using such schemes?

Shopperdiscount offer on thetrainline