Many Happy Returns

Unlike 2021, the due date for U.S. tax returns was back to mid-April this year.  Most of us sweated under the ticking clock as we combed through statements and receipts in search of last-minute tax breaks. I have this recurring pipe dream where the IRS tells me to just keep what I owe (followed by the dream of how I would spend the money). Sadly, I’m a taxpayer who rarely sees a refund, and keeping what I owe certainly won’t happen. On the other hand, retailers could soon be asking me to keep what I want to return.  Now there’s something to ponder.

Picture this.  You place an Amazon order for a brand new Playstation 5.  You plunk down the $500 it costs and a few days later your purchase shows up on your doorstep.  But while you were waiting for your gaming console the IRS sent you a reminder about the balance due on your 2021 taxes. Whoops. You owe that $500 to the federal government, young taxpayer.  Hello, buyer’s remorse.  Full of regret, you contact Amazon to arrange the return, and their carefully worded response goes like this:

Dear Amazon Prime Member.  Thank you for your inquiry into the return of your Playstation 5 gaming console.  After reviewing our current stock we have determined it is not necessary for you to return this product.  Accordingly, nothing further is required at this time.  You can expect a full refund applied to the credit card used to make this purchase.  Thank you for shopping with Amazon.

Wait… keep the product AND get a refund, you say? Crazy, I know. Or maybe not, at least if you shop at Target or Wal*Mart.  Both retailers are considering this no-return approach with clothes, garden furniture, and “bulky” kids’ toys among other products they currently overstock.  It’s the result of consecutive worldwide events.  First, the pandemic, which allowed consumers to build up their savings accounts while mostly staying at home.  Second, record-setting inflation, which dragged a knife through what was supposed to be a post-pandemic spending frenzy.  Retailers stocked up early in anticipation of the purchase party, but then the lights and music were abruptly cut off.  The result: overstocked with a capital “O”.

This version of keep-the-product-keep-the-cash kinda-sorta happened to me years ago.  My sister-in-law ordered a ping-pong table for her family and when it came, they discovered a bit of damage in one corner.  So she contacted the company, who told her, “Keep it.  We’ll just send you another one.”  Thus, in a moment labeled “Christmas not on Christmas”, my family got a free ping-pong table (Thanks, Sis!) Sure, the bounce of the ball was a little off on that one corner, but my kids didn’t care.  Besides, before I knew it they were old enough (or not) to drink and pretty much destroyed the table when they shifted to beer pong.

But I digress. With a ping-pong table I’m almost sure the cost of shipping back to the manufacturer was more than the profit after fixing and reselling it.  So my sister-in-law got two tables for the price of one.  Hey, what if she’d bought ten ping-pong tables and all of them were defective?  She’d go up and down her street handing out free tables.  She’d gain a bunch of new best friends and her neighborhood would hold massive ping-pong tournaments.  All for the cost of one table.

The problem at Target and Wal*Mart is more than just the cost of returns and overstocked items.  It’s also, they can’t charge the same price they charged you.  For one, the item may be offered at a discounted price by the time you return it.  For two, certain items have to be classified as “used” and can’t be offered at full price after the first purchase, or even offered at all.

“Un-resellable”

Which brings me to orange juice.  Orange juice, you ask?  Yep.  Try to return a jug of juice to the market some time.  We bought five jugs a couple of months ago for our daughter’s bridal shower, assuming the mimosas would flow like Niagara Falls. Wrong. Only a few of the guests opted for the bubbly since the shower was mid-day.  So I called my local market to confirm the return of four unopened jugs of juice, and was horrified to hear, “Sure, you can return them for a full refund.  But we’ll just throw out the juice.” Throw out the juice?  Yes, it’s the world we live in these days.  Many food items cannot be resold for fear of tainting.  So I’m drinking a lot of orange juice right now.

Let’s wrap this public service announcement with a caveat.  One of these days you’ll be pleasantly surprised when you end up with a purchased product AND a full refund.  Lucky you – it’s “Christmas not on Christmas”!  If it’s through Amazon, however, be wary of the following purchases: hazardous materials, gift cards, jewelry, groceries, and live insects (uh, live insects?) None of those can ever be returned, nor will you get your money back.  In other words, the sea monkeys you adopted in a moment of nostalgia (remember those, Boomers?) should be considered bought and paid for.  No refunds.

