In my 9 years online, I’ve never had the chance to use a “The Death Of..” headline.
I do today. Scratch that one off my list.
Here’s the deal:
Ryan Lee just posted a short video, and a redacted letter that he got from his merchant account to his blog.
Esentially, Visa and MasterCard are putting the breaks on and in some cases killing merchant accounts that pitch “Free with paid Shipping”, “Free Trials”, and “Opt-Out (They call it “Negative” Continuity).
Here’s the link to Ryan’s Blog:
(It’s a LONG link, so if it wraps to 2 lines, make sure you copy the whole thing and paste it in your browser).
Do me a favor – watch Ryans Video and read the letter from his merchant account, and then head back to this blog post and tell me what you think.
My reaction is simple: WOOOOOOOHOOOOOOO!
While I hate that the bad apples are causing legitimate folks to have to jump through the odd hoop or two, the fact is, the real jerks are gonna be shut down cold. And if consumers can worry a little less about fraud, that makes the entire industry better.
Post your thoughts in the comments below…
May you live in interesting, strange, and slightly surreal times,
Andy
P.S. If you leave a comment on Ryan’s blog, please do tell him that I sent you to visit – he’ll like that, and send me In and Out Burger Coupons.
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I’m with the woo hoo brigade on this – reduces credibility for the ‘industry’.
I used forced continuity, but only because my shopping cart provider doesn’t have “optional continuity” as an option.
So I’m screwed either way….either getting scrutinized by VISA/MC or having to find a new shopping cart provider. Either way, it sucks.
Andy,
I’m with you. I think this is going to be a game changer allowing the legitimate businesses to breath a bit knowing their customers are protected from illigitimate programs.
I’ve been running the WEST Program for two years now with an up front continuity and it is very easy to cancel and my customers are very happy and there has never been a request for a refund.
It’s truly time people stop treating internet business as a game and, instead, treat it as a valuable service you are providing to good people who need your help.
You’ve set that example time and again Andy and I appreciate you and guys like Ryan for that.
Ciao
Bob Yeager
Founder of The World Entrepreneur Success Training Program
“Keep business clean and people will love you for it:)”
I agree. I’ve rolled my eyes so often at “free” offers I’ve learned I can see my brain…through my optical meatus, of course!!
Seriously, though. Transparency is the new buzz word.
The Stompernet forced continuity magazine (not sure if it’s still around) is/was no better than the majority of the rebill offers out there.
as emailed:
Hi Andy,
Reading your email,
“Da Blawg” caught my attention –
And I just registered the domain name.
Probably not the best for seo/sem, but cute.
At the moment, I am not sure of how I will be using it,
but thanks for the inspiration.
Regards,
Julie
julie@moneybloggingsuccess.com
http://www.moneybloggingsuccess.com
http://www.businessleadsgenerator.com
http://www.writeformeonline.com
http://www.ibuzzbizz.com
PS maybe it is a good thing that forced continuity is having the brakes applied,
and probably the market is becoming wary of it anyway, and becoming aversive to it.
It is not pleasant to feel “tricked” into payments. Using a forced continuity method,
can adversely affect the customer perception of the seller, and could damage
the development of the relationship with the client, and therefore be detrimental to sales in the longterm.
I guess what gets me upset, is how stupid consumers are and the lengths we have to go to in order to protect people from themselves. Don’t get me wrong, the scam-my businesses suck.
Can we chastise and rant about consumers being dumb a bit. When lured in by these “free” offers, do any of these consumers ever think, geez, how cana company afford to send me free stuff, will this gravy train of free ever end, gosh what is in it for them giving me free stuff?
Count me in with the WOOOOOOOHOOOOOOO crowd! There has always been something about the forced continuity that just didn’t seem right. While it may not be outright deceptive, at least for those who actually read before they purchase, it still leaned toward being sneaky in your business dealings. Same thing with the “free cd” with priceless information, and “all it will cost you is a small shipping charge of $10 just to cover my expenses.” I could mail the same cd for maybe a couple of bucks. Let the transparency begin and hopefully clean up the online marketing industry.
