As UnSeen On TV is a new website that promises to reveal “The Top Ten Facts Infomercials Fail to Tell You.” Exposing deceptive marketing practices, As UnSeen On TV is a wake-up call for the direct marketing community. In tough economic times, consumers are more reluctant to part with their hard-earned money, and most As Seen On TV products are not necessities. They won’t spend if they don’t trust the seller. If they do purchase, but then feel duped or get poor customer service, they won’t be back. As explained in As UnSeen On TV Fact #2, there are other ways to buy infomercial products.
Credit card giant Visa is placing restrictions on a marketing practice widely used by online merchants, and almost universally used by marketers of As Seen On TV (DRTV) products. This affects what is known within the industry as “loyalty” programs, where shoppers are offered a gift card or other financial incentive when completing their online order. From Visa’s press release:
The misleading practice, called “data pass,” usually involves a consumer shopping at a familiar retailer. At checkout, the consumer receives an offer for a discount or reward and does not realize it is from a different merchant and comes with unexpected monthly membership fees or recurring charges. Such deceptive marketing can result in high levels of consumer disputes and degrades the efficiency, reliability and security of the payment system. According to a 2009 U.S. Senate Commerce Committee staff report, 35 million consumers have paid $1.4 billion for “data pass” marketing offers (1).
“Visa’s priority is protecting our cardholders and the integrity of the electronic payments system. Consumers who shop online using their Visa cards should be confident that they will only be charged for the products and services they legitimately intend to purchase – not those that are foisted on them through deceptive data pass schemes,” said Martin Elliott, senior business leader, U.S. Payment System Risk, Visa Inc.
Visa’s rules already prohibit merchants from sharing a cardholder’s account number and other Visa transaction information with any entity that is not directly involved in completing the transaction, preventing fraud, or as required by law. To address the data pass practice, merchants will now have to prompt consumers to re-enter their card information to accept a subsequent offer from a third-party merchant. This provides a clear signal to cardholders that a second purchase is being initiated and protects them from questionable marketing practices.
Your Savvy Shopper applauds Visa’s action as a much needed step to buttress consumer confidence in online shopping.