MONEY Advertising

The True Purpose of Heineken Light’s New Money-Back Guarantee

Heineken Light
Heineken

It's easy to make a promise when you're pretty sure no one will ever take you up on it.

Heineken Light just introduced quite an impressive-sounding guarantee, in which customers will get their money back if they think that it’s not the best-tasting light beer on the market.

The new guarantee is being promoted with a couple of commercials featuring Neil Patrick Harris. The humor in the one 15-second spot embedded below stems from the fact that Harris isn’t quite sure how anyone would actually get a refund.

“Not me, I won’t” give you your money back, the actor and Oscars host says in the commercial. “Someone will give you your…” he stammers and then stops, before clarifying, “someone at Heineken, I’m guessing,” while looking around bewildered. In other words, he has no clue how the money-back guarantee would work in real life. Ha!

If you’re interested, have a look at the ad yourself:

What’s funny in a different way about this commercial is that the ad brings to light how virtually no consumers understand the nitty-gritty of money-back guarantees—mainly because almost no one ever gets their money back from them.

It’s easy for Heineken to make this promise concerning its product, because people simply “won’t return the beer — too much hassle and humiliation,” Kit Yarrow, consumer psychologist and frequent Money.com contributor explained via email. “The whole point of the ad is to make a big statement about quality/taste — guarantees are one of the strongest possible ways to demonstrate confidence. Heineken cleverly reduced the ‘huckster’ quality of a money-back guarantee by adding a dribble of irony and self-mockery through Neil Patrick Harris’ delivery.”

Money-back guarantees have been around for decades. An old Journal of Retailing study succinctly sums up a few of the key reasons why stores and manufacturers roll them out, especially when it comes to newer, higher-end products:

Such a guarantee may increase a retailer’s profits. They may increase the sales volume by encouraging shoppers to try new products. In addition, they may allow the retailer to charge higher prices because the reduction in risk from the product’s being a poor match with their tastes may increase a consumer’s willingness to pay.

Overall, these guarantees tend to provide far more benefit to retailers than they do for consumers. They’re the “commercial equivalent of a date pulling out his or her wallet with no intention of paying,” as a colleague at Time.com once put it.

It’s not just retailers and product manufacturers that make use of money-back guarantees as a means to instill confidence and drum up business. A small Canadian newspaper just introduced a money-back guarantee for subscribers, while a pastor in Pennsylvania recently told his congregation that he’d be happy to give donations to the church back to anyone who doesn’t feel blessed.

“We’ve never had one person ask for their money back, which means that God is true to his word and that we’re seeing the blessings of God being poured out in people’s lives,” said the pastor, Robbie McLaughlin of Hope City Church in Harrisburg.

It’s hard to say how many people take companies up on their money-back guarantees because this information is rarely shared with the public, if it’s tracked at all. Walmart introduced a much-heralded fresh produce money-back guarantee in 2013. But as one retail insider noted, it’s somewhat of an empty promise, because the likelihood of anyone employing the guarantee for a refund is small: “How many customers are going to return to Walmart and stand in a customer service line to return a $3 produce item?”

Some money-back guarantees come with substantial fine print, as well as loopholes that can make it extra difficult to get your money back. For instance, a MousePrint.org study on the money-back guarantees highlighted how Federal Express’s promise was undercut by a line of fine print explaining the “guarantee can be suspended, modified or revoked at our sole discretion without prior notice to you.”

One of the best-known money-back guarantees comes from Hampton Hotels, which has had such a guarantee for more than a quarter-century, and which claims to have given away “millions of dollars in free room nights” over the years to guests who weren’t fully satisfied with their stays. Even with those refunds factored in, the company says the guarantee has been great for business. One reason is that most people with complaints “merely wanted the management to know about the problems,” according to a company press release celebrating the guarantee’s 25th anniversary, and they didn’t actually ask for their money back. Most importantly, the guarantee has served as “key driver of incremental business for the brand, with about 75 percent of all hotel guests aware of the offer and about half reporting that it has some influence on their hotel choice.”

MONEY credit cards

How Does Amazon’s New 5% Cash Back Card Measure Up?

Amazon Prime
Alamy

Amazon has a new store credit card that offers Amazon Prime members 5% back on qualifying purchases. But how does it compare to the competition?

Amazon and Synchrony Bank released a new credit card offer for Amazon Prime customers last week, offering 5% cash back on qualifying purchases and even promotional financing for orders over $149.

The store credit card is a credit product you may be familiar with at bricks-and-mortar retailers. Often, these cards offer a discount at sign-up, and promises of exclusive discounts or or coupons in the future. With the 5% cash-back offer on all purchases, is the new Prime card a good fit for frequent Amazon shoppers?

