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Consumer

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Credit Card Fair Fee Act of 2009

by Smithee on July 3, 2009

in Consumer

Businesses are hoping to get more bargaining power when it comes to how much they are charged to accept credit and debit card purchases.

The Credit Card Fair Fee Act (read the whole bill), was reintroduced this year and is now being discussed in Congressional committees. I first heard about it when I was buying an emergency breakfast at one of the various 7-Elevens that are sprinkled on my way to work.

They had a binder of papers on the counter and were asking for people to sign their petition. It seems that groups like the National Restaurant Association feel the credit card companies are treating them unfairly with a lack of transparency in the way they do business and arbitrarily raising fees.

Convenience store owner Bruce Mitchell said his operation paid out more than $3 million in credit card fees last year.

“I am paying 25 percent more for credit card fees than I pay in wages,” he said.

Business owners say that these fees, and their frequent increases, are being passed along to consumers in the form of higher prices.

What do you think? Should the “free market” sort it out, or do credit card companies have too much power?

Small business pushes credit card reform, Susan R. Miller, South Florida Business Journal, June 8 2009

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Still Having Problems With TIAA-Cref? Tell Us Now

by Flexo on July 3, 2009

in Consumer

On July 20, TIAA-Cref will be holding its annual participant meeting. There is an effort underway to encourage the company to be more socially responsible and accountable to its customers, and representatives will be attending the meeting to bring any common problems directly to the board’s attention.

Are you having customer service problems with TIAA-Cref? Please see the instructions below. Here are my past notable experiences with the company.

In March 2006, I scheduled a transfer from ING Direct to create my first SEP IRA on April 7, leaving enough time for the account to be created before the tax deadline. I noticed the problem the day after the account should have been created. The company did not create the account nor did they deduct funds from my ING account. There was still a week before the tax deadline, so I was not yet up in arms.

By April 18, 2006, the TIAA-Cref account had been created but they still did not deduct my funds. This was after the tax deadline, so I was very concerned that the funds would not be attributed to my 2005 SEP IRA. I had difficulties getting the correct department on the phone.

My 2005 SEP IRA was not funded until April 28, 2006, and my level of concern was much higher. I spoke to an account representative who assured me that even though they were late, my money would be applied to 2005’s tax year and I would get April 7’s price for the investment. My account information online confirmed this.

Fast forward to January 2007. I received my received my tax forms from TIAA-Cref which indicated my SEP applied to the 2006 tax year. I did eventually have this issue resolved, but it surfaced only one week after I reported that thousands of people were having problems with TIAA-Cref. Customers could not access their money, didn’t receive their payments, and couldn’t get in touch with any customer service representative who could fix the problems.

The company acknowledged the problems and attributed the mishaps to implementation of a new computer system. This excuse carried on as the problems did for at least a year, with updated in March and June 2007. Even today, visitors are still voicing their concerns with TIAA-Cref in these comments this year.

Most people’s problems were a lot more frustrating than mine, involving restricted access to money and missing payments from the company. Although I think it may be too late, Neil Wollman, an author who has been following TIAA-Cref’s activities as a socially responsible company over the past twenty-five years, is looking to speak up for consumers at the company’s annual meeting later this month.

If you are currently having issues with TIAA-Cref that you have not been able to resolve by going through the normal channels, please let me know by commenting here using an email address where you can be reached or email me directly at flexo at this domain name. I will pass your information along to Mr. Wollman who will speak to the board of directors on your behalf.

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Do You Want RFID in Your Mobile Phone?

by Smithee on June 26, 2009

in Consumer

Håkan Djuphammar, VP of Systems Architecture for Ericsson, made a prediction recently that all new mobile phones sold after Summer 2010 would have two-way RFID chips in them that would allow them to act as a tag or a reader.

If what you just read sounds like technobabble, watch this short news excerpt to get up to speed. Even if you’re not interested in technology, you should learn about the possibilities and the dangers of RFID:

Back to the mobile phone: yes, it would be perfectly easy for all mobile phones on the planet to have an RFID tag/scanner in them. The possibilities for making use of RFID, like the numbering scheme itself, are practically endless. People in Asia use their mobile phones to buy drinks from vending machines all the time, and according to Djuphammar:

the chip might also be used by credit card companies to track the location of cardholders to cut down on fraud.

This was followed up on the Wired Magazine article about this story with a great user comment:

So, the myriad of privacy concerns aside, does this mean I won’t be able to use my credit card if I leave my phone at home?

RFID doesn’t inherently scare me. I already use one in the keyfob for my car when unlocking the door and starting the engine. It raises ethical concerns, and I think we should plan our next moves carefully. We don’t have a great history of moving carefully forward (people still drive without seatbelts all the time), which is one of the reasons I’m hoping you’ll educate yourself and your friends about this starting today.

If you have the means and the time, I highly recommend the book Everyware: the dawning age of ubiquitous computing, which not only details many possibilities for taking advantage of RFID, it also contains a great starting point for a positively ethical “post-PC” future (including some really neat new icons).

