My, how things have changed, and yet remained the same. Two decades ago, when the era of e-commerce was born, people fretted about online fraud and security—and that the Internet had too much porn.
Toward the end of 1994, MONEY magazine published a story about the sharp rise in consumers shopping from home. That year, some 98 million consumers made $60 billion worth of purchases from home, nearly all of it through phone orders prompted by mail catalogues and TV shopping channels. Another home-shopping option had suddenly arrived on the scene that year, too–an “on-line shopping service [that] requires a PC or Macintosh that’s equipped with a modem.” The article explained how such curious services worked:
For ordering, many of the “computer stores” offer shoppers an 800 telephone number to call. Others are set up so a shopper can click on a box next to the desired gift, type in payment information and the shipping address and then hit a “Submit Order” button. Some companies even let shoppers pick out the wrapping paper via computer.
That’s pretty much how people talked about e-commerce in 1994, when it was brand-spanking-new, not to mention weird, sorta scary, and totally unfamiliar to most consumers. American Public Media’s Marketplace noted that this week marks the 20th anniversary of online shopping, as chronicled in an August 1994 New York Times story describing how one shopper made history by purchasing a “compact audio disk” (a.k.a. a CD, which is how we used to listen to music before iPods, kids) by Sting—a transaction “celebrated as the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy.”
In honor of the big anniversary, we thought it would be fun to look back at how the birth of online shopping was viewed in 1994, a year before Amazon.com arrived. There was some skepticism, lots of confusion, and plenty of futuristic gee-whiz bluster about all of this “on-line” business. For instance, a headline in The Financial Post (Canada) described e-commerce as a “tele-shopping magical experience,” and the story that followed was a bit dismissive of “the latest fad.” An October ’94 Computerworld story pointed to the group of skeptics who categorized online shopping as just another component of the “infohypeway” that was the Internet.
Mostly, though, what’s amazing is that, in retrospect, so much of what was said and written in 1994 about online shopping was pretty much right on the money. From the get-go, many people realized that e-commerce would revolutionize shopping, by making it cheaper, more convenient, and more customizable than traditional shopping in physical stores. There were also tons of concerns about security, fraud, hackers, and porn, as well as predictions that as online shopping grew, advertising would absolutely ruin the Internet.
Without further ado, here are some of the funny, odd, and/or eerily prophetic ways people viewed online shopping 20 years ago, back when it was just a baby.
Online shopping was as hip as the Marlboro Man. An end-of-the-year article from USA Today featured a side-by-side list of trends that were In and Out for 1994. The Out side included no-longer cool stuff like faxes, Bud Light, Joe Camel, theme parks, and TV shopping, while the corresponding IN side listed the Internet, microbrews, Marlboro Man, casinos, and “on-line shopping.”
Everything had to be explained in (now) excruciatingly painful detail. A modem, a New York Times magazine story explained, was “a small device that sends and receives computer language over the telephone and does with computer files what a fax machine does with paper.” You need one of these to use the Internet and possibly buy stuff, you see.
People had no clue where or how to buy stuff. “One dirty little secret on the Internet is that nobody’s selling anything yet,” an executive at QVC told a publication called Network World. At the time, home-shopping networks like QVC were viewed as potentially huge players in online shopping. Few retailers had their own websites or Internet “pages,” as they were more often described, so they used services like the Internet Shopping Network—something of an “electronic home shopping mall,” as Reuters put it—to post items for sale. At the time, the Internet Shopping Network merely listed product descriptions, but the plan was to eventually feature product photos and “eventually, moving pictures of the items.”
Roland Bust, a marketing professor at Vanderbilt University, explained to the Atlanta Journal and Constitution that most consumers “don’t know where to go” when they attempted to shop online in 1994. “Like a real mall, a cyberspace mall has lots of stores, and finding a particular product can be hard unless a user knows which stores carry what,” the story summed up. Interestingly, the article also pointed to CD-ROMs as another online shopping option at the time. They sold for $8 and up, and when inserted into a computer, the consumer could access the contents of a couple dozen catalogues, from merchants like Spiegel and L.L. Bean.