I was first notified about this by Fred Gleeck. I contacted a friend who works at Capital One to see if she knows anything. According to her they (Capital One) loved the fees they collected. Per my friend they got paid in many ways, from the purchaser, seller, over draft fees, charge back fees, etc. If Capital One change their terms it’s because MC/Visa forced them to.
Gotta say I’m happy everyone has to be up front. I think everyone felt their way of doing business was fair. Problem is they have a vested interest in their program so their view of things were not credible. Buyers felt different. Too bad it had to come to this.
At first my reaction was “Oh Crap!” But after thinking about it, I agree with you Andy. Do I want to be viewed as a sneaky marketer in my outdoor niche with a continuity program? That is being short sighted. So now I’ll have to restructure my program, but hey, I feel better about not taking the chance on alienating my customers in the short term. It’s all good!
Randy VanderVeen
http://HuntFullTime.com
Does this mean that now I can get the swim suit issue without taking an entire year of Sports Illustrated?
Do I get the free cell phone with only an option to take the year’s contact with Verizon?
How about 4 CD’s for $1 without committing to buy more in the future?
Forced continuity wasn’t developed as an internet marketing strategy and the majority of the forced continuity offers that are being marketed today are being marketed off line. And most off line offers don’t come with an opt out option.
Merchants who mislead customers should be stopped, but that has nothing to do with forced continuity.
Anyway, if anyone here wants to get a free CD on how to use consequences effectively to raise your children, you better go right now to Child Discipline before my merchant account shuts me down.
Anthony Kane, MD
http://addadhdadvances.com
http://ccparenting.com
Anthony Kane January 14, 2010 at 2:13 pm
Does this mean that now I can get the swim suit issue without taking an entire year of Sports Illustrated? (et.al.)
Yes… Oh man, Anthony… nice!
(my subjective input)
Let’s face it, this does take place off-line and the on-line version have their
variables, indeed. I’d bet a good deal of us had taken up the $7.95 cd s&h offers,
only to jam in 30 free days of continuity review, thereafter to reach the merchant
account’s desk just in time to ‘cancel’ out of our commitment.
If the front-side (landing page) copy fully exposes the forced continuity fee, hence
the 30 days (or so)… then it appears to be totally legit and a great and fair marketing
practice. It, however, must retain total copy exposure and the fullest respect of its
cancellations upheld.
The mention of ‘optional’ Continuity is cute. Kind-of-like web 2.-0?… anyway, it
appears that ‘full exposure’ would justify an honorable mention for such
digital nomenclature.
And, what of Optional Continuity anyway?… Is this just another way to test the
system with an ‘optional’ way to apply forced continuity, until Visa/MC (who
made them the only bank cards anyway?) decides the these optional ways
don’t meet their standards?
mmmm,
Hopefully, we can address the forced (the m/cards reference to such as ‘negative
continuity’ seems a little wacky) continuity issue with some fairness in descriptive
laws issued by the merchant hierarchy, with full understanding of its applications
thereof.
It would seem futile to cut-loose, or otherwise shut-down a perfectly good and
if used with correctly, an acceptable and powerful marketing approach.
And, thanks to Nola for such reference to Capital One’s thoughts. One would think
that with reasonable offerings, along with openness within its copywriting, why not
just let the marketplace decide it’s viability…
If it is exposed properly, (ala) like ‘the new FTC testimonial laws’ – why not let the
market dictate forced continuity’s ultimate fate?!
best,
-Michael Lofton
mailto:michael@customercount.com
AND… Thanks Andy for the invite to comment with others!
m.
I have never liked the idea of forced continuity and I didn’t buy any products that were sold that way. Transparent is the word of the day.
Andy
Thanks for the useful info and link on the topic, certainly raises some issues for some operators out there.
As always those who operate honestly, transparently and with integrity shouldn’t have too much of an issue.
