Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by FruGal, a consultant for a prominent online educational program.

From the time I was a little girl, I can remember making regular trips to my local library. The sights, smells, and sounds are still with me as if it were yesterday. It’s all still fresh in my mind – everything from climbing up the dark, cobweb filled stairwell in the old building in town, to wandering aimlessly throughout the shelves, trying to find a R.L. Stine horror novel that would keep me up late at night, reading in bed with a flashlight.

Fast-forward twenty something years, and you’ll still find me at my local library. However, I’m immersed in an experience that has been completely transformed from what it was decades ago. Long gone are your old-fashioned, wooden card catalogues to help guide you through the endless shelves of books, and other more traditional fixtures of the public library. Today’s modern library is truly an infinite supply of resources, knowledge, entertainment, and more. And best of all, it’s all completely free!

I could talk for hours upon hours about the different services and materials that are available to you at your local library, which chances are, is probably only miles from your home. However, for the interest of this post, I’ll be highlighting my favorite things you can find at your library today.

I’ll get started with the “what” of the library. Books, DVD’s, and CD’s are definitely at the top of my list. Next time you think about heading to your nearby bookstore, or paying the exorbitant cost of going to the movies (plus popcorn, a drink, etc.), consider heading out to the library. The library is home to an endless wealth of new (and old) releases that are available to community members such as you. I visit my local library about once a week, usually on the weekends, and pick up a wide variety of materials that are of interest to me. Take DVD’s for example. At the library, you’ll have everything from blockbuster comedies that just came out of the theater, to documentaries from around the world. You can even find materials such as Audiobooks, which are great for long drives, or perhaps to share with a friend or family member who, for whatever reason, may not be able to read.

Now, let’s explore the “how”. Your local library has an online catalogue system, called an Online Public Access Catalogue (or OPAC) which has replaced your traditional card catalogue. Within the OPAC, you can search through your library’s inventory of multi-media resources. But to take it a step further, you have the ability to reserve items through the system. This is as simple as securing your library card number, which is located on the back of your card, and establishing a pin if you don’t have one already. If you need help, a library staff member will surely lend a helping hand. Once you’re logged in to the online system, you can search for, and place a hold on the latest and greatest books, DVD, and CD titles, plus lots more. At my library, I can place a hold on up to 15 items at a time, and I’m simply sent an email when my request has been filled. The library has a system where materials are transferred from one branch to another for your convenience. With less popular or older items, you’ll only have to wait a few days, whereas with new releases, it may be a few weeks. Either way, if you keep your “hold” list full, you’ll constantly have a wide variety of materials ready to be picked up and enjoyed. Or, if you choose, you can simply wander the shelves and discover whatever may catch your interest.

Last but not least, let’s talk about the “why”. With today’s economy, every penny really does matter. If you add up the total of just one book, one CD, and one trip to the movies, it’s probably around $50.00 or more. To me, it’s much more practical to take advantage of a free (and fun) resource that so many people have tapped into. Plus, it truly is an enjoyable experience. The other day while I was leaving the library, I smiled as I glanced through the glass that peeked into the children’s area, and a father was sitting in a miniature chair, reading to his son. While the library is constantly changing and evolving, some things never change – which is a good thing.

With this all being said, as a lover of books, I realize that there are some must-haves for your collection. I’m not saying completed deprive yourself of these items, but rather, make an effort to be more conscious in your spending habits. Also, I would be remiss if I didn’t mention how you can help the library. After all, it’s done so much for you. Consider becoming a “friend” of your local library, which could include anything from helping to raise funds through book sales, or shelving books. More information about this can be found on your library’s website, or by inquiring in person.

Phew, all this and I’ve barely touched the surface! The library is home to special events, classes, story time for children, author talks, arts and crafts… need I go on? I’ll guess I’ll have to save the rest for another time. For now, if you aren’t already, I encourage you to visit your library and explore the many opportunities that are available to you, as well as your family. I guarantee you won’t be disappointed AND you’ll have some extra money in the bank.

I’d love to hear from Consumerism Commentary readers about your experiences with the local library. How often do you visit? What are your favorite materials?

This is a guest article by FruGal, one of six finalists interested in being Consumerism Commentary’s staff writer.

Photo credit: (Erik)

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Living It Up… At the Library?

Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by VCMcGuire, a regular contributor to the New York Times and other publications.

I hate shopping. A lot. I have been known to buy the wrong thing, for the wrong price, just to get out of the store.

