Why don’t you just give me 100% off? Coupons that don’t really help much

A few weeks ago, I went to Staples to buy some printer paper.  After I found what I was looking for, I walked to the register.  “Can we e-mail you the receipt?” the sales clerk offered.  “Why Yes!”  How convenient could THAT be – to have my receipt in my e-mail, instead of lying on my kitchen counter for the next three weeks? “How awesome that Staples wants to help fix my record-keeping deficiencies by e-mailing the receipt,” I thought.  (silly me) 

What they REALLY wanted was to be able to send me a gazillion e-mails touting sales and discounts. (or, what I call “almost discounts”)  The very next day, I got an e-mail with a Staples coupon. Then (on day 2) I got an offer on the Staples purchase I was to make after THAT.  It soon became apparent that the new Staples sales strategy is to pepper me with e-mails offering a discount, until I submit and buy something.  Soon after that visit, I ran out of toner.  “Beauty,” I thought.   Toner is way expensive.  But, I have a coupon from those awesome folks at Staples, I’ll just use that.   

Are we in a relationship? 

Normally, a company is not allowed to send you unwanted e-mails.  According to Federal Law (the CAN SPAM Act to be specific) companies are not allowed to send you unsolicited e-mails, unless the two of you have what’s called an “Established Business Relationship” (EBR) with them.  If you want to read the act itself, click here.  If you want to read what it actually means, click here.

To be sure, there is very little that you need to do to get yourself into an EBR and sometimes you have one without knowing it.  If you fill out an application online, enter into a contest, do business with one of their affiliates or sister companies – you have an EBR.  It’s silly to think that just by saying hi to these people, you have started a relationship.  But, that’s the law.  Getting out of the relationship is easy though.  You don’t have to come up with some “It’s not you, it’s me,” speech.  That’s because  every e-mail that you get with a business offer – whether you have an EBR or not – should have an area at the bottom for you to “click to unsubscribe.”  Once you do that, they have to stop sending you e-mails. (they can take a week to do it, but they’ll still stop)

When I first went to Staples to buy the paper, I created an EBR.  Once I gave them my e-mail I was in for it.  But, they’re gonna send me coupons so I don’t have to spend so much money on toner? “woo-hoo! I’m in!”   (Famous last words……..)

Is it good for ANYTHING?

Here is the coupon that I got from Staples:    It offered me 25% off of any “office supplies” that I was going to buy for more than $75.00.  Sweet!

As I approached the cash register, I figured out what 25% off would be.  I’m not the Rain Man or anything.  But, the official Dad of Consumer Courage is a CPA after all.  So it’s in my blood.  (Hey Pops!)  Anyway, I proudly held up my phone so the cashier could scan the coupon and give an official count on how much moola I was going to keep, when she said “Uh. I don’t think that covers ink.”  Hmmm.  I looked at the screen and started to scroll madly.  Then I came across this (in lighter and smaller font as a matter of fact):

Valid in Staples® U.S. stores only. Excludes
Food and Breakroom Supplies,
Janitorial Paper,
Chemicals and Cleaners,
Appliances & Housewares,
Safety & Medical Supplies,
Facilities Supplies,
Ink & Toner,
Ream and Case Paper,
Flash Drives,
Furniture and Postage Stamps. 
Limit one coupon per customer, nontransferable. Each item purchased can only be discounted by one coupon, applied by cashier in the order received and prior to tax. Coupon not valid if purchased or sold and must be surrendered. No cash/credit back. Not valid on prior purchases or purchases made with Staples® Procurement or Convenience Cards. Expires 1/17/15.

[The wacky spacing of what is NOT included was done by me, by the way – for effect] 

I read it out loud to myself. (strangely enough this list looks even longer when you are reading it on your phone).  I actually asked her “What CAN I buy?  This looks like everything in the store” Her reply? (I’m NOT making this up) “Well, you can buy some pens.”  (My well-reasoned complaint to the manager wasn’t any more satisfying, by the way) 

Are they allowed to do this?  In the words of the late Myron Cope   “You betcha.”

