Electronic Retailer - June 2011 - (Page 14)

INDUSTRY REPORTS FTC Forum Free Means Free BY LESLEY FAIR Funny thing about free trial offers: They’re rarely free, but they often prove to be a trial for people whose credit cards are billed for transactions they didn’t expressly authorize. The latest in a series of law enforcement actions filed by the Federal Trade Commission demonstrates how important it is for businesses to use care when advertising their products or services as “free.” The FTC’s case centers on an international network of defendants spanning the globe from Utah to Cyprus. According to the complaint, they raked in more than $467 million from consumers in the U.S., Canada, the UK, Australia and Don’t make an unqualified “free” claim when you really mean “free for now, but we’ll bill you later.” It’s as simple as that. in continuity programs without their consent and then charged their credit cards or debit accounts for products they didn’t order. How did the defendants “disclose” the material terms of the transaction? show them. The FTC alleges that their evasion of credit card risk management systems was itself an unfair practice, in violation of the FTC Act. Of course, the case remains pending, but savvy electronic retailers know that when it comes to “free” offers, it’s always a good time for a compliance check-up. • “Free” means free. Don’t make an unqualified “free” claim when you really mean “free for now, but we’ll bill you later.” It’s as simple as that. • Disclose the details. If you intend to charge customers for future shipments, clearly and prominently explain how the plan operates before you seal the deal. Promoting a product as “free” and then burying the particulars will irritate customers and attract unwanted law enforcement attention. • Chargeback flack. Chargebacks are an inevitable occurrence for any retailer. What separates legitimate marketers from their less scrupulous competitors is how they respond. A business in it for the prosperous long haul will use chargebacks as an object lesson for improving their procedures and clarifying the nature of their promotions. Visit business.ftc.gov for more on the use of “free” in advertising. Lesley Fair is an attorney with the FTC’s Bureau of Consumer Protection. New Zealand through an elaborate scheme of misleading product claims, unauthorized celebrity endorsements, forced upsells, undisclosed terms and conditions, unauthorized charges and ruses designed to evade the credit card industry’s risk management system. One hallmark of the scheme, says the FTC, were promises of “free trials” for acai diet products, teeth whiteners, money-making programs and other merchandise. The complaint alleges the defendants enrolled people 14 According to the FTC, they used every trick in the Fineprint Playbook, including tiny type, pale colors, dense blocks of text, and hard-to-find terms and conditions. Once bitten, consumers were twice stung by what the FTC said were the companies’ undisclosed refund policies. According to the complaint, the defendants took steps to conceal their sky-high chargeback rates by opening new merchant accounts in the names of people who couldn’t be traced back to them. In addition, the FTC says the defendants responded to concerns from merchant banks and payment processors by creating phony “clean” websites to electronicRETAILER | June 2011 http://business.ftc.gov

Table of Contents for the Digital Edition of Electronic Retailer - June 2011

Electronic Retailer - June 2011
Contents
Calendar of Events
Your Association, Your Bottom Line
Industry Reports
FTC Forum
eMarketer Research
IMS Retail Rankings
Jordan Whitney’s Top Categories
Lockard & Wechsler’s Clearance & Price Index
Ask the Expert
The Evolution of a Global Business
UK Home Shopping Finds Its Niche
Guest Viewpoint
Brendan Condon Wants it All
Managing an Order from Start to Finish
Radio
Legal
Support Services
Fulfillment
Member Spotlight
Advertiser Spotlight
Bulletin Board
Advertiser Index
Classifieds
Rick Petry