There was plenty to be scared about—privacy, fraud, porn, and more. If you think your private information is easy for scammers and marketers to gather now, just think about the Internet circa 1994. The NYT magazine story regarded email as a “reasonably private written message.” The Mail on Sunday (London) warned consumers that purchase orders must be placed on the phone because “credit card numbers given down a computer are not yet safe from fraud.” Five of the 10 most popular “newsgroups” then on the Internet were “sexually oriented,” the Atlanta Journal and Constitution cautioned, and because free porn was easy to come by and the “Internet has more dirty jokes than the walls of a public bathroom,” there was cause for concern that unsuspecting web surfers and shoppers would be horrified with what they (or their children) found. ‘Just the title of some of the discussion groups is something you don’t want your kids to see,” the head of IBM’s Internet services said to the (London) Times.
It was assumed advertising would ruin everything. This now seems pretty laughable, but in the early ’90s, Internet culture was “decidedly uncommercial,” in the words of Computerworld. What was then a niche group of users wanted the Internet to be a place where ideas and information could be shared quickly and openly. But as such it was open to the possibility of “being hijacked by companies, which will flood the system with advertising,” according to the Times.
“Advertisers are looking for ways to exploit cyberspace,” the Atlanta Journal and Constitution stated. And many Internet users weren’t happy about it. So-called “commercial zones” were “created on the Internet for exclusive use by advertisers, but companies haven’t figured out how to get netsurfers to look at them. Efforts to plant ads in the network’s 2,500 newsgroups have caused an uproar.”
Another prophetic assumption: Online shopping would make stuff cheaper. “Selling goods electronically can be 40% to 50% cheaper than by conventional means,” Computerworld explained. Without the need for salespeople or even a physical sales space, it seemed inevitable that online shopping offered sellers a means to lower overhead costs—and therefore lower the prices charged to customers. “Nobody’s going to want to do electronic shopping if there’s no advantage to the customer—and that advantage is cost. You’ve got to save money,” Randy Adams, a serial entrepreneur who went on to co-found Funny or Die, told the San Jose Mercury News in 1994, when he was involved in an e-commerce startup. “I think conventional retailers are not going to like what we’re doing because we’re forcing margins down.”
Sure enough, they didn’t—and they still don’t like how e-retail giants like Amazon are pushing around the competition and product makers alike, usually with the idea of getting prices lower for the customer.
People saw the upsides of customization and convenience, too. Not only would online shopping make it possible to buy stuff 24/7, regardless of “store hours,” and without dealing with traffic or even leaving the house, but e-commerce also brought with it the opportunity to order far more than what one found on a store’s shelves. A 1994 USA Today story focused on the new concept of “made-to-order merchandising,” in which customers could order shoes, jeans, greeting cards, and more in the personalized style and size of their choosing. “The trend is the first step toward on-line shopping—when customers will use computers to order exactly what they want rather than going to a mall,” the article stated.
Overall, they knew online shopping would be a huge deal. “At some point it will be a really big business,” a UBS analyst said to Reuters in 1994. How big? Analysts told Computerworld that “on-line shopping could explode into a $5 billion sales channel in a few years.” In fact, when the Census bureau began tracking e-commerce sales in 2000, it reported that sales had hit $5.3 billion—in the fourth quarter of 1999 alone. Forecasts call for e-commerce sales to hit $304 billion in the U.S. for all of 2014.
The going rate for sex with a prostitute has plummeted in recent years, according to analysis from the Economist.
In 2006, the price for one hour of sex with a female prostitute averaged $340 around the globe. Today, the average rate is down to $260.
The Economist came up with this data after reviewing the online profiles and listings of 190,000 female sex workers in a total of 84 cities in 12 countries. There are several reasons cited for why the price of prostitution has fallen steadily in recent years, including the migration of poor sex workers into wealthier countries, which has pushed prices down. There’s also some indication that the increased availability of legal prostitution in countries such as Germany has put downward pressure on rates for paid sex.
Overall, the explanation for the decline in the price of sex boils to the same two factors that have affected so many other industries over the last decade or so: The responsibility (or blame, if you will) can be traced back to the Great Recession, and the rise of the Internet’s facilitation of virtually every aspect of life. “The fall in prices can be attributed in part to the 2007-8 financial crisis,” the Economist reported. “The increase in people selling sex online—where it is easier to be anonymous—has probably boosted local supply.”