Buying gifts is the worst. Here’s what happens on a typical shopping trip before Christmas. I’m standing in a store, holding something in my hand, and I’m thinking, “Will this book/sweater/candle show my grandma/father/spouse how much I love them? Do I really know them well enough to know what they will like?”

This is followed closely by another glance at the price tag, and the realization that this month’s credit card bill is going to be bigger than our mortgage payment. Right about then, somebody usually starts hanging on my arm and asking if we can please buy a soft pretzel now, Mom?

That’s when I either convince myself that my father will love that shade of fuschia, or I walk out of the store empty-handed.

Thank god for online shopping. I can do it at home. I can find the best price. In most cases I can find the perfect color and size. And by spending a few extra minutes, I can often get a pretty good discount on my purchase. My goal is to get a discount big enough to cover the shipping charges.

I do this by using a third-party cash back site to get a rebate. I’m a member of several rebate sites, and most of the online stores I buy from participate in at least one of these programs.

But how can you find out whether, say, Macys.com, participates in any rebate programs?

I use a site called Ev’Reward. (Flexo reviewed Ev’Reward back in 2006.) This site lets you plug in the name of a store and find coupons, or rebate sites that will give you a kickback. Online coupons consist of a code you can enter before you buy, and your savings are instantaneous. Rewards sites usually require you to sign up for an account, then click through from their site to the retailer. Once you have accounts with a few rewards sites, though, this is pretty fast. The downside is you have to wait to get your rebate–usually about 90 days from the date of purchase. This gives the retailer time to make sure you’re not going to return your purchase.

I’ve tried a number of rewards programs, and I’ve got my list narrowed down to about four that I use on a regular basis. I don’t participate in any rewards programs that cost money to join. And I don’t use any of my travel reward accounts for this purpose. I get miles and hotel points when I travel, but I would rather have cash money as a rebate for shopping, not miles or points.

Here are my favorite rewards sites, and a summary of their advantages.

• Fat Wallet. Unlike most of its competitors, Fat Wallet has no minimum balance before you can withdraw your money. You still have to wait a couple months for the rebates to clear in their system, but then you can request to be reimbursed through Paypal. The site has a lot of other good features, like a thriving discussion board for bargain hunters, that make it worth a longer visit.
• Mr. Rebates. This site often has the highest rebates for specific merchants. Recently, the minimum withdrawal was lowered to $10, making Mr. Rebates more attractive. This site also has the best referral program. You don’t get anything when you initially refer a friend, but you get 20% of all their rebates for as long as they’re members. If you refer a few big-time online shoppers, you can earn a steady trickle of passive income.
• Ebates. Ebates also has relatively high rebates compared to other sites. Another plus is that they automatically send your rebates quarterly once you reach the $10 minimum pay-out. That means you don’t have to remember to come back and request to be paid. Ebates also has a referral program. When you refer a friend and the friend makes a purchase through Ebates, you get a $5 bonus, but there’s no ongoing kickback for your friend’s future purchases. I recently bought a bunch of school uniforms for my kindergartener from JCPenney.com, and got 3% back from Ebates.
• Upromise. This site’s kickbacks for online shopping are usually much lower than the other 3 I’ve mentioned, but it’s worth signing up anyway. You can register grocery store rewards cards with Upromise, and get a few cents in your Upromise account when you buy selected products. You can ask friends and family to sign up for Upromise accounts, naming your kid as a beneficiary, although some of my relatives were understandably skeeved out by the idea of letting yet another company track and analyze their spending. The rebates accumulate in your Upromise account until you roll them into a 529 college savings plan. We all know college is wicked expensive, so every little bit helps. I’ve been participating in Upromise for a few years now, and I’ve saved a few hundred dollars–enough to pay for a single textbook. Maybe.

So, with the holidays approaching, I’m looking forward to avoiding the malls and getting rebates on all my gift purchases.

I’ve probably missed some good rewards sites, and I know there are other sites besides Ev’Reward for looking up online discounts. What are your favorites?

Don’t forget to check out these recent Consumerism Commentary guest posts on couponing and smart holiday spending for more ideas.