All the best
Tom
Heard about this just a little bit ago thanks to Michel Fortin on Twitter. I’m with you Andy…I think it’s fantastic! It’s about time we be more open and transparent. It’ll not only benefit the customers, it’ll benefit us as well!
I’ve been shopping online without incident since all Amazon sold was books (about 1995 for the yung-uns). That all changed in 2009 when I enrolled in a forced continuity program that billed $1 up front, then $29 in 14 days instead of the typical 30. There was no clear mention of that fact so I didn’t cancel in time. It was technically my bad, but this well known IM “guru” refused to refund my money.
I now go out of my way to make sure he isn’t involved in anything I’m considering buying. Extreme, I know but that’s what happens when you screw people over. They remember you…
Thanks for sharing this, Andy.
Tracy
I can say that I’m happy this has come about as I never was a fan of forced continuity, I always just saw it as another way to scam people. Just be honest and be up front with people.
Business is about serving the customer and building trust I believe is a major key so I agree Andy, keep it clean!
Thanks for the update. This is long overdue. I am both a customer and vendor, and am disgusted at the behaviour of most internet vendors, as most hide their forced continuity sign-ups in small print and bill a few days early and other self-interest tricks. In the outside world, like in leasing and mortgage and other recurring-charge situations, we have found it best to have full transparency, showing full respect for the customer and vendor both, with none of this trickery. Today I discontinued a respected $97 Forced-Continuity program and was told after some hassle that “Cancellations take about 72 work hours”. This translates to 9 work-days, which with 5 days in a work-week means 2 weeks!! Meantime the next $97 hit on my Visa card will happen in 6 days. I understand the need for recurring services with recurring payments, and they should be presented clearly, openly and honestly.
I’m a WOOOOOHOOOOO too on this. But isn’t it fun to see Mastercard folks taking a strong stand against using long explanatory pieces that might confuse the customer!?!
What caught my interest the most was in the letter below the video, where it read…
“cannot accept merchant applications for products and/or services employing “Negative Option” enrollment,IN ADDITION to the following practices:
>>>> “Cross-Selling” and “Up-selling” business practices.”
YIKES!
No up-selling?
“Do you want fries with that”? isn’t THAT upselling defined?
Obvious some changes need to be implemented but, that one is a doozie.
Am I the only one who is a little confused? Is this not how Stomper has been marketing their products for the past year? Don’t get me wrong, they are very clear about what you are getting however the issue is the same, no??
Scott
You might be Scott – Couple things – I’m no longer with StomperNet. In fact, I’m not marketing anything at the moment.
Second, while I think that there’s nothing wrong with Free Trials, the issue is about transparency. Most people don’t have any issue with auto-billing for a trial AS LONG AS THE COMPANY IS CLEAR ABOUT IT. And that’s the real issue. As long as the transparent folks remain transparent, they should be able to do whatever works. But until that happens, we’re going to have to deal with the good and the bad.
Stompernet has always marketed their products as a membership with a monthly fee. Andy may not mention it, but I remember Andy insisting that it be easy for people to refund. That the process be very clear and represented up front. And as you may find surprising, Andy was very, very passionate about it!
When Stompernet had problems in the past it was because the technology that was supposed to insure that sales, refunds, shipping etc were executed as planned, broke down under pressure.
If you know me, you’ll know that I believe 100% in the truth , and while Stompernet gets kicked in the nuts a lot, I know that any of the problems I saw happen, happened because programmers screwed up and Stompernet launched heavier than the technology could withstand. Never Malicious. Always with profit in mind. Always with the greater good of the Customer in mind.
As someone with some altitude IMHO…. It was more a problem of getting too big too fast than anything else.
Great article – If the consumer wins, we all win.
Thanks for pointing us towards Ryan’s excellent post.
Personally I agree that this is good news. It encourages transparency and it’s all part of the evolution of our industry.Always felt that forced continuity was a bit of a shady practice.
Phil
Never tried the forced continuity way of doing business, but it looks like I missed getting on the Titanic.