Increased supply means increased competition, and lower prices in order to win customers’ business. This turn of events should put a smile on the face of folks like comedian Jim Norton, who wrote a stunning pro-paid-sex essay titled “In Defense of Johns” last week for TIME.com.
Naturally, sex workers are upset about the decline in asking prices for prostitution. An analysis by the Economist on all the different ways the Internet has impacted the oldest profession indicates that the shift online hasn’t been all bad for prostitutes, however. By being able to advertise and sell sex online, prostitutes don’t have to rely as much on brothels, pimps, or other intermediaries, so less of a sex worker’s money is going to a middleman. Selling sex on the web is certainly not safe, but it’s considered safer than streetwalking, partly because prostitutes can do rudimentary background checks on clients and share information about violent or abusive customers.
Generally speaking, however, it’s hard to come away after reading the Economist’s investigation and not be depressed. Here’s a group of workers who suffered mightily during the recession years and are still feeling its lingering effects. It’s more difficult to make a living in this trade than it has been in the past, what with clients who have less cash to spend and who have more, lower-priced options to choose from thanks to the Internet and other technology.
That description could be used to sum up the recent plight of many retail employees, travel agents, factory workers, or, heck, journalists. Instead, in this instance, it describes the situation facing women who feel forced to sell sex for money.
If you're having trouble understanding Amazon's battles against Disney and the Hachette Book Group, perhaps some wisdom from Jiminy Cricket, Wolverine, and Dr. Doom can clear things up.
In its storied, revolutionary history, Amazon.com hasn’t been hesitant to employ ruthless strategies in its quest to rule retail. The company’s tactics have been so tough that they’ve inspired consumer boycotts from time to time. Amazon’s latest skirmishes position the world’s largest e-retailer in standoffs against Hachette, a book publisher being pressured to lower its prices, and Disney, which failed to reach some contractual agreements with Amazon, and which is being punished by Amazon’s refusal to sell preorders of some of its movies.
We thought it would be helpful—or at least a heckuvalot more fun—to explain more about the ongoing disputes using classic quotes from Disney films and Marvel Comics, which Disney also owns.
“I just can’t wait to be king.”
These words, sung by Simba in Disney’s “The Lion King,” sum up the ambitions of Jeff Bezos and Amazon: The goal is to be the undisputed king of selling us stuff. As soon as possible, naturally. From one-click ordering to Amazon Prime, and from it forays into everything from groceries to a phone that encourages users to shop more at Amazon, it’s clear that Amazon wants to be the Everything Store—and to so thoroughly dominate the world of e-commerce that it essentially takes over the retail world.
In any attempted coup, the grab for money and power can be ugly. Often, the subjects aren’t happy with the policies and terms dictated by the new ruler, especially when they question the legitimacy of the king. In this case, Disney, Hachette, and others are the subjects that aren’t happy with how the self-appointed new ruler is trying to push them around.
“If your heart is in your dream, no request is too extreme.”
Jiminy Cricket said these words to Pinocchio, who dreamed of being a real boy. Amazon’s dream is different—to be the real boss of retail. To make Jeff Bezos’s wish come true, Amazon has been making some fairly extreme requests, including an insistence than Hachette cap its e-book prices at $9.99. Amazon is also using some extreme negotiating tactics in its standoff with Disney, notably making it difficult or impossible for customers to pre-order some of the company’s highly anticipated movies, including “Maleficent,” “Muppets Most Wanted,” and “Captain America: The Winter Soldier.”
“I am but a humble servant of my people!”
Amazon’s justification for playing hardball with movie companies and book publishers is that it is merely fulfilling its mission to serve its customers best, by way of figuring out how to offer them the absolute lowest prices possible. “We will never give up our fight for reasonable e-book prices,” Amazon said in a recent statement, regarding its ongoing dispute with Hachette. “We know making books more affordable is good for book culture.”
Oh, and where did the quote above about the “humble servant” business come from? It’s a line from Dr. Doom, who was constantly being stopped by the Fantastic Four in his life’s mission to take over the world.