This is a guest article by VCMcGuire, one of six finalists interested in being Consumerism Commentary’s staff writer.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

How To Do Your Holiday Shopping Through Rebate Sites

The Credit CARD Act of 2009 instructed the Federal Reserve to enact new regulations for gift cards. I have a love/hate relationship with gift cards; they’re convenient gifts to give when you know the recipient is a fan of a certain store. Unfortunately, the past few years have seen restrictions added to gift cards which make them unappealing. Some gift cards expire if not used within a certain amount of time, rendering the money spent to buy the card worthless. Some gift cards come with a monthly fee or an inactivity fee.

It makes more sense to simply give cash rather than a gift card, eliminating the third-parties like stores and payment processors and eliminating any limitations to its use. This avoids the issue of whether fees should be charged for these products. But some people consider the gift of cash inappropriate, more than those who consider the gift of gift cards inappropriate. Thus, the Congress and now the Federal Reserve wants to protect those who choose to buy and those who receive gift cards.

The new regulations call for an elimination of inactivity fees (until the card has been inactive for a year) and eliminations of fees for balance inquiries and transactions. All of the changes to gift cards by law do not need to be made effective until August 22, 2010.

The Federal Reserve is preparing to accept comments from the public for thirty days. You can read the full proposed regulation and in the next few days, you can begin to submit your comments to the Fed here. (Look for Regulation E, R-1377.) Here are some questions to consider as you formulate your comments:

• Are these restrictions necessary when consumers can easily choose not to purchase gift cards?
• Would better disclosure be better than restricting fees?
• There is a cost to offering gift cards; how should stores pay for those expenses if not with fees?
• Should all gift card fees be eliminated, so gift cards are as good as cash in all cases?
• Why wait until August 22? Can the new regulations be implemented sooner?

Photo credit: _rockinfree

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Federal Reserve Wants Your Opinion About Gift Card Fees

Over the next couple of weeks, six finalists will be auditioning for the opening of “staff writer” at Consumerism Commentary. Each will be providing two guest articles to share with readers. After the six writers have shared their guest articles, readers will have an opportunity to provide feedback before we select the staff writer.

This article is presented by Kelly Whalen, a mostly stay-at-home mom who writes about personal finance at The Centsible Life.

News that the recession may be over has many retailers hoping that American consumers will open their purses and wallets and spend more this holiday season.

Frugality has been popular during the recession, so retailers are targeting your frugal side to make sales. This holiday season will see a rash of new promotions and coupons aimed at your frugal side.

Several retailers are starting to offer “Pre-Black Friday” deals. Amazon.com for instance offered several electronics deals on November 7th. Even upscale retailers such a Pottery Barn are offering more items with free shipping, and a larger selection of sale items to draw more consumers. While many retailers, like Crate & Barrel, have free shipping on purchases over a certain dollar amount. Crate and Barrel’s offer is free shipping on orders over $100 between Oct. 15 and Dec. 22, 2009.

Despite the draw of deals, most Americans will be spending less this year on holiday gift giving. Of those I informally polled, no one said they would be spending more than they had in the past, and the majority of people had 3 methods for reducing spending this year:

1. Shorten the list: Shopping for fewer people topped the list of ways to reduce holiday spending. Co-workers, hostess gifts, and other small gifts can really add up.
2. Handmade gifts: Most people will understand your budget is a tight, and would rather have your award winning brownies than $20 worth of too pretty to use speciality soaps.
3. Smarter spending: The best way to save money this holiday season (and year round) is to spend smart. I’ll share 10 ways you can be giving this holiday season without sacrificing your savings.

10 ways to spend smarter

I’ll share my top 10 ways I shop smarter, which are helpful for the holiday season and beyond.

1. Make a list whenever you leave the house. Make a list, check it twice, don’t leave home without it!
2. Use coupons and discounts, but only for things you need. Coupons are a great way to save money, but look for coupon codes or discounts for things that are on your list. You are NOT saving money spending on things that you don’t need.
3. Create a “sale mail” email account. Set up an email account and sign up for emails from your favorite or most frequently shopped stores. Ignore it unless you are shopping, and check it before you make a purchase.
4. Plan ahead for big purchases. Use this list as a guideline to find the best time of year to purchase most goods.
5. Eat before you shop. Pack snacks or a meal if you will be out for a long time. Make sure to pack water as well. This not only saves money when food shopping, but also when you are doing other types of shopping as well!
6. Choose quality over quantity. Use Consumer Reports, or other reviews to find a product that will last you longer than a cheap one.
7. Institute a waiting period. Whether it’s a 30 day waiting period for larger purchases or a day long waiting period for small purchases, a waiting period is a great way to control your budget.
8. Use your budget. Shop within your means. Simple, I know but difficult for some people (including me) to practice.
9. Look online before you buy. Knowing the price of something online saves you time (no running from store to store), and you can guarantee you’ll know the cheapest price. Many stores offer price matching, so it’s a great incentive to spend 5-10 minutes searching the web.
10. Don’t be afraid to bargain. Flexo had success bargaining, and saved $85 on a computer. It may seem difficult to do, but it’s worth trying, and could save you a ton of cash.