Electronic Retailer - June 2011

Electronic Retailer - June 2011 - Electronic Retailer - June 2011 (Page Cover1)
Electronic Retailer - June 2011 - Electronic Retailer - June 2011 (Page Cover2)
Electronic Retailer - June 2011 - Electronic Retailer - June 2011 (Page 3)
Electronic Retailer - June 2011 - Contents (Page 4)
Electronic Retailer - June 2011 - Contents (Page 5)
Electronic Retailer - June 2011 - Contents (Page 6)
Electronic Retailer - June 2011 - Calendar of Events (Page 7)
Electronic Retailer - June 2011 - Your Association, Your Bottom Line (Page 8)
Electronic Retailer - June 2011 - Your Association, Your Bottom Line (Page 9)
Electronic Retailer - June 2011 - Industry Reports (Page 10)
Electronic Retailer - June 2011 - Industry Reports (Page 11)
Electronic Retailer - June 2011 - Industry Reports (Page 12)
Electronic Retailer - June 2011 - Industry Reports (Page 13)
Electronic Retailer - June 2011 - FTC Forum (Page 14)
Electronic Retailer - June 2011 - FTC Forum (Page 15)
Electronic Retailer - June 2011 - eMarketer Research (Page 16)
Electronic Retailer - June 2011 - eMarketer Research (Page 17)
Electronic Retailer - June 2011 - IMS Retail Rankings (Page 18)
Electronic Retailer - June 2011 - IMS Retail Rankings (Page 19)
Electronic Retailer - June 2011 - Jordan Whitney’s Top Categories (Page 20)
Electronic Retailer - June 2011 - Jordan Whitney’s Top Categories (Page 21)
Electronic Retailer - June 2011 - Lockard & Wechsler’s Clearance & Price Index (Page 22)
Electronic Retailer - June 2011 - Lockard & Wechsler’s Clearance & Price Index (Page 23)
Electronic Retailer - June 2011 - Ask the Expert (Page 24)
Electronic Retailer - June 2011 - Ask the Expert (Page 25)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 26)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 27)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 28)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 29)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 30)
Electronic Retailer - June 2011 - The Evolution of a Global Business (Page 31)
Electronic Retailer - June 2011 - UK Home Shopping Finds Its Niche (Page 32)
Electronic Retailer - June 2011 - UK Home Shopping Finds Its Niche (Page 33)
Electronic Retailer - June 2011 - UK Home Shopping Finds Its Niche (Page 34)
Electronic Retailer - June 2011 - UK Home Shopping Finds Its Niche (Page 35)
Electronic Retailer - June 2011 - Guest Viewpoint (Page 36)
Electronic Retailer - June 2011 - Guest Viewpoint (Page 37)
Electronic Retailer - June 2011 - Guest Viewpoint (Page 38)
Electronic Retailer - June 2011 - Guest Viewpoint (Page 39)
Electronic Retailer - June 2011 - Brendan Condon Wants it All (Page 40)
Electronic Retailer - June 2011 - Brendan Condon Wants it All (Page 41)
Electronic Retailer - June 2011 - Brendan Condon Wants it All (Page 42)
Electronic Retailer - June 2011 - Brendan Condon Wants it All (Page 43)
Electronic Retailer - June 2011 - Managing an Order from Start to Finish (Page 44)
Electronic Retailer - June 2011 - Managing an Order from Start to Finish (Page 45)
Electronic Retailer - June 2011 - Managing an Order from Start to Finish (Page 46)
Electronic Retailer - June 2011 - Managing an Order from Start to Finish (Page 47)
Electronic Retailer - June 2011 - Managing an Order from Start to Finish (Page 48)
Electronic Retailer - June 2011 - Radio (Page 49)
Electronic Retailer - June 2011 - Legal (Page 50)
Electronic Retailer - June 2011 - Legal (Page 51)
Electronic Retailer - June 2011 - Support Services (Page 52)
Electronic Retailer - June 2011 - Support Services (Page 53)
Electronic Retailer - June 2011 - Fulfillment (Page 54)
Electronic Retailer - June 2011 - Fulfillment (Page 55)
Electronic Retailer - June 2011 - Member Spotlight (Page 56)
Electronic Retailer - June 2011 - Member Spotlight (Page 57)
Electronic Retailer - June 2011 - Advertiser Spotlight (Page 58)
Electronic Retailer - June 2011 - Advertiser Index (Page 59)
Electronic Retailer - June 2011 - Classifieds (Page 60)
Electronic Retailer - June 2011 - Classifieds (Page 61)
Electronic Retailer - June 2011 - Rick Petry (Page 62)
Electronic Retailer - June 2011 - Rick Petry (Page Cover3)
Electronic Retailer - June 2011 - Rick Petry (Page Cover4)
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