The Webloyalty Settlement: A Great Graphic Lesson in Marketing Practices

8/28/09Follow @bbuderi

Yesterday morning, Wade wrote a story about the recent settlement agreement in a class-action lawsuit involving Connecticut-based Webloyalty, which runs various discount programs offered to consumers as they wrap up e-commerce transactions. The case involved allegations that Webloyalty violated state and federal laws by failing to disclose some details about its offerings, such as the monthly charges that showed up on credit card bills after customers agreed to the programs. In some cases, customers said they didn’t even know they had signed up for a program at all.

Now, it’s important to note that Webloyalty has not admitted any wrongdoing. It maintains, in fact, as Wade wrote (I’m quoting Wade here, not Webloyalty): “that the details about its charges have always been clear in the fine print and in the follow-up e-mails it sends to subscribers…”

Wade’s story has more details on the case and settlement. But I’d like to flag one point that has to do with changes Webloyalty has made in the way it markets its programs. The company was very helpful to us in our reporting and provided a fascinating graphic detailing those changes. I found the graphic extremely instructive about how marketing programs work and the way words and placements might influence outcomes and perceptions. I think you will, too.

You can find it here, or just click on the thumbnail image accompanying this story.

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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  • Miramon

    “Clear in the fine print” my ass. And who the hell is going to read something probably marked as spam sent by a firm they don’t know they are doing business with?

    Seems to me a legitimate ecommerce company would have to be stupid to sign up with a “loyalty” firm that will be extracting money covertly from their customers. Can you imagine anything less likely to breed brand loyalty than the sense you have been screwed over?

    It doesn’t matter whether there is a revenue split of the hidden fees or not. The real e-commerce company must know that every last consumer who actually bothers to look at their credit card statement will go ballistic when they see these charges. And will they blame Webloyalty? No, they will blame the e-commerce company.

    If Webloyalty was making money from fees paid to it by the host company, there wouldn’t be a problem. But business practices like this, whether marginally legal or not, are clearly unethical. This no better than those “free ringtone” offers that used to subscribe customers to a monthly ringtone subscription service when the offer was accepted.

    When you boil away the attempts at legal buffering, what’s left is a hard kernel of fraud.

    “We will now bow our heads in payment.”

  • Leigh

    I, too, am a victim of this company through buying from Vistaprint. Stupid me ordered from Vistaprint for YEARS for different businesses, personal use using different credit cards..

    this scam goes back SIX years on SIX credit cards to a tune of more than $1,000!!!

    I reported this fraud and scam to 30 different state and federal organizations and NOT ONE responded… our MA AG’s office completely useless… won’t even return MY CALLS!!!

    IMHO consumers have NO rights, no protection and get NO response from these organization that were created to PROTECT US! BOOOOO!!!