What’s your holiday budget this year? What ways do you save on holiday shopping?

To keep track of deals online for the holiday season, keep track of current Black Friday Deals at black-friday.net and find out about free shipping day, or find free shipping deals on freeshipping.org.

This is a guest article by Kelly Whalen, one of six finalists interested in being Consumerism Commentary’s staff writer.

Photo credit: stevendepolo

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

How to Spend Smarter This Holiday Season

I have been looking forward to replacing my Blackberry 8830 World Edition for several months now. The phone, even with ample extended memory, is sluggish and does not have the same capabilities other modern phones have.

With the release of the Motorola Droid, I decided this was a good opportunity to upgrade. On my way home from work on Friday I stopped by the Verizon Wireless store, confirmed I was happy with the phone, and walked out of the store with my purchase including some accessories.

It was an expensive evening, but I’m happy with the purchase so far. The good news is I’ll be paying less per month for a while. But here’s a breakdown of what it would cost to own a Motorola Droid on Verizon Wireless.

The first thing you will notice is the price of the phone. If you start or re-start a two-year contract with Verizon Wireless, the phone costs $299.99 with a $100 rebate available. If you buy the phone in person, you will have to send in your receipt to receive the rebate in the form of a debit card, but if you buy the phone online, the rebate is instant. I also had my “New Every Two” rebate, reducing my cost by $50.

The phone comes with a regular charger but if you want a car charger, Verizon sells the necessary micro USB charger for $29.99 in the store but you can find less expensive options are available on Amazon.com. Verizon also wants you to buy a multimedia docking station. I did not find this necessary, but I did buy the car mount, $29.99 at the store. The navigation features on the Droid rival the best GPS devices, and the car mount makes those features convenient.

The cheapest monthly plan at Verizon Wireless is $39.99 for unlimited nighttime and weekend minutes and 450 anytime (any other time) minutes, but any “smartphone” requires a data plan in addition to the voice plan, so you’ll pay another $29.99. At this time, using the cell phone as a computer modem is not supported on the Droid. I did have “tethering” with the BlackBerry, so I will be saving $30 per month by canceling this feature until Verizon offers it on the Droid early next year.

Verizon Wireless wants to ensure that Droid users don’t abandon the network before the end of their contract. Phones are sold at a loss by the company with the expectation that they will make back the cost of the phone, and profit, through monthly fees. Full retail price of the phone is $559.99. To protect itself further, and to encourage customers to purchase sooner rather than later, on November 15 Verizon will be doubling the early termination fee on for Droid purchasers to $350 from $175. This fee drops by $10 every month of the contract, but it is still a gutsy move when early termination fees have already been judged illegal in California.

Total cost of owning a Motorola Droid on Verizon Wireless

Assuming you don’t go over your minute allowance, here is what buying a Droid could cost you.

You’ll pay more if you want more accessories, like the multimedia dock or a Bluetooth headset. Many of the applications you can install on the phone require a small fee, and some, like the visual voicemail app, disappointingly carry a monthly charge. However, Google Voice is a good, free option, and it integrates seamlessly with the Droid. There are many other useful apps that are free.

So far I like the Droid. It is a major improvement over the BlackBerry 8830. For those who like AT&T, check out the true cost of the iPhone 3G.

Photo credit: allaboutgeorge

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The True Cost of a Motorola Droid

This is an editorial by Smithee and a plea for your help in shaping the future of entertainment.

At our house, we enjoy some Hulu programming on occasion. Even though during the recent DVR years I’ve become accustomed to skipping commercials, I don’t mind them on Hulu, for these reasons:

1. I’ve only seen one per commercial break
2. They haven’t been suddenly, obnoxiously loud
3. Hulu is free, and so advertising makes sense

And so far, there’s no ability to skip them. I can deal with that, because in an episode of, say, “Defying Gravity” on Hulu, there are five commercial breaks, for a total of five minutes of Lipitor commercials (at first, every episode would play five of the same Lipitor commercial, it was almost funny). I can accept five minutes. That means about 9.6% of a 43-minute show is an ad. That’s fine, so long as the service is free.