Editor’s wanton smart-alecky comment: I’m thinking about contacting Jeopardy and asking them to create a category called “Name that Staples Product™” Alex Trebek can read the exclusions in the coupon and contestants can try to name a product that the coupon will let you buy.    

Exclusions rule

Many advertisements have that are specifically NOT included, even though you would normally think that they are covered.  Those are called “exclusions.”  The company that makes the ad is allowed to have exclusions.  What the law cares about most is whether it is easy for the consumer to figure out which items  are NOT included, without being fooled?  In Ohio, the exclusions have to be obvious.  The actual rule states that the language must be stated “clearly and conspicuously [and] in close proximity to the words stating the offer.”  For example: If the ad says “FREE,” anything that is NOT free has to be listed in language that is as big as the word FREE and in a place where you don’t have to go looking for it.  Footnotes are not allowed.  

Editor’s legal-beagle-mumbo-jumbo note: Although the rule that covers advertisements doesn’t say so, it’s pretty clear that it applies to coupons as well.  If you’re bored, you can look up Renner v. Procter and Gamble,  and see where the court treats it as a foregone conclusion that the exclusions rule includes coupons as well.

So, how are they doing? 

From a “You’ve got to be kidding me” perspective, they are all wet.  I mean C’mon Staples!  As far as I can tell, the only office supplies that I can buy and still qualify for your discount are the aforementioned pens and the candy that you have attached to the register. 

How are they doing as far as the letter of the law goes?  We’re not so sure their coupons pass muster.  The exclusions language was in a smaller font, a much lighter color and at the bottom of the ad. (Remember, the language that tells you what is NOT included in the ad needs to be “in close proximity”) 

Are they alone? 

Not hardly.  It seems as if sending out coupons with a shocking number of excluded items is normal.  Dicks had a coupon with a list of exclusions that looked like it might have been award-winning, so did Macy’s. Just for fun, here are some other coupon SNAFUs.  Some that are Jay Leno-worthy . And one that was issued by a golf course in Wisconsin which (as far as we can tell) was the worst idea for a promotion in the history of …well….history

…..But back to our story.

What you can do about it?

Read the coupon before you leave the house is the first thing.  This might not increase the amount of times that you qualify for a deal. But, it might save you a trip.  Once you are at the register, you might be too uncomfortable to rethink your purchase (especially if there’s a line).  You can try to talk the manager into giving you the discount anyway.   Be warned though: getting the cashier at your grocery to ignore the exclusion on your coupon might go over a lot better than getting them to do it at Staples, where (at least at the store where I went) they don’t seem to be too concerned whether or not I become a repeat customer to their establishment. 

As with any consumer statute, Ohio’s law says that you have the right to ask for $200 in damages, even if you don’t lose money.  But, it seems to us that filing suit over a coupon exclusion might fall into the mountain-out-of-a-molehill category.  Whatever the case, be careful if you plan your shopping trip around a coupon.  You might end up buying a lifetime supply of pens.

Posted by: Mark Wiseman (who at one point in his life probably COULD have eaten $75.00 worth of Reese cups)

Why Fast, Easy & Reliable isn’t always good (how a Payday ad campaign is bending the truth)

For some reason, Consumer Courage has been seeing a lot of ads for PayDay lenders.  They claim to be ‘there for us’ and seem to be really nice people.  But, are they?   First a little background. 

What exactly is a PayDay loan?  

PayDay loans are short-term secured loans.  Short-term, because the lender expects to be paid back in less time than a conventional loan.  Conventional loans have a life-expectancy that is described in terms of years.  Short-term loans take way less than that.  PayDay loans are designed to be super-short (usually not longer than 15 days – which is the same amount of time it will take the borrower to get his next paycheck).  Payday loans are designed to take advantage of the most vulnerable among us.  Two-thirds of PayDay borrowers make less than $30,000 per year, while a third have a yearly household income of between $10,000 and $20,000. 