How This Card Works

Subscribers to Amazon’s Prime service are eligible to receive 5% cash back on qualifying Amazon.com purchases as a statement credit. Or, they can receive a variety of promotional finance offers. For example, cardholders will pay no interest on charges of $149 or more if the balance is paid in full within six months of purchase. Otherwise, the standard interest rate of 25.99% will apply. In addition, new applicants will receive an Amazon.com gift card loaded into their account instantly upon approval.

This card is offered by Synchrony Bank, and is not affiliated with any payment network, so it is only valid for purchases from Amazon. Applicants must be members of Amazon Prime, which costs $99 per year and includes free two-day shipping and access to their streaming video and music services. There is no annual fee for this card, but cardholders must be current Amazon Prime subscribers to receive the 5% discount or the promotional financing offers.

There are other store cards and credit cards that also allow you to save money on Amazon purchases. Here are a few offers so you can weigh your options.

Amazon.com Rewards Visa Card From Chase

Chase offers this card that earns 3% back for purchases from Amazon.com, 2% back at gas stations, restaurants and drugstores, and 1% back on all other purchases, and is accepted anywhere Visa is. New cardholders also receive a $30 Amazon.com gift card applied to their account at the time of approval. There is no annual fee for this card.

Sallie Mae MasterCard From Barclaycard

This card offers 5% cash back on the first $250 cardholders spend each month on gas and grocery purchases, and the first $750 spent each month on eligible book purchases. Interestingly, Amazon.com is coded as a book store, a legacy of their early origins as just a book retailer. Cardholders earn 1% cash back on all other purchases, and there is no annual fee for this card.

SimplyCash Business Card From American Express

Another strategy for getting discounts from Amazon purchases is to use Amazon gift cards, which can be purchased at some office supply stores. The SimplyCash Business Card from American Express offers 5% cash back for purchases at U.S. office supply stores and on wireless telephone services. It also features 3% cash back on a category of your choice including airlines, hotels, car rentals, gas stations, restaurants, advertising and shipping, and on all other purchases. There is no annual fee for this card.

Blue Cash Preferred Card From American Express

This card offers 6% cash back on up to $6,000 spent each year at U.S. supermarkets, which often sell gift cards for Amazon. In addition, this card offers 3% cash back for purchases from select U.S. department stores, and 1% cash back on all other purchases. There is a $75 annual fee for this card.

Before you apply for any credit card, it can be helpful to check your credit standing so you can target your search to credit cards that fall within your credit range. You can get two of your credit scores for free on Credit.com, and they’re updated every 30 days.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Shopping

Why Target Just Gave You a Year to Return Stuff

Exterior of Target store
Richard Clement—ZUMA Press, Inc./Alamy Humming again.

Target's newly generous return policy goes against industry trends, and it's inevitable that some shoppers will go overboard and abuse it. What is the company thinking?

Last week, Target announced it was extending the return policy on a wide range of merchandise to 365 days, a huge increase compared with the old 90-day return allowance.

The new policy doesn’t apply to all goods purchased at Target. Instead, the one-year window is valid on all 32 Target “owned and exclusive brands”—the stuff you can buy only at Target—including merchandise sold under names such as Archer Foods, C9 Champion, Cherokee, Liz Lange, Mossimo, Nate Berkus, Shaun White, and Wine Cube. The return policy for all items purchased as part of a Target gift registry (for babies, weddings, and such) has also been extended from 90 days to 365 days. And the liberal return period allowance for registry items commences on the day of the event, not the date of purchase.

While certainly more generous compared with most of its competitors, Target’s new return policy is not completely unheard of. “It’s a bit reminiscent of Costco’s liberal return policy,” Edgar Dworsky, a consumer advocate and the founder of Consumerworld.org, which publishes an annual retailer return policy report, said to the Minneapolis Star Tribune. “It certainly is an unusual move.”

Unusual indeed. During the same week that Target was rolling out its easier-than-ever return policy, Bed Bath & Beyond was following industry trends by making its policy less customer-friendly. As Consumerist.com noted, in the past Bed Bath & Beyond allowed all items purchased at the store to be returned for store credit or a direct exchange indefinitely, with or without a receipt—a “policy that most customers enjoyed and a few abused.” Now, however, when customers bring back items without a receipt, they’ll still be able to get store credit, but there will be a 20% deduction on the amount they receive.

[UPDATE/CORRECTION: Bed Bath & Beyond reached out to us to clarify that its new return policy takes effect on April 20, 2015, and that it “will only affect customers whose purchase cannot be located to process a return, either because the receipt was not provided or because we could not identify the purchase through a query of our transaction records.”]

