TechCrunch has just published a post titled “Post Transaction Marketing Hall of Shame” with the subtitle “Hundreds of Well Known E-Commerce Companies Rip Off Customers”
From the TechCrunch article:
“Hundreds of well known ecommerce companies add post transaction marketing offers to consumers immediately after something is purchased on the site. Consumers are usually offered cash back if they just hit a confirmation button. But when they do, their credit card information is automatically passed through to a marketing company that signs them up for a credit card subscription to a package of useless services. The “rebate” is rarely paid.”
How “Click Happy” can you get?
What immediately came to my mind was something I read from the FTC Negative Option Report back in February of 2009…
A “characteristic of people online involves what Professor Hillman and Mr. Grossklags described as “click happy” or exuberant Internet use. Specifically, users click through webpages quickly, without paying much attention because they want to complete a given transaction. Professor Hillman cited research finding that online shoppers “enter a seamless sequence of responses, a flow state in which their sense of time and reality become distorted and their self-control is diminished.” As a result, and as discussed in more detail below, users do not read or understand the terms of agreements they enter into online.”
…which is interesting to think about in light of the report included in the TechCrunch article…“Aggressive Sales Tactics On The Internet And Their Impact On Americans” from the Committee On Commerce, Science, and Transportation’s Office of Oversight and Investigations which presents a complaint in which Web Loyalty customer Chris Steffen was surprised to learn that he had been signed up for a membership to a program called Reservation Rewards which he concludes happened when he purchased movie tickets through MovieTickets.com (apparently as the result of a post-transaction sales tactic).
I think what is really insightful on Chris Steffen’s part is contained in the complaint he sent to WebLoyalty (addressed to “Joni”, the customer service rep he spoke with):
“Imagine yourself, Joni, getting on a computer to book movie tickets for the next big show and you’re in a hurry because you and your friends decided to book movie tickets for the next big show and you’re in a hurry because you and your friends decided to go at the last minute. You want to make sure you order your seats in time so you can have dinner before the show. Then, at first glance you get what looks like a coupon for 10 bucks off your next purchase of tickets. You don’t read the fine print because you’re in a hurry and next thing you know you’re signed up for some worthless service.”
In other words Chris Steffen is describing what might be considered a “self-imposed limited time offer” based on the need to take some other action (getting to the movies) quickly.
Interesting, because in the State of Texas’ initial complaint against Infusion Media (Google Money Tree) one of the points included is that “the sense of urgency Defendants intentionally create discourages consumers from reading the disclosure.”
Three strikes and your out (of more money)…
So in the MovieTickets.com example discussed above we potentially have the following three dangerous elements (from a consumer’s standpoint):
- A “Click Happy” customer…
- …with a sense of urgency (to get to the movies)…
- …having their credit card information automatically passed to a third-party company that enrolls them into a membership program in which the customer incurs monthly charges.
Internet Usability Expert Jakob Nielsen and WebLoyalty CEO Rick Fernandez seem to disagree on how well disclosed the terms of the Reservation Rewards offer is:
In the video, WebLoyalty CEO Rick Fernandez claims that WebLoyalty is “trying to make this process as simple and as clear as possible for the consumer”.
But even if they continued to use the post-transaction sales tactic (simple), wouldn’t “as clear as possible” mean putting the details about the monthly charges right ABOVE the button the customers click that enrolls them in the offer?
One thing is “clear”. Post-Transaction Sales Tactics are great for the bottom line:
According to the TechCrunch article on Post-Transaction Sales Tactics, “Affinion, Vertrue, and Webloyalty are the three largest companies partnering on these scams. The report states that these three companies have earned over $1.4 billion in revenue from 35 million transactions. 4 million people are currently enrolled in the plans.”