Some content sourced from the CNN Business article, “Just keep your returns…”, and the Clark.com article, “12 Items That Can’t Be Returned to Amazon”.

Manipulation Games

In April of last year Starbucks modified its customer loyalty program, linking reward “stars” to dollars spent instead of store visits. Where previously you nabbed a free coffee for twelve trips to the cash register, you now need a total purchase value exceeding $63 .  According to CNN, “…customers were furious with the new program.”  Maybe so but those customers didn’t stay away either.  Starbucks’ 2016 gross sales were $21.3B, up 10% from its previous fiscal year.

Once upon a time I resisted customer rewards programs but over the years I’ve made peace with them.  I keep a couple dozen loyalty cards in the car or on my phone, ready to play whenever I visit this store or that restaurant.  I still control where, what, and how much I purchase.  Since I don’t keep a close eye on my rewards, I’m pleasantly surprised whenever I qualify for a freebie or a discount.

But here’s what I don’t like about rewards programs.  They’re designed to manipulate your spending habits.  That’s where Starbucks – like so many other merchants – gets a “fail” on my customer satisfaction test.  In addition to their stars program Starbucks sends emails every other day (which I unsubscribe from but always seem to return).  Those emails encourage me to purchase in certain ways or quantities or timeframes with the allure of “bonus” stars.  It’s a ruse; plain and simple and obvious.  No amount of “free” will ever tempt me to buy three breakfast sandwiches in five days.  Or three Frappuccino’s in three days.  (I don’ t even buy one breakfast sandwich or one Frappuccino.  Just coffee.)

Starbucks may annoy me with their sales tactics but I still buy their products.  The same cannot be said for credit card companies.  The newest Visa and MasterCard programs include sophisticated reward programs where spending is literally the only path out of debt.  Take Chase Bank’s Sapphire Reserve Visa card.  As trendy as this elegantly thin metal card appears to be, it’s utterly manipulative.  For starters, just holding the card in your hand sets you back $450 a year.  Then you’re encouraged to spend $4,000 in the first three months to qualify for 100,000 reward points (recently sliced to 50,000).  You’re also tempted by an instant $300 travel credit – which can only be used through Chase’s partners – as well as credits towards Global Entry, TSA Pre, and airline lounge fees.

No matter how you justify the rewards of Chase Sapphire Reserve you’re still spend-spend-a-spending to recoup the costs.  Consider Sapphire points are valued at 2.1 cents each.  The best-case scenario therefore – spending on travel or dining – still needs to add up to $15,000 before you’ve paid off the $450 annual fee.  Too rich for me.

Las Vegas is getting in on the rewards game too.  Sin City’s legendary “free drink” is about to enter the history books.  Slot machines now include small colored lights, easy to spot by the passing cocktail waitress.  If you’re “red” she’ll walk right past you without so much as a smile.  If you’re “green” you’ve fed your machine enough to earn a “free” drink.  The same goes for casino parking lots; spend enough inside the building and you’ll earn a voucher for outside.  Is it any wonder gambling is no longer the biggest source of revenue in Las Vegas (in favor of hotel, restaurant, and bar purchases)?

Despite these trends, I’ll keep playing the rewards game and very occasionally cashing in on anything “free”.  But I’ll also be wary of the subtle manipulations.  Just yesterday I received my umpteenth Southwest Airlines’ Visa card offer.  All I must do is spend $2,000 in three months for 50,000 points and no annual fee.  That application goes straight to the shredder every time.  My one and only Visa card with its no-frills-no-cost rewards program suits me just fine.

 

Steal a Card, Any Card

Imagine a carefree Saturday at the mall. You’re shopping with friends for something you really need, or maybe it’s just a little retail therapy. Whatever the reason, the shopping and the purchases make for an enjoyable afternoon. In fact, you’re so satisfied you decide to add on dinner afterwards at a nearby restaurant. All in all a great day, until you wake up the next morning and discover a fraudulent purchase on your credit card. Even more disturbing, you realize the waiter at the restaurant was the odds-on criminal.