In recent years, other retailers once renowned for incredibly generous return policies have felt forced to tighten up restrictions due to the abuse by a small percentage of customers. For instance, Bloomingdale’s and REI have ratcheted up return policies, partly because of the extreme behavior of a few rotten shoppers. Some people had the gall to return counterfeit goods purchased on the black market overseas to REI, while others referred to the retailer as “Rental Equipment Inc.” because they used backpacks, tents, and other gear for years and turned them in for new models once they were worn out.

Retailers say they’ve also been compelled to tweak return policies because of a certain subspecies of “returnaholic” shoppers known for engaging in the practice of “wardrobing.” This is the name when you buy something—typically clothing or accessories—wear it to some special event while hiding the fact that the price tag is still attached, and then return it afterward.

At a discussion of Target’s new return policy over at the industry publication Retail Wire, one retail insider noted that the company was all but asking for “wardrobing” and other kinds of abuse to take place:

I expect Target will get flooded with returns as a result of this policy—especially by Millennials who want to rent rather than own. Upscale retailers have had to limit the returns of expensive dresses because women would wear them for one night and return them using the store’s liberal return policy.

So what’s behind Target’s change to a more flexible, potentially abused return policy? The short answer is that shoppers buy more stuff when they know returns are easy.

“People are more likely to purchase impulsively with the assurance of a liberal return policy,” says consumer psychologist Kit Yarrow, author of Decoding the New Consumer Mind and a frequent contributor to Money.com. “In stores like Target, impulse purchases are essential to their financial health.”

In the past, Yarrow has explained that a good return policy is critical when a retailer is trying to foster a long-lasting, trusting relationship with the customer. “Psychologically, a liberal return policy unconsciously communicates confidence in the products being sold,” she says. “With trust in businesses at abysmal levels, this is key.”

It’s been a long time since Target was known as “Tarjhay,” the “cheap chic” darling of the industry. By pushing the return policy to new levels of flexibility and generosity, Target is also pushing its reputation upscale. “Better return policies will help to elevate and classy-up the brand image–which is now more on par with Walmart whereas once it was edging up toward Macy’s,” says Yarrow.

Yarrow also points out that the retail experience today is riddled with potential headaches, so one easy way to set your company apart from the pack is by removing annoyances. “Retailers are typically focused on adding positives–what consumers really want is fewer negatives,” she says. “Hassle reduction is the new route to consumer happiness.”

MONEY identity theft

Target to Pay $10 Million Settlement in Data Breach Lawsuit

Target has agreed to pay $10 million in a proposed settlement to the customers who lost money in that 2013 hack.

MONEY Shopping

5 Makeup Names Just As Tasteless As “Underage Red”

Red lipstick on lips
Getty Images

The lipstick that has sparked controversy among Sephora customers doesn't stand alone in its tastelessness

Consumers are voicing outrage on Twitter about a new shade of lipstick sold by Sephora under the Kat Von D label.

Critics have said that the color, called “Underage Red,” sexualizes young girls and trivializes pedophilia. The lipstick line already includes a rosy hue called “Lolita.”

This isn’t the first time Kat Von D has made headlines for a makeup name: Back in 2013, Sephora pulled a lipstick from the line called “Celebutard” after customers complained.

But the brand is not alone in applying objectionable names to cosmetics. MAC also offers a peach lipgloss called “Underage,” and several other companies are guilty of labeling makeup with offensive phrases. Here are five other examples that are—or were—equally terrible. Most, fortunately, seem to have been discontinued.

1. “Miso Happy With This Color” by OPI

Puns that tacitly support an extremely tired stereotype about how Asian people speak? Offensive.

2. “I’m Not Really A Whore” by Naughty Nailz

So much for celebrating womanhood. Even among other polishes named “Dirty Slut,” “Nympho,” “Trophy Wife,” and “Gold Digger,” this one stood out as particularly self-loathing. It doesn’t even have a retro ring to it, like “Brazen Hussy.”

3. “What’s A Tire Jack?” by OPI

According to the copywriter assigned to describe this tire-black color, it “speaks to rule-breaking feminine drama”—whatever that means. What it sounds like is another lame joke about women being bad with tools.

4. “Give Me Moor” by OPI

Clearly whoever named this shade skipped Othello in high school English, or else he or she would have realized it’s in poor taste to name a dark nail polish hue with an old racial slur.

5. “Iris I Was Thinner” by OPI

Just what women and teens need: A reminder that it’s “normal” to hate your body. And let’s not even get into the grammatical error.