But that is going to change sometime in 2010. Hulu is owned by NewsCorp (who owns roughly half of everything), and they have decided:

It’s time to start getting paid for broadcast content online. I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value. Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business

Anything more specific than this decision is just speculation: subscriptions for what, everything? premium channels only? groups of channels? Nobody knows.

What I propose is unacceptable is this: a subscription fee for any user, for any content, so long as the advertising remains part of the experience. In other words: unskippable ads are no problem, subscription fees for any content are no problem, but both together would be a problem.

You and I have a chance right now to help influence and inform Hulu’s decision to go forward with a subscription model, before we let ourselves get duped.

Sadly, we’ve been letting ourselves get duped for a long time.

Newspapers, Cable TV, mobile phones

Newspapers are filled with advertisements, and they also expect you to pay for each copy. The same is true of magazines. In fact you could argue that any fashion magazine is just one huge multi-part advertisement. So, I don’t read them. Oh, I look at the news online all the time, but between my banner-blindness and various browser plugins, it’s not often I see an advertisement.

TV is a different story. TV used to be just like radio: the good parts were ad-supported, and you also had a station that relied on member subscriptions. Cable messed that all up, and we were too busy with the colorful new channels to notice. A cable company would set up shop in your town and tell you all about the dozens of extra options you’d get for $X / month. We were totally psyched to get MTV and Nickelodeon at our house, but it didn’t occur to me until later than since the cable company replaced our over-the-air channels, we were now paying for something that used to be free. Thirteen free somethings, in fact (UHF was admittedly pretty empty).

There’s an argument that in the case of OTA / broadcast channels, what you’re paying the cable company for is consistent quality of signal. I’d be happy to see some proof of that, in the form of a cable company’s accounting spreadsheet. I’m sure that NBC is charging the cable companies regional monopolies a fee to include their programming, and cable is passing that cost on to the customer.

The mobile phone business model just depresses me whenever I think of it. Here’s how a phone worked since the time it was invented: if you called someone, you were expected to pay for it, but if someone called you, it was free. This makes total sense: the phone call recipient didn’t intend to have that conversation, he or she isn’t really responsible. Besides that, this seemed to work very well for decades, and phone companies never changed it. That is, until we were tooling around town with phones in our pockets and cars. Since it was new and fancy, providers decided to invent a different business model: you’d be paying for calls now whether you started it or not.

As far as I know, mobile phone companies have never had to justify this to their customers en masse.

AOL vs. World of Warcraft

Remember those CDs of AOL software? They were everywhere. It seemed like you’d get a new version in your mailbox every three months, especially if you weren’t even a customer. They were free, because AOL’s business model was a monthly fee for access, content, and software upgrades. And AOL did fine for a long time.

Everquest came along and messed that all up, charging both a monthly fee and an upfront fee for the software, and now WoW players suffer the same fate. You’re paying the company twice for the same things they were going to be doing anyway. What is wrong with us? Why do we enable companies to use more than one business model at a time?

Advertising is a replacement for subscriptions

And vice versa: subscriptions are a replacement for advertising. Advertising is one business model, and subscriptions are another. Employing both for the same product is unacceptable.

I’d like to ask for your help now in spreading this message to the managers at Hulu, so they understand the intelligent way to move forward is to either saddle us with a recurring fee and remove the commercials, or leave the commercials in an otherwise free service.

On Hulu’s discussion forum, there are already many threads decrying the decision to start charging. You could try adding your own voice there, or e-mailing feedback@hulu.com. Another less elegant method would be to add an irrelevant comment on one of the entries at the official Hulu blog. In my experience, site owners are more likely to read blog comments than they are discussion forums, but your mileage may vary.

Hulu’s Free Glory Days Are Official Numbered, John Herrman, Gizmodo, Oct. 22 2009

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Hulu and the Subscription Model

Depending on how you get your news, the topic of network neutrality can seem boring, or confusing, or both. Possibly you haven’t yet heard about it, or you’ve already formed an opinion. The reports I see are too often complicated, lacking reasoned arguments and full of hyperbolic guesses as to what the future might hold. Not to mention that both supporters and critics say that their side is the one promoting “freedom”. I’ve read all the boringly-written PDFs about the FCC’s new guidelines for you, and here’s what it means.