Whenever the bad guys are doing something bad, Captain America calls his Avenger teammates to join together and put an end to the mayhem. Likewise, more than 900 authors have joined forces in a call to arms to stop Amazon’s attempt to break Hachette. “We feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want,” reads a statement signed by writers such as Stephen King and John Grisham that was published in a New York Times ad over the weekend. Among the other forces that are gathering allies and assembling for war: Google and Barnes & Noble, which teamed up last week in a direct attack on Amazon when they announced they would jointly offer same-day delivery of book purchases.
“With great power comes great responsibility.”
The famous wisdom of (Uncle) Ben Parker directed his nephew, Peter Parker (a.k.a. Spider-Man), to the path of righteousness. Critics say that Amazon is being irresponsible with the great power it now wields, and literature and the publishing world are among those being hurt as a result. In an open letter titled “If I Were Jeff Bezos” published last week on CNN, best-selling author James Patterson wrote that if he was the Amazon founder and CEO—the guy known for the “superhuman confidence of his laugh”—he would not be “so carried away with this success that I am going to lose sight of scale or sanity. Sure, I have ushered in the age of Internet commerce, but, no, I am not now hanging around just to collect my financial reward, or even to bask in the public recognition.”
And why not? “You see, I, Jeff Bezos, am actually trying to make this a better world … You think I want to be known as the man responsible for the biggest quality drought in the history of novel writing?”
“You give them an inch, they swim all over you.”
Retailers and manufacturers enter tough negotiations all the time behind closed doors; what’s unusual here is that these squabbles are repeatedly being fought out in the open, for all to see and judge. “It’s rare in physical retail to have contract disputes become so public. Most retailers just aren’t willing to hurt themselves by cutting off sales,” Forrester Research analyst Sucharita Mulpuru told the Wall Street Journal. “Amazon has demonstrated that they’re not going to be the one to blink in these negotiations.”
On the flip side, Disney and the book publishers don’t want to give an inch in negotiations. If they did, the fear is that Amazon would swim all over them, so to speak, in every future negotiation, to paraphrase Sebastian, the crab from “The Little Mermaid.” Sebastian was talking about teenagers, not power-hungry corporations, but you get the idea.
“There is a war coming. Are you sure you’re on the right side?”
Wolverine hadn’t really chosen a side yet when he said these words to Storm in the original “X-Men” movie. The typical consumer probably hasn’t chosen a side in the Amazon wars either. But essentially we’re all being asked to pick—more money and power for the seller (Amazon) or the producer and manufacturer (Disney, Hachette). By following the X-Men metaphor through, you’re siding with a mutant no matter which way you go.
It’s up to you to figure out which side is figuratively being led by Charles Xavier, and which is helmed by Magneto. And how do you decide? Let’s turn back to Jiminy Cricket for an answer: “Always let your conscience be your guide.”
When there are shark-themed donuts and cupcakes for sale, it becomes clear that the marketing of "Shark Week" and sharks in general has, well, jumped the shark.
The Discovery Channel’s “Shark Week” kicks off on Sunday, August 10, bringing the frenzy of interest in the fascinating creatures of the deep to all new heights. The annual event is a ratings bonanza, and a hot topic on social media, complete with its own prerequisite hashtag #sharkweek.
While there’s nothing stopping “Shark Week” from being fun, entertaining, and informative all at once, some experts in the field—of scientific research, not entertainment or marketing—feel like the circus surrounding sharks is overkill, perhaps even exploitive. “I’m kind of disappointed, and I think most researchers are, too,” George Burgess, director of the Florida Program for Shark Research, told USA Today. “It obviously is a big draw, but I’m afraid that the programs have gone more to entertainment and less to documentary over the years. It’s kind of a shame, because they have the opportunity to teach good stuff in what’s going on with science.”
The Discovery Channel is hardly the only party that’s guilty of playing to the lowest common denominator by focusing on “blood and gore or animals performing tricks,” as Burgess put it. And it’s hardly the only player out there trying to hook consumers’ attention (and dollars) by way of the shark.