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Get Free Ice Cream and Italian Ices this Week

10 Supposedly Irish Things that Aren’t Remotely Irish

TIME psychology

This Is Why You Overshop in Ikea

We take you through the popular furniture and home goods store to show you how the layout affects your buying habits

It’s easy to overshop. But at Ikea, it’s almost impossible not to spend more than you originally budgeted.

That’s because the Swedish furniture retailer designs its stores to trigger impulse purchases while making it difficult for shoppers to make a mad dash for the exits. It’s a way to take advantage of Americans’ changing shopping habits, which TIME’s Josh Sanburn detailed in this week’s magazine.

Our current phase of overconsumption began about 30 years ago, when Americans began committing close to half of their annual expenditures to nonnecessities. It was the beginning of a gradual decline in the cost of consumer goods, the growth of everyday credit-card use and the rise of big-box stores and discount retailers that pushed their way into communities nationwide, forcing down prices and profits for those competing around them.

In the past decade, the cost of cell phones, toys, computers and televisions has plunged, thanks in part to overseas manufacturing. The rise of “fast fashion”–popularized by the growth of clothing outlets like Gap, Forever 21 and American Eagle selling $10 T-shirts and $30 jeans–is now driven by low-cost imports H&M and Uniqlo. Today the average U.S. household has about 248 garments and 29 pairs of shoes. It purchases, on average, 64 pieces of clothing and seven pairs of shoes annually, at a total cost of $1,141 a year, or $16 per item.

“When the question is why do we have so much stuff, one reason is because we can,” says Annie Leonard, executive director of the environmental group Greenpeace USA and the creator of The Story of Stuff, an animated video about excessive consumerism. “For a huge percentage of this country, there is no longer an economic obstacle to having the illusion of luxury. It’s just that this stuff is so cheap.”

Watch the video above to go inside one Ikea store in Brooklyn and see how its strategy works, and read more here.

Read next: My House Is Ground Zero in the Clutter Wars

Listen to the most important stories of the day.

MONEY

Is Daylight Saving Time a Conspiracy to Get You to Spend More Money?

150306_EM_Daylight_1
Klaus Vedfelt/Getty Images

Businesses have special reason to love when there seems to be more time in the day to shop, play golf, dine out, and take advantage of added sunlight.

At 2 a.m. on Sunday morning, an hour of time will disappear in most of the country. Daylight saving time will kick in, and when the clock hits 2 a.m. it’ll instantly be 3 a.m. instead.

The sudden change can have some strange effects. In Ohio, for instance, bars have been ordered to close 30 minutes earlier than usual in the wee hours of Sunday morning. Normally, establishments authorized to sell alcohol in the state have last call at 2:30 a.m., but because of the time shift, there is no 2:30 a.m. that night, and bars therefore must simply shut down at 2.

In Washington, D.C., meanwhile, the Alcohol Beverage Regulation Administration has announced that bars and nightclubs will “automatically gain an additional hour to sell and serve alcoholic beverages between 3 a.m. and 4 a.m. on the morning of Sunday, March 8.” In previous years, D.C. bars had to apply for permission and pay $200 to stay open an “extra” hour when daylight saving time kicked in.

Beyond the quirks, the impact of daylight saving time might seem to be little more than feeling groggy due to a lost hour of sleep. Researchers have noted other negative effects, however, such as increased heart attacks because people get less sleep when we “spring forward.” Likewise, some data suggests that on the Monday after daylight saving time (so, March 9 this year), there are more traffic accidents, again because people aren’t as well rested and have slower reaction times than usual.

Daylight saving time also has a big impact on the economy. When days are longer—or rather, when they seem longer due to extended daylight—people tend to spend more money on everything from tourism and recreation to shopping and restaurants.

The golf industry, which has suffered from declining popularity for years, is “the most important reason we’re still doing and expanding the period of daylight saving time,” Michael Downing, a Tufts University professor and author of Spring Forward: The Annual Madness of Daylight Saving Time, explained on public radio a year ago. Downing also said that one of the original arguments for daylight saving time—it would save energy and money—is just plain false today:

We’re told we’re saving energy, but when Americans go outside and go to the park and go to the mall, we don’t walk—we get in our cars and drive. So for the past 100 years, the dirty secret is daylight saving increases gasoline consumption.

In any event, try to catch up on sleep as soon as you can after daylight saving time takes effect. And by all means take advantage of the opportunities that this period’s “longer” days provide. Just understand that you’re paying for it.

MONEY Odd Spending

Snuggie Maker to Pay $8 Million Over Customer Complaints

The makers of popular “as seen on TV” items like the Snuggie have agreed to an $8 million settlement over deceptive business practices.

MONEY Shopping

Miami Megamall Would Be the Biggest in the U.S.

The developers behind Minnesota’s Mall of America want to build an even larger shopping attraction in Florida.

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