The loans are ‘secured’ – which describes when the lender takes a legal interest in some identifiable thing that they can get their hands on, if the borrower doesn’t pay.  The security in this case – the Borrower’s next paycheck – is not what is typically described as security for a loan. 

Editor’s legal-beagle note of pickyness: there are some who might say that making you sign over your paycheck does not qualify as ‘security’ in the strict sense of the legal definition.  They’ll get no argument here. But, for purposes of this post and to increase understanding of how the borrower who takes out a PayDay loan loses any meaningful choice about how to pay the loan back, Consumer Courage will invoke a tad bit of linguistic license.

Since they can’t put a lien on your paycheck (which is what they do with a car loan or mortgage) the borrower is required to create this security themselves.  When you borrow money from a Payday lender, you give them a post-dated check for the repayment amount of the loan.  The date is, of course, the date of your next paycheck. What will you do for money, when your next paycheck arrives and you have to give your money to the PayDay lender? This is the question they hope you will never ask.  What will happen is that you will have no choice but to take out another PayDay loan, entering into what is called the ‘Cycle of Debt.’  (I know what you’re thinking: “What if I just cancel the check?” You could.  But stories of how vicious PayDay lenders are when they have to call you to collect their money are the stuff of legend)

This cycle is so predictable and so profitable, it drives the PayDay industry.  They get you hooked and then make a ton of money, because you are unable to stop using their product.  (For those of you keeping score at home, this is the exact premise that the Crack industry is based on – with one notable exception – selling crack illegal in Ohio, PayDay lending is not)  Let’s take a look at the claims their ads make and see if we should get a PayDay loan. 

“I have poor credit and cannot get a traditional loan…. They have been there to pay the bills, when I can’t get money from traditional Banks……..

This claim implies two things – That your credit score has nothing to do with whether you should be taking out a loan and that the PayDay lender is there to help, much like an old friend. We’ll take the second point first.  PayDay lenders (and any lender for that matter) are not giving you money because they just “LOVE YOU.”  They are lending you money, because you are going to pay them back MORE than they gave you.  So much more, in fact, that they will spend money in advertising dollars, lobbying dollars, and promotional dollars to get you and more people like you to use their services over and over again.  

The first point, that people with bad credit are somehow getting around the banks silly requirement that they have good credit, is a common bit of bogusness. There is an ad across the street from Consumer Courage’s world headquarters that says “We lend money to people, not credit scores!”  Perhaps.  But, those very same people in the ad are going to make sure that you can pay them back.  If you have bad credit, they are going to make DARN sure.  How? By having you sign your paycheck over to them and by guaranteeing that you’ll have to take out a new loan in two weeks. 

If a lender wants to take time to figure out whether you can afford to repay a loan, it’s not just some bookkeeping nonsense that you should try to avoid, it’s for your own good.  If you can’t repay a loan, you will get sued and might even get your wages garnished.   If someone is willing to lend you money without looking at whether you can afford it, it should set off alarm bells in your head.  (In Ohio, if the lender gives you a mortgage without first figuring out whether or not you can afford it, they have violated the law.  Unfortunately, it’s not the same with PayDay lending) 

“Instead of having three bounce fees w/my bank, I have ONE repayment fee that was a fraction of what my bank fees would have been………

The fee for a single Payday loan, might actually be less than a bunch of overcharge fees put together.  But, when you consider that 75% of the people who take out a payday loan take out between 11 and 20 loans in a row, this claim is more than a little misleading.  Also, check bounce fees are not an inevitable fact of life.   Almost every bank offers some kind of overdraft protection for checking accounts.  Call your bank and see what you have to do to avoid overdraft charges. It might be cheaper than you think. 