Sharks—or more precisely, the fear of sharks—have a long history of helping to sell stuff. Movie tickets, for instance. Steven Spielberg’s “Jaws” not only kicked off the summer blockbuster as a phenomenon, but is also widely considered the biggest and best summer blockbuster film of all time. A series of sequels and other shark movies followed, as did the ever-expanding, factually questionable “Shark Week” on the Discovery Channel. In the so-called “Summer of the Shark,” in 2001 (mere weeks before 9/11, it’s often noted, when very different fears took over the American consciousness), unwarranted hype over shark attacks was used to sell magazines and keep viewers glued to 24/7 news channels, awaiting word of the next deadly aquatic encounter.
We’re still fascinated by sharks, and sharks are still being used to lure us into shops and TV shows and movies that we should probably know better than to watch. Lately, in an age dominated by memes and ironic-air-quotes “entertainment,” the cold-blooded mankiller of the deep has been replaced by an equally fictitious creature—the shark as adorable mascot.
This summer, “Shark Week” has been joined by the straight-to-cable arrival of the gag “movie” “Sharknado 2.” But given how much over-the-top goofball hype goes into “Shark Week” itself—Rob Lowe waterskiing atop two great whites anyone?—the Discovery Channel event seems to be its own best parody.
The merchandising of sharks and “Shark Week” has been, in a word, shark-tastic (the title of a book sold on the Discovery Channel, naturally). Among the roughly 150 items listed on the site as appropriate purchases for “Shark Week” celebration are shark kites, a Shark Week smartphone case, Shark Week bottle openers and coozies, “clever” shark T-shirts that say “Bite Me” and “I’m Hammered,” and Shark Week cupcakes that show Rob Lowe atop his pal sharks again.
Elsewhere in the ocean of summertime shark products, Dunkin’ Donuts is selling a Shark Bite Donut (the frosting resembles a life preserver), and Cold Stone Creamery has shark-themed cupcakes and ice cream sundaes, complete with colorful gummy sharks. Limited-edition “Shark Week”-inspired soap is available at one New York City boutique, while a “Shark Week” search at etsy turns up more than 1,300 hand puppets, pencil holders, custom-designed panties, pieces of jewelry, and other crafts. A whole other list of goods has been devoted to the frenzy around “Sharknado,” including a new perfume called “Shark by Tara,” created by one of the movie’s stars, Tara Reid.
The normally sober tacticians at Consumer Reports even got in on the action, using the Sharknado sequel as an excuse to run a review of chainsaws—the perfect weapon in the battle against sharks falling out of the sky.
Then there’s shark tourism. It might seem odd that any beach community would actively want to associate itself with sharks. Yet the effort to brand Chatham, Mass., the town on the elbow of Cape Cod—near plenty of seals and therefore sharks too—as something along the lines of the Shark Capital of America has been several years in the making. Starting in 2009, news spread that biologists were tagging great white sharks off the coast. Sure, it freaked some swimmers and boaters out, but it also drew the masses to the coast, bearing binoculars with the hope of spotting one of the beasts.
“The great white shark is sexy,” Lisa Franz, Chatham’s chamber of commerce chief, explained to the Boston Globe last summer. “Chatham as a town, I think, has embraced the whole shark concept,” she said. “As long as nobody gets hurt.”
Fast-forward a year, and the shark schlock business is booming. “Truthfully, we’ve probably grown about 500 percent in terms of the sale of our shark apparel,’’ one Chatham tourist shop owner offering “T-shirts, hoodies, hats, belts, dog collars and other accessories” featuring great whites for $10 to $45 told the Associated Press in June.
People seem to love the shark meme so much that local restaurants and shopkeepers understandably have a new fear: They’re scared about what would happen to business if the sharks suddenly went away.
Gmail made it easier than ever to unsubscribe from unwanted email lists sent by retailers that somehow got hold of your email address. So go on, unsubscribe. Marketers won't mind (much).
This week, a message posted by Google + explained that a change at Gmail makes it quicker and easier to unsubscribe from unwanted email lists. “Sometimes you end up subscribed to lists that are no longer relevant to you, and combing through an entire message looking for a way to unsubscribe is no fun,” the note stated. To simplify things and save users time, Gmail is now automatically putting an “Unsubscribe” button at the top of the email, just to the right of the sender’s email address. Click it and those annoying emails you’re tired of deleting will soon go away (in theory at least).