Same as it is now

Enacting an official policy of network neutrality means that the Internet you use now will not change. Broadband providers have ideas about limiting access to some content for customers who don’t pay as much, or aren’t on their networks.

As the specific FCC guideline is written:

broadband providers cannot discriminate against particular Internet content or applications

Without Net Neutrality

For example, imagine if you needed to be a Verizon FiOS subscriber in order to access www.startrek.com. Star Trek fans who didn’t have FiOS would throw a fit (those same Star Trek fans might recall this actually happened on AOL many years ago). As an alternative, the owners of www.startrek.com work out a deal with the other big broadband companies and they say, “okay, fine, you can have access to it, but your broadband bill will be $5 more per month”. Meanwhile, FiOS subscribers aren’t paying $5 a month for the Web site. Sound fair?

Here’s another made-up example of a world without net neutrality: you have AT&T broadband at home, and a Sprint mobile phone through work. Your company uses Google Apps, but AT&T decides they don’t like Google, so you can’t get to your work e-mail from home. Does that sound like a good idea to you? If you’re against that idea, then you are in favor of net neutrality.

No reason for prices to change

The Internet was built by a bunch of nerdy scientists to be open and accessible to everyone. It isn’t free, because moving data requires paying people to do various jobs. At my house, we’re paying about $60 / month for some very fast Internet. Critics of net neutrality claim that “new rules” will force providers to raise prices. But remember, neutrality is what we have now, as it’s been regulated by the FCC in the past on a case-by-case basis, so there’s no logical reason to raise prices for anyone. Besides, $60 a month is almost highway robbery as it is.

Internet providers charge more for faster speeds, and less for slower speeds. Critics of neutrality want to invent new ways to charge people in addition to this one simple rule.

Regarding congestion and illegal activities

The FCC’s published guidelines (they’re just getting started writing the actual rules), make exceptions that give Internet providers the ability to manage network congestion and prevent illegal activities. So if you’re on cable, and you’ve got neighbors downloading (and uploading) 68 gigabytes of Star Trek movies, providers can find a way to stop your speeds from being negatively affected. The new rules do not prevent throttling, and they do not encourage illegal activities.

Avoiding an ugly fight

I’m speculating here, but ensuring network neutrality will also mean side-stepping huge Public Relations nightmares for broadband companies. I think a provider has the right to consider limiting access to certain content or applications, and I think it would be massively stupid of them to go through with it. Millions of people would be instantly enraged.

Back when you needed to be an AOL subscriber to access www.startrek.com, they got complaint after complaint, and it was less than a year before access was returned to everyone. Why would anyone want to go through with that again?

Preserving a Free and Open Internet, at the FCC’s OpenInternet.gov web site (which is accessible to everyone)

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Net Neutrality Simplified

In addition to Sony’s and Amazon’s electronic bookstores (about 100,000 and 330,000 titles available, respectively), booksellers now have another huge option for getting their books into our hands: Google Editions, which will launch next year with between 400,000 and 600,000 titles.

Not necessarily a store or a device

Google Editions is built on top of Google’s enormous book digitizing project called Google Books, and is a platform that stores can take advantage of.

Google plans to share the sales with both publishers and the online bookstores. For books sold directly from its Web site, the search giant said at the book fair that it would give publishers 63 percent of the sales and keep 37 percent itself. For books sold through Amazon or other retailers, the publisher would get 45 percent, while the retailer would get almost 55 percent with a small share for Google.

Google has not (yet?) announced any plans to sell a reader device, primarily because they are making the purchased books available on any device with a browser. In theory, as long as you are logged into your Google account, you can read the same book on your laptop, mobile phone, the netbook you keep in the kitchen, etc.

The electronic ink difference

I’ve periodically tried to read entire books from a computer screen, and I’ve never been able to finish one. Daily computing tasks are different from reading paragraph after paragraph for hours. Conversely, devices like Amazon’s Kindle use an electronic ink that is much easier on the eyes and feels like reading off of paper.

In addition, computers like the iPhone use a kind of screen that drains the battery much faster than the Kindle. Hopefully, competition will be spurred forward with an electronic ink device that has support for Google Editions.

Saving money and peace of mind

My wife has had a 2nd-generation Kindle for about eight months, and loves it to pieces. I asked her the other day whether, because electronic versions of books are cheaper, she thinks she’s saved money on her book purchases, and she nearly guffawed. She figures she’s bought three times as many books as she otherwise would have. It even affords her the ability to read books that normally she’d be embarrassed to be seen with, like the “Twilight” silliness series.