“This PayDay lender is the best.  There are no hassles, no hidden fees and they always got the loan the very next day into my account……

If you are shopping for candy-bar, Consumer Courage recommends going someplace where there are no hassles and where you can get the candy as quickly as possible. If you are going to borrow money and then sign a stack of papers that gives the lender permission to swipe your next paycheck, perhaps quickness is not the most important consideration.  Because their business model is based on tricking you into giving them repeat business by holding your paycheck hostage, this claim should sound more like bad news than a selling point.   

“When I applied, they gave me all the payment details up front and that’s all I paid back.  No hidden fees of any kind…….

Just to be sure, let me give you the details now about every PayDay loan you will ever see:

If you take out a PayDay loan, you will pay back the loan, which will have an interest rate that is way too high and you won’t be able to stop, because your next paycheck will be gone. 

As for the claim that you will get the details ‘up front’ and that there will be ‘no hidden fees,’ I wouldn’t be surprised if it were true.  But, a few other ‘details’ make these claims nonsense.  First, they can give you a list of the fees in itty-bitty print on the back of the contract.  They will not be ‘hidden’ in the technical sense. What they will be is outrageous, high and a total ripoff. 

Second, just because they show you the fees, doesn’t mean that you’ll have a choice.  Try this for fun, if you sign a contract for a PayDay loan.  Cross out the fees that you don’t want to pay (like the ‘check-cashing fee’; the ‘processing fee’; and the ‘licensing fee’) and see whether they give you money, or kick you out of the store.

“PayDay lender is always there for me, when I need a loan.  The money is in my account the next morning.  And the best thing is, I can do the whole thing online with no phone calls and or faxes……

A friend who helps you change a flat tire at midnight on a lonely road; who watches your dog, while you take your sick kid to the emergency room on a Sunday afternoon; or who gives you a ride to and from work, while your car is at the shop is ‘Always there’ for you.  Somebody who gives you money, only if you sign your paycheck over to them is USING you.  There’s a difference.


Fast?……You bet.  Easy?…….Check.  Reliable?……………I’d say.  A good idea?  Not on your life.

Posted by Mark Wiseman:  Who would gladly watch your dog. (the flat tire at midnight thing might be a little harder to arrange………..) 

Can they really say that? (when an ad goes over the line and what you can do about it)

Consumer Courage recently heard an unusual tag-line at the end of an ad for weight-loss pills. It went something like this –

“If you find you’ve lost TOO MUCH weight, it may become necessary to start taking the pills every other day.” 

“Wow.  A weight loss pill that is so effective, it’s dangerous! Where do I get some?” (says Mr. Gullible) When you think about it, this is really a brilliant strategy.   They’re not coming out and claiming that the product will make you lose so much weight that it will be dangerous.  (That would be lying)  They can count on you to make that claim, all by yourself.  You listen to their warning and your own mind makes the conclusion for them.  (“They’re putting a warning into the ad,” you think. “This must’ve really happened”)   It’s the advertising equivalent to push-polling.

Push-polling is when somebody wants to spread a rumor about a candidate, just before an election.  Instead of calling you on the phone and saying “Joe Flebeitz is a womanizer,” they pretend that they are taking a poll and ask a loaded question, like “Would it make you more or less likely to vote for Joe, if you knew that he has had three affairs on his wife in the last 10 years?”  You hang up the phone, assuming that Joe is a cheater, vowing never to vote for such a louse.   You’ve been played and don’t even know you’ve been manipulated.

Back to our miracle weight-loss drug.  Like another drug whose effects might just happen to last for a whole four hours (!) they are not actually promising that this is going to happen.  But, you believe it’s possible, by the time the ad is over.   Not only do you remember the name of their product, but you actually believe that it’s TOO good at making you lose weight.  Since it’s your mind that made the conclusion, you’re not even skeptical.  And since fake promises are what will get them into trouble (as we’ll see below), they are getting their message out, without actually breaking the law. Not surprisingly, nearly all consumers are skeptical about claims made in advertising.  So, it makes marketing sense to devise a way to present the promise to you in a way that you don’t recognize as being just another fake advertising claim.