Google made the case that the “unsubscribe option easy to find is a win for everyone. For email senders, their mail is less likely to be marked as spam and for you, you can now say goodbye to sifting through an entire message for that one pesky link.”
Not everyone is viewing the change in quite the same win-win light, however. Adweek described the Unsubscribe button as potentially “a huge blow to email marketers” because making it easier for people to unsubscribe will naturally result in more people unsubscribing. That means fewer people getting the messages of retailers, activist groups, and others that are constantly seeking ways to bolster their ranks of email list subscribers.
So this is awful for the retailers that rely on such lists to spread the word about new products and deals and thereby boost sales, right? Well, not necessarily. One email marketing expert told InternetRetailer.com that there’s an upside to the change at Gmail. On the one hand, yes, putting the Unsubscribe option in a more prominent position will put the idea into the heads of more subscribers and cause subscriber numbers to shrink. But Chad White, lead research analyst at the email marketing firm ExactTarget, said that the people who will utilize the quick Unsubscribe option are problematic subscribers to begin with. They’re the consumers who are most likely to complain about the emails and/or the company, and they’re more apt to categorize the emails as spam. Reporting an email as spam to Gmail is worse for the sender than unsubscribing, as it damages the sender’s reputation in the eyes of email providers.
“While marketers don’t want people to unsubscribe, that may be a better option than them hitting delete without reading an e-mail or hitting the Spam button,” said White. “This is the least bad option because it doesn’t hurt the sender’s reputation.”
Gmail’s Unsubscribe option has actually been around, but flying under the radar, for a few months. It was only just this week that the company introduced and explained it in a big public way. The development follows the much more significant innovation at Gmail last summer, when the service introduced a system categorizing emails into separate boxes for one’s Social, Promotions, and Primary messages. Retailers and marketers worried (and still worry) that the system segregates Promotions into an easy-to-ignore folder.
Yet as with the Unsubscribe button, some think there is an upside to Gmail’s categorization system. When the Gmail categories were introduced, Forrester Research analyst Sucharita Mulpuru told us via email, “The segregation could actually be helpful because people can quickly scan in one place things that may/may not be relevant without having to hunt for personal emails in a sea of mixed clutter.” She also argued that the category system could help marketers reach a much more targeted audience, providing “a ‘destination’ for people that’s not unlike getting a pile of Sunday circulars.”
Now that it’s easier to unsubscribe, marketers can assume that the people who remain subscribed are more of a core group that find the messages relevant and appealing. In other words: They’re really great customers. “There are actually people who love marketing emails–that’s the reason they still stay subscribed to email lists in the first place,” said Mulpuru. “It’s very opt-in and self-selected.”
The brick-and-mortar retail giant is revamping its website in the hopes of dominating online commerce as well.
A startup is trying to brand itself as the Uber of medical marijuana delivery.
No fewer than 15 states offer a remarkably no-hassle way to trim a few percentage points off back-to-school purchases, most with deals starting this Friday.
Every year around this time, states host sales-tax holidays, in which the usual sales tax is waived on a wide range of purchases. In most cases, tax-free purchases are limited to back-to-school items such as computers and traditional school supplies like notebooks, protractors, and pens, but clothing, footwear, and accessories are typically on the table as well.
What’s more, the tax is waived on online purchases as well as sales in traditional brick-and-mortar stores, and there’s no actual requirement that the items being purchased are for back-to-school prep, or even for kids. It would be too hard to police any such requirement, so instead most states simply limit purchases to a flat dollar amount—for instance, any article of clothing priced at $100 or less, typically.
Let’s be honest: The savings represented by these events isn’t all that spectacular. Most participating states have sales tax rates of 4% to 6%, so that’s the extent of the savings. Big whoop, you might say. But when the tax holiday is combined with terrific sale prices—and virtually every retailer has back-to-school promotions going on right about now—the net amounts paid by shoppers can be true bargains. Why not get an extra 5% or whatever off what is already a good deal, on stuff you absolutely need to buy? To do so, all you have to do is wait a few days.
