FTC's Negative Option Marketing Workshop
I'll be making a presentation at the U.S. Federal Trade Commission's Negative Option Marketing Workshop on Thursday this week. Check their site for the presentations and proceedings. I'll be posting about it on Friday. The term is not in easy consumer currency, but what it means is that you, as a consumer, are agreeing in a transaction to give up or receive something, whether it's your money or your privacy or both, unless you tell the other party in the transaction you don't want to, or cancel the agreement later. If you've bought anything from a TV offer recently, via the given phone number or the Web site, you've probably had experience with a negative option.
Rules and regulations on this kind of marketing are sketchy. There's the usual array of individual states that have passed their own laws -- Michigan, for instance, is tougher on negative option marketing. There's good information here, though it's directed at companies.
If you're dealing with someone on the phone, or with a Web site, try to stiick to your original budget and don't be swayed by expensive add-ons. An oft-cited industry statistic is that only 15 percent of consumers will buy an add-on in a transaction if you ask them directly, so it makes much more sense not to do so -- this type of marketing (the preferred term in the publishing business, when signing people up for continued subscriptions, is "advance consent") is, as you might guess, lucrative.
Recently my 3-year-old daughter Olivia started hitting me up to buy "floam" (if your kids watch SpongeBob on Nickolodeon, chances are you've seen the ads). It's expensive stuff, but rather than call the phone number from the TV ad I decided to buy it from the floam Web site, which does a pretty good job of trying to talk you into other things (additional tubs, different colors, expensive expedited shipping). It may be tough to get all the way through the transaction, and others like it, without spending more. But it can be done, unless the particular company you are dealing with is dishonest -- in which case, the best recourse is through your credit card company.
By the way, there are a number of complaints on the Web about this stuff and the sales tactics, but my daughter plays with it for hours and my wife likes it too.
The FTC workshop is open to the public and open for comments as well. The comments are taken seriously -- for instance, I will be referring to one of them in my presentation. So it's not a waste of time to get involved and say what you think.