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My mall story is not hypothetical but actual. My family and I went shopping last weekend, and within twenty-four hours of our purchases we were victims of credit card fraud. What is most aggravating to me is the basic chain of events that points to the nefarious waiter at the restaurant where we dined. Why him? Out of a dozen purchases that day, the restaurant was the only location where the credit card transaction took place out of my sight. Instead of the several point-of-sale mall transactions, the restaurant – as is typical – carried my card away alongside the bill, to be processed somewhere out of sight.  Also, the fraudulent purchase the following day was made at the department store adjacent to the restaurant.  It’s an easy-as-pie theory on what went down.

My experience begs the question: why do credit card companies include all of the critical information right on the card?  Write down (or phone-photo) the name of the cardholder, the sixteen-digit card number, the expiration date of the card, and the three-digit “Card Verification Value” (CVV), and you’re all set to assume the purchasing identity of someone else.

Google Authenticator, which sends a verification code to your phone that is required for login to certain apps, creates a secondary level of security that would significantly decrease credit card fraud. At the least, cardholders should be given a piece of data separate from what is printed on the card, so only they have every last piece of the purchasing puzzle.

Fortunately, credit card fraud is an inconvenience instead of an unexpected financial setback. My bank simply reimburses the amount in dispute, cancels the card, and issues me a new one. I can live with that (unless I owned the credit card company). What I can’t live with is the thieves who work the system. Thus did I send a note to the restaurant manager. I did not directly accuse the waiter as I really have no proof.  But I did provide enough detail that perhaps the manager will track the activities of his employees a little closer. My hope is that he discovers the criminal among his otherwise trustworthy staff.

Go On, Take the Money and Run

If you buy e-books through Amazon, you’re familiar with the option “send a free sample”.  Rather than buying the book up front, Amazon sends the first 5% to your e-reader as a teaser.  The sample cuts off abruptly (sometimes mid-sentence), but you get enough of a taste to decide whether you want to commit to the purchase or simply walk away.

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Free samples are a genius sales tactics (think Costco), but I say free samples are saving graces for an often mediocre world.

Mediocre.  It means you experienced something run-of-the-mill or commonplace.  Think about the last food item you purchased.  Would you say it was deliciousLike nothing you’ve ever tasted before?  Would you rush back and buy another one?  Probably not.  Yet you ate the whole thing even though the first bite screamed “meh”.  Why did you do that?

Here’s a better example.  How often are you at the movies and twenty minutes into the film you start to wonder if it’s going to get any better.  You become more interested in your surroundings than what’s up on the screen.  For me, the first red flag is when I suddenly double-check my pockets for my wallet and car keys.

Sometimes you see people get up and leave in the middle of a movie – the bold ones.  Do you leave?  Chances are you don’t.  You finish out the show, turn to the person you came with and say, “ah, it was just okay”.  Again, why did you do that?  You could’ve been gone almost two hours ago and salvaged the evening by doing something better!

I think we should apply Amazon’s “first 5%” to more of life’s experiences.  At the movies, why don’t they flash a little question mark in the corner of the screen fifteen minutes in.  If you’re not into the film you get up and leave at that moment, and the theater refunds you 20% of the ticket price.  Sure they might have to charge a little more to offset the loss, but guess what?  Movie producers would track the “leave” statistics and make better films.

The other night I saw the Harlem Globetrotters, an act I hadn’t seen since childhood.  They’re not as entertaining as they used to be.  The basketball is still impressive, but the slapstick comedy is dated, and the focus seems to be as much about their charity and the products they’re selling as it is about the show itself.  Again, the “first 5%” rule says you decide within the first fifteen minutes whether to stay or go, and you get a 20% refund on your ticket.  And, that ticket could be handed off to another line of patrons, who would then watch your remaining 80% for free (and probably buy enough concessions and products to offset the refund).

We’re in an election year.  You may consider your choices for President mediocre.  No problem.  The “first 5%” rule says the winner has 75 days to make good on those “when I get in office” promises.  If he/she comes up short, the Vice-President (or even more interesting, the runner-up) takes over and also gets a 75-days shot.  Sure, I’m making the early months in office more demanding and the election process more complicated.  But at least the VP would no longer be a figurehead.  And you the voter would no longer feel like your “purchase” of the next four years demands a refund.