RFID-Enabled Phones Could Let Credit Card Companies Track Users, Kim Zetter, Wired Magazine, June 25, 2009

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The Family Smoking Prevention and Tobacco Control Act

by Smithee on June 23, 2009

in Consumer

A new law signed by the president yesterday gives the Food and Drug Administration the ability to regulate the tobacco industry. The primary focus of the law is to stop cigarette companies from aggressively marketing to children.

To that end, it will soon be illegal to:

  • sell candy-flavored and fruit-flavored cigarettes
  • put tobacco company logos on sporting, athletic or entertainment events or on clothing and other promotional items
  • place outdoor tobacco ads within 1,000 feet of schools and playgrounds

There are some other changes coming for all smokers, including adults:

  • tobacco companies will be prohibited from using terms such as “low tar,” “light” or “mild” – so-called light cigarettes make no difference to a smoker’s health
  • cigarette packages will carry larger warning labels, up to 50% of the surface of one side
  • depending on the results of upcoming FDA studies, tobacco companies may be required to reduce the amount of nicotine in cigarettes – nicotine is the strongly-addictive stimulant which makes cigarettes a logical part of the FDA’s oversight

To summarize: cigarettes, aside from the candy-flavored kind, aren’t going anywhere, though they may become less addictive.

Picture-5

Lawmakers have been trying to pass this legislation for over a decade. 70% of the House voted in favor, as well as 79% of the Senate.

And according to CNN:

Despite a significant decrease in the percentage of Americans who smoke in recent decades, more than 400,000 Americans still die from tobacco-related illnesses every year, the president noted. Tobacco-related health care costs exceed $100 billion annually.

Obama signs bill putting tobacco products under FDA oversight, CNN, June 22, 2009

Photo by isabel bloedwater

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Emotional Barriers to Negotiating and Haggling

by Flexo on June 22, 2009

in Consumer

It is in any consumer’s best interest to try to get the lowest price on all purchases, yet haggling, negotiating, or bargaining, at least in my culture, is not a social norm. Other than in specific situations such as buying a car that is not a “non-negotiable” brand like Saturn or Scion, haggling is uncommon. A few months ago, Smithee presented an article summarizing several tips for haggling.

If you look around the internet, you can find even more tips, sure to help readers on the path to getting what they want to buy at a price they want to pay. But most people won’t even get to the point where they can use these tips due to a number of emotional barriers.

Emotional barriers

The impressions of strangers. As haggling is not a “normal” social activity, someone who considers haggling might refrain for doing so for the fear of being seen as “abnormal.” Most retailers operate in public, so it is more than likely other people will be able to observe your purchases. Once you ask a salesperson in a retail electronics store, “What is the best price you can offer?” you might get stares from strangers.

What could they be thinking? She can’t afford to shop here. He is cheap. She thinks she deserves special treatment. He doesn’t know how to manage his money.

The opinions of strangers are irrelevant. It is simply in your best interest to buy what you want for the best price possible. The best way to bypass this barrier is to ignore everyone other than the salesperson, the sales manager, and yourself. As far as you are concerned, no one else is in the room.

Your self-image. One thing that might be preventing you from starting the dance of number-offering is the idea that the strangers might be right: you are cheap. If the item to be purchased is something you can legitimately afford, why bother haggling at all? People buy things they can’t afford every day without negotiating the price. Perhaps you think they should be the people haggling while those who can afford the purchase should be happy to pay full price.

The only reason your self-image is at stake is today’s culture. But if you would feel inadequate for trying to pay less than other people, take yourself out of the picture. Approach the negotiating as if you were speaking on someone else’s behalf or consider the purchase a business transaction where it is your reponsibility to your shareholders to achieve the best price.

Fear of rejection. This is the powerful force that stops awkward teenage boys from asking pretty young girls on dates. The word “no” is one of the most displeasing sounds to the human ear and brain, and people will try to avoid hearing it at all costs. The avoidance means that many important questions never get asked.

A great way to haggle without having to hear no is to ask the right questions. The right questions would never result in a yes or no answer. For example, try, “Considering this is a discontinued product and you’re making room for the new model, what is the lowest price I could pay for it?” rather than, “Can you do any better than that?”. And even if your line of questioning doesn’t result in any savings, at least you tried.

My haggling experience

My best haggling experience was about two years ago when I helped my girlfriend purchase a new television. We found a discontinued model of a standard-definition LCD television. We shopped around, and found the best prices and availability at the now bankrupt Circuit City. The store had two models left, one with a scratch on the side, one without. She didn’t want the scratched model, so negotiation would be a little more difficult.

We had the advantage, however, because we knew the store received the models a long time ago and would be interested in unloading them. The initial salesperson was not authorized to adjust the price, so we involved a manager early in the discussion. We asked to take away the television priced over $300, an already-discounted clearance price, for $200.