There are those who say that sales tax holidays are gimmicks for exactly the reason hinted at above. The argument is that the holidays don’t promote more spending as much as they encourage shoppers to strategically postpone spending, with no net increase in purchases whatsoever. What’s more, while sales tax holidays play well in terms of politics, critics say they are questionable at best in terms of local economic stimulus, and that they cost states and municipalities millions in much-needed revenues. States such as North Carolina have dropped their annual sales tax holiday tradition because of this argument, though shoppers did still get to take advantage of a “Better Than Tax Free” sales event at a North Carolina outlet mall last weekend.
Gimmick or not, if you need to buy any of the many, many items eligible for tax-free purchase, you might as well wait until Friday, or whenever your state has its sales tax holiday. Failure to do so is tantamount to unnecessarily paying an extra 6% or so.
Resources including Bankrate and the Federal Tax Administrators site list the basic details, and below are the states with sales tax holidays starting this weekend. Check the links for all of the fine print about what is and isn’t included in your neck of the woods.
Alabama: August 1-3, limited to $30 per book, $50 for school supplies, $100 on clothing, and $750 on computers
Florida: August 1-3, limited to school supplies of $15 or less, $100 per clothing article, and $750 for computers and accessories
Georgia: August 1-2, limited to $20 school supplies, clothing priced at $100 or less, and computers capped at $1,000
Iowa: August 1-2, limited to footwear and clothing priced up to $100
Louisiana: August 1-2, sales tax is waived on purchases of all items for personal (rather than business) use, priced up to $2,500.
Missouri: August 1-3, limited to school supplies of $50 per purchase, clothing and footwear priced up to $100 each, computer software up to $350, and computers or accessories up to $3,500
New Mexico: August 1-3, limited to school supplies up to $30 per item, clothing and footwear up to $100, computer hardware up to $500, and computers up to $1,000
Oklahoma: August 1-3, limited to clothing and footwear up to $100 per item
South Carolina: August 1-3, with sales tax exemptions for all clothing, footwear, school supplies, computers and electronics, college dorm supplies like pillows, blankets, and shower curtains, and even delivery charges on all of the above
Tennessee: August 1-3, limited to clothing, footwear, school and art supplies priced up to $100 each, as well as computers up to $1,500
Virginia: August 1-3, limited to school supplies up to $20, and clothing and footwear of $100 or less per item
And here are a few more states offering tax holidays a little later this summer:
Texas: August 8-10, limited to clothing, footwear, backpacks, and school supplies up to $100
Maryland: August 10-16, limited to clothing and footwear priced up to $100
Connecticut: August 17-23, limited to $300 on clothing and footwear
Massachusetts: Lawmakers in the Bay State have promised shoppers will get a tax-free weekend sometime in August, but they haven’t gotten around to settling on a date yet.
Verizon's new rewards program, which requires users to receive targeted ads if they want to get any benefits, is a case study for why you shouldn't sign up for every reward program on the planet
On July 24, Verizon rolls out a new program called Smart Rewards nationally. All customers who sign up as members—and, more important, who also enroll with Verizon Selects, a targeted advertising program—accumulate points for doing things like registering for paperless billing, autopaying their bills, and connecting a tablet to their account. Points are redeemable for things like retailer gift cards and perks such as the ability to “save up to 40% on brand name merchandise,” according to Verizon.
By now, we should all be well aware that there’s a tradeoff for membership in any such rewards program. Namely, that rewards come at the cost of giving up our data and privacy. Verizon’s program, while not all that different from many others in the marketplace, stands out because it’s especially invasive, allowing the bots to track members’ locations, web browsing history, and app usage, among other things. What’s more, the program’s rewards, which mainly consist of discounts on merchandise rather than cash back or discounts on, I don’t know, say, … your monthly Verizon bill! seem pretty lame.
So are the program’s meager benefits worth the sacrifice? We asked a few rewards program experts for their thoughts on the topic, and on the state of rewards programs in general. Here are some key takeaways consumers should think about before absentmindedly signing up for any old rewards program.
Rewards programs aren’t designed to reward you. “What’s most important to understand is that these are marketing programs,” said Jeff Blyskal, a senior editor at Consumer Reports who covers loyalty and reward programs. “They’re just another form of advertising. They’re designed to get you to spend more.”