However, having your book purchases on one thin device also means that you’re not storing the ones you’ve already read somewhere in your house, on the off-chance that someday you might read it again. Many of you might be in the habit of donating your old books to a local library or Goodwill, and for that I salute you, but at our house we never seem to get around to it.

Conclusion

No matter what, it’s always better to have more than one store for a given product. I’m particularly pleased that Google is entering this market, because in addition to their motto, they actually do have a strong past record of not being evil.

By the way, did you know you can subscribe to Consumerism Commentary on the Kindle?

Photo credit: Robin Iversen Rönnlund
Reports: Google to launch online bookstore, Lance Whitney, CNET, Oct. 15 2009
Google to launch Google Editions platform, Peter Zschunke, Associated Press, Oct. 15 2009

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Google Editions: E-Books From Anywhere

In my article the other day about the deal I got on a new computer despite my immediate need, I neglected to mention something important: I refused the extended warranty that the salesperson offered numerous times. Any extended warranty is almost always a bad deal.

When I was a teenager, I had a short-lived job at a ubiquitous electronics store; let’s call it “Transistor Hut.” This was the only job in retail I ever had, and I can’t say I was a fan. Our bonuses were determined by our success in selling the “TSP,” an extended warranty. Let’s say that stands for the “Candy Service Plan (with a T),” and I don’t know whether this is still in existence.

The price of the TSP depended on the price of the item, and TSPs were available for almost every product. If you buy a $19.99 pair of headphones, you could spend another $9.99 for unlimited replacement, no questions asked (other than your phone number). If you buy a $299.99 DVD player, $79.99 (or so, keep in mind this was fifteen years ago) would allow you to bring the broken device into the store, have them ship it to a repair facility, and fix or replace it. That’s a process that would likely take several weeks.

The TSPs and any other store’s extended warranties are pushed hard by salespeople because they are often rewarded for them, and they are rewarded because they are very profitable for the store. Most people who buy the warranty will not use it, so the funds become significant income for the company.

Most credit card companies automatically double the manufacturer’s warranty on products purchased with the card for up to one additional year, so that automatic, free protection is often more than enough. Check your credit card’s terms to see if this is available to you. I knew it was available to me on my American Express Blue Cash for Business Card when I purchased the new desktop computer for Consumerism Commentary’s multimedia production.

Perhaps a smarter way to deal with the possibility of broken items — besides not buying anything — is to self-insure. Rather than spending an extra $50, $300, or $2,000 for an extended warranty depending on the product, put that amount into a new savings account designated for your own personal warranty extension. Do the same for all the products you buy for which a salesperson attempts to sell you the extended warranty. What you have created is a pooled funding source for repairs. It is unlikely that all of your products will break or stop functioning, so you can withdraw from this fund to pay for repairs for the one item that fails.

With this strategy, you keep all your money if nothing goes wrong, and if the money is sitting in a high-yield savings account, it’s working for you rather than lining the pockets of major retail chains.

Here is the step-by-step process.

Step 1. When you purchase an item, make note of the cost of the extended warranty. Don’t buy it.

Step 2. Transfer this amount to a special savings account that you will not touch until one of your “protected” items needs to be repaired. ING Direct lets you create sub-accounts, one of which you can name “My Extended Warranties” or “Warranty Fund.” Don’t create a sub-account for each item. One for all of your items will do. Thus, the “Warranty Fund” is pooled.

Step 3. Repeat steps 1 and 2 using the same Warranty Fund you already created for all products you buy that might break or are associated with an extended warranty. This will build up a sizable Warranty Fund in your own name at your own bank earning interest for you.

Step 4. When one of your self-insured products breaks or otherwise needs repairs, dip into your Warranty Fund. Try to avoid using your Emergency Fund unless the Warranty Fund doesn’t cover the full expense and the product must be fixed or replaced.

The strength here is that you are pooling your own funds. This is what the retailers do to ensure warranties bring significant profits to the company. Just like not every customer will take advantage of their purchased extended warranty, not every product you self-insure will break unless you are extremely unlucky or extremely careless. In addition, the best benefit of self-insuring is that you will never have to argue with a store representative about whether certain type of damage is “covered.”