At this point, we were starting to attract a little attention. I don’t think strangers were judging us as cheap; they seemed to be curious about whether our negotiation would succeed. $100 off a clearance price was an aggressive discount, but the manager didn’t say no. He went behind the scenes and returned with a price sheet indicating the cost of each television to the store, and I assumed that the document was legitimate. The manager said he would let me have the television for 10% over the store’s cost, so we walked away with the television after paying $220 for a television originally priced more than twice that amount.

Perhaps it was this one incident that set Circuit City on the path towards bankruptcy.

Once you have overcome the emotional barriers to haggling, you will be ready to apply the tips and suggestions like these:

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The Cash for Clunkers Program

by Smithee on June 19, 2009

in Consumer

Yesterday the U.S. Senate passed a War funding appropriations bill that paradoxically included a piece of legislation popularly referred to as the “Cash for Clunkers” program.

In an earlier article where Flexo pointed out the weirdness of including “guns in national parks” legislation in a law about regulating the credit card industry, reader TJJ added a comment alerting us to the “Clunkers” program being inserted into the War funding bill. TJJ was right, and so here we are. Lawmakers attach irrelevant legislation as part of larger, more popular legislation.

So that’s the first thing that doesn’t thrill me about the Clunkers program. The second is the name. A “clunker” is a car that doesn’t work anymore. Yet, this program only applies to used cars that are still in drivable condition.

An actual clunker

Image of an actual clunker courtesy of Mike McCaffrey

More importantly, I think it offers too much for too little. There’s a $3,500 credit for trade-ins that improve your mileage by 4 MPG, and $4,500 for a 10 MPG upgrade.

I would’ve liked to see a program that required the new car to get at least 30 MPG, a number high enough to actually make some kind of impact on our dependence on foreign oil. Maybe I’m too accustomed to getting 45 MPG, but I view mileage over 30 as easily achievable with any kind of car, and it seems ridiculous to entice someone upgrading from, say, 14 MPG to 24 MPG.

So, much like the new energy efficiency tax credits, I think this is a case where if you were already considering trading in your car for something that requires fewer trips to the gas station, there’s never been a better time.

I’ve said it before, but here it is again: even if you don’t agree with a new law, if it makes sense for you to save some money under it, you might as well take advantage of it.

How the ‘cash-for-clunker’ plan would work,James R. Healey, USA TODAY, June 10, 2009

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Study: iPhone Users Are Younger, Richer and More Productive

by Flexo on June 16, 2009

in Consumer

According to a new study, employees who use iPhones are statistically wealthier, younger, and more productive at work that their counterparts who use other smartphones. 32,000 people were surveyed and placed into categories based on the type of mobile phone they own.

They were then evaluated based on income, the cost of their monthly cell phone bills, how often they use their phone access the internet, their age, and a number of other metrics.

According to the study, iPhone users are more likely to remain connected to their employers’ networks, leading researchers to conclude that this population is more productive.

Regardless, buying an iPhone won’t make you a better person, nor will it directly increase your income. I find it hard to believe that owning an iPhone, or any other device, would be a trigger to move an individual from one demographic (lazy, low-income, old) to another (productive, wealthy, young). The study only looks for correlations, so it could easily be that wealthy individuals are more likely to spend more money for a more expensive device.

Unfortunately, the details of the study are accessible only after paying $750, something I am not prepared to do for a survey that might not have any solid conclusions anyway.

iPhone

Photo credit: John Larsson
New study shows iPhone users to be in a class by themselves, Neil Hughes, Apple Insider, June 12, 2009
Working iPhone Owners Tap The Mobile Internet, Ted Schadler, Forrester, June 11, 2009

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Consumer Reports Exposes Cool Surge’s Misleading Claims

by Flexo on June 12, 2009

in Consumer

The Cool Surge portable air conditioner claims, in full-page newspaper advertisements that look like newspaper articles, to reduce the temperature of an average room by “up to ten degrees” using as much energy as a 60-watt lightbulb. Other air conditioners often use 500 watts or more, so it sounds like this device might be worth the cost that is double the price of a small window air conditioner.

Consumer Reports had difficult dealing with the company that sells the units. The organization’s testers had no problem ordering the units from the website for about $300 each, but when they attempted work with a customer service representative over the phone to order a unit, they ran into some problems.

But when we later called the Web site’s order line anonymously, we were told we’d have to pay $49 per unit for shipping, or nearly $100 if we had opted for the company’s two-for-one offer. Another call using a different number listed in a Cool Surge newspaper ad yielded yet another price of $148 per unit — plus $49 shipping — for versions with “slight cosmetic damages.” The two-for-one offer had apparently ended.

Furthermore, the testing revealed the air conditioner did not quite perform as expected. When Consumer Reports tested these claims listed above, they found that the Cool Surge cooled an average room, even in an environment most suited for success, by only two degrees.

Here is the video from Consumer Reports. [click to continue…]

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