That happens either when you spend more often because you’re a member, or you buy things you wouldn’t have after they’re brought to your attention—again because you’re a member—or both.
Forget the garbage about getting only ads you want. To consumers accustomed to being spammed with irrelevant ads, the idea of receiving deals and offers specifically tailored to your interests sounds appealing. While some targeted advertising efforts indeed seem, well, on target, the reality is that once the door is open, “you’re going to be pestered by all kinds of marketers,” said Blyskal. “And you’ll have no idea how exactly these companies and marketers got your information.” The result is that you’re likely to be bombarded by ads for products and services that you weren’t shopping for, and/or that you have no interest in whatsoever. And the result of that is increased annoyance, increased spending on stuff you otherwise wouldn’t have bought, or both.
The rewards are rarely as rewarding as promised. “Every program has more than one catch,” said Ramirez. Among the many catches are that the rewards are harder to use or less valuable than they seem at first glance, and that the “rewards” come in the form of discounts or “special offers” that are readily available elsewhere on the web, without the requirement of joining a rewards program. Verizon Smart Rewards, for instance, promises that members who are redeeming rewards points for discounts on merchandise are guaranteed that they’ll get the lowest price available; if not, they’re eligible for a refund of both the points used and the price difference on the item.
“They’ll say they have the guaranteed lowest price, but it’s up to you to shop around and make sure that’s true,” said Blyskal. “You’ve got to do the work. And we all know that you won’t do the work. As soon as you trust a marketing company, you’ve lost half the battle.”
It’s not easy to correlate points to dollars. The best rewards programs give members easily understood discounts or cash back on items that they’d be buying anyway. When you get a CVS receipt giving a flat $5 off your next $25 purchase, that’s a solid, comprehensible value. (There may be some other hassles involved, including the fact that the rewards may expire quickly, and that you’re apt to wind up buying something you wouldn’t have just because you’re trying to use the coupon, but those are different issues.) Likewise, consumers like the simple value provided by supermarket rewards programs that give discounts on gas based on the amount spent in stores. (Though this structure can also result in customers buying stuff they didn’t need in order to secure the discount.)
What’s truly frustrating are the rewards of undeterminable value because there are so many unknowns involved. Is $5 off a $25 gift card at a retailer you think of as a ripoff worth jumping at? Is 40% off a blender that you had no inkling to buy before seeing the offer a good deal? As Ramirez pointed out, “Verizon states in their FAQ that every point you earn has no monetary value.” Sometimes, the reward structure is so complicated that it may be best to not even bother wading into the fine print. “Sometimes there’s a fee involved to be a member, or for some other part of the program,” said Blyskal. “The benefits are hard to measure.”
“Sorting the worthwhile from the worthless can require time, effort, and an exhaustive (and expensive) amount of trial and error,” wrote Brad Wilson of BradsDeals.com in a post about rewards programs. “No one wants to toil away in a customer loyalty program that doesn’t effectively reward their loyalty.”
Working the system is harder than you think. “There are people out there who are really good at working these programs,” said Blyskal. “They look at them like games, like bingo.”
Being good at this game takes up a lot of time. In fact, some reformed extreme couponers (remember that craze?) have said that maximizing every little offer in order to snag every freebie or deal under the sun is, in fact, “a waste of time.”
To figure out which of the thousands of rewards programs out there are worthy of your membership, it’s necessary to look at oneself—and one’s spending inclinations—in the mirror. If you’re the type who wants to win at everything, and who therefore may be tempted to nonsensically spend hundreds of dollars in order to “win” $25 off, tons of rewards programs would absolutely love to have you as a member. Likewise, it may seem fun to regularly be presented with tempting random offers, but if you’re the type who frequently bites on such deals, rewards programs and targeted advertising schemes could be bad news for your bank account.
The key is to make sure that you’re working the rewards program, and not the other way around. Sign up for rewards programs when the benefits pay off in a clear and practical way, with rewards for things you would be buying even if the program didn’t exist. Don’t go overboard. Don’t buy all sorts of things you don’t need. Understand that with every rewards program, there’s a tradeoff for every little reward you receive. And understand that however rewarding the programs seem to you, they’re far more rewarding for the retailers that run them.