Editor’s incredulous note: I understand that the amount of people who don’t believe an ad approaches 100%.  What I cannot believe is the way in which our minds convince us not to worry about the death & dismemberment warning that accompanies some drug ads.  If you were ordering a mushroom pizza and the waitress told you that ‘In independent tests, people who have eaten our mushroom pizza have suffered debilitating pain, monumental nausea, violent nightmares and – in some cases – deaths have occurred,’ you would knock her down, trying to run out of the restaurant.  Yet, people line-up to buy the wonder-drug that acknowledges these very same side-effects.   Be that as it may…….

There oughtta be a law

In this particular case, there is!  The Ohio Consumer Sales Practices Act (CSPA) makes it illegal for any advertiser to make any claims in an advertisement that would cause a ‘reasonable consumer’ to believe the claims, unless they have facts to back them up.  So, unless they have test results that show that their magic pill causes weight loss, they can’t say “this will make you lose weight.”  But, you’ll recall that our commercial only had a warning about what to do if you lost ‘TOO much’ weight. 

To be sure, there are other sections in the CSPA that could apply to an advertisement that you see or hear.  The advertiser is not allowed to:

  • Use bait & switch tactics (advertise one product to lure you into the store and then try to sell you another one);
  • Use the word ‘FREE’ when it’s not really free;
  • Mislead you about the product’s warranty, it’s characteristics, it’s price, that it’s new, when it’s used; and
  • If there are any exceptions or exclusions to any offers that they make to you in the ad, they have to make those exceptions obvious for you to see.


Who’s the watchdog in all this?

At the local level, the Ohio Attorney General has the ability to require the advertiser to ‘substantiate’ any claims that they make in their ads.  If the AG hears about an ad with a claim that might be not so (shall we say? …..) honest, they have the power to send a letter, requiring them to prove the facts, behind the claims that they made.   Failure to respond and prove their claims (with some objective facts), is a so-called ‘Deceptive Act’ under the CSPA and the Attorney General can sue them.

Nationally, The Federal Trade Commission has the ability to go after anybody who is using a ‘deceptive advertisement.’  But, the law that gives the FTC its power to act only gives the Federal Trade Commission the right to get in the advertiser’s business.  (Regular citizens can sue under state law.)  The FTC can sue the advertiser and ask the Court to fine them and prevent them from making the same (or similar) claim(s) in the future.

The Food & Drug Administration can also go after companies who lie in their ads (if those ads are marketing food or drugs).  And boy is the FDA going after people who lie in their ads.  Here’s the page dedicated to all of the  warning letters that the FDA sends out.  and here is the page that shows all of the enforcement actions (cases where the FDA actually issued fines for misleading ads).  

Every once in a while, somebody gets nailed for telling a whopper.  (like, when Kellogg’s had to pay $4 Million to settle a lawsuit, filed by the FTC because they claimed that mini-wheats could ‘improve children’s cognitive abilities’ 

Can you count on the threat of action by one of the Government watchdogs to keep advertiser’s honest?  (We’d like to say yes. But, after learning that there is an ENTIRE PAGE on the FDA’s website dedicated to enforcement actions for companies who market ‘Fake Cancer Cures,’  we’re not so sure that anybody so scared that they’ll keep from lying in their ads) 

If you want to get a quick lesson on how to watch out for bad ads, go to Truth-in-advertising’s website,  or visit their ‘deceptive marketing 101’ page.   In the meantime, the next time you find yourself picking up the phone, because of some fancy claim in an advertisement, take a deep breath and try to figure out if it’s not the people making the ad who took too many pills.

Posted by: Mark Wiseman (who’s favorite ad is the little kid telling the knock-knock jokes to the AT&T guy…. “Queen my dishes please…….it’s queen…..to make it funny”)