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How to Create Your Own Extended Warranty

Tom Dziubek, the producer of the Consumerism Commentary Podcast, and I have been having some difficulties with the Acer Aspire desktop I purchased earlier this year. I believe the problem can be fixed, but it will take some time. The problems have unfortunately affected our recording and interview schedule, so when an interview on Friday was cut short due to yet another glitch and more interviews were scheduled for today that were already postponed due to technical difficulties, I wanted to resolve the problem this weekend.

At this moment, it is somewhat difficult to get a powerful desktop computer on short notice. Retail stores are gearing up for the release of Windows 7 and manufacturers aren’t providing the stores with much. The belief here is that consumers would rather wait for Windows 7 to be installed at the factory rather than buy a computer whose operating system will be out of date within weeks, even if it includes a free upgrade.

I spotted one major regional chain electronics store that not only had something better than eMachines, it had the exact desktop model that I probably would have purchased online, with a few modifications, if I had more time. Most of the computer’s specifications were excellent, but the only drawbacks were a 5400 rpm hard drive — too slow for audio recording — and an integrated graphics chip. The graphics chip was probably fine for what we needed but I prefer discrete graphics.

The salesperson and I spoke for a long time, and I eventually got a discount on the purchase — a larger discount than I asked for. Here is how I won this battle of money.

1. I was very knowledgeable about what I wanted. I have been researching the best desktops currently on the model for the past few weeks, ever since the first sign of problems with the Acer Aspire, even though I believed and still believe the problem can be fixed. I knew exactly what I wanted and the price range I wanted to pay for the features I wanted.

The salesperson knew I was knowledgeable because I discussed the system in detail with him and explained my other options. I could tell he wasn’t as technically inclined as I am so I didn’t try to show off; I kept the conversation on his level but I was able to express that I had done my research.

2. I pointed out the flaws. It is true this machine had the two drawbacks I mentioned above. I made sure the salesperson was aware of my observation that these factors were detrimental to my choice and might hold me back from buying.

3. I asked for a discount. On the basis of the machine not matching my expectations exactly, and knowing that a 10% discount is common in retail electronics, I asked for 15% off. The salesperson explained that they cannot offer discounts on computer systems, but they could offer me a rebate if I purchased a printer or possibly some other accessories. I considered this; I didn’t need a printer, but if I could get a good discount on a replacement hard drive or graphics card, I might take that option.

The particular store I visited does not sell these types of computer components, so I wasn’t going to find something I needed. The salesperson did work very hard as we thought about different options that might satisfy me.

4. I was patient. When we couldn’t find a good route for a discount other than, in my mind, the computer itself, the salesperson went back to his manager. Still, the word was that they could not and would not offer a discount off the price of the desktop. We looked online, the salesperson on the store computer and me on my BlackBerry, to try to find other stores offering the system for less.

The store’s system of price matching is designed to wear the customer down. The salesperson has sixteen competitors’ websites bookmarked in Internet Explorer, and the process calls for searching for the product on each website in order to find a store with the product in stock and for sale at a lower price.

As I mentioned above, this is a very bad time for buying a computer with stores keeping not much in stock, so I knew this search would be fruitless.

On my BlackBerry, I did find a better price on NewEgg.com, but as expected, the store would not match an online-only price. The price at NewEgg was $30 better than the price in the store, which would have been a discount of less than 5%.

5. I made my final offer. After about thirty minutes in the store, we still weren’t going anywhere. The sales manager wasn’t ready to budge, and I wasn’t going to pay full price yet, even though I knew I needed a new computer by the end of the weekend. I didn’t let the salesperson know that I needed the computer immediately. In his mind, I could just buy the computer online. I told the salesperson that unless they can give me $30 off, that is exactly what I would do.

6. And then I walked out the door. But I didn’t get very far. As I was walking towards the door, I could see the salesperson and the manager in a frantic discussion, and as I stepped outside, I was called back into the store. There were going to make a deal on the desktop.

Patience still played a key role. I waited for what was probably another twenty minutes as the salesperson was in the back of the store, bringing the computer out. There were obviously some more problems because he came out twice without a computer and spoke to the sales manager.

Eventually the salesperson brought out the computer. The box had been opened, but the machine had never been used. It was not a display model or a customer return; the box had been opened because another customer’s keyboard was defective. They took the working keyboard from this computer and gave it to that customer, so mine was without a keyboard. They gave me the working keyboard from the display model and knocked $80 off the price.

That was more than my final offer, so I accepted. My discount in total was more than 10%. I spent more time in the store than I had originally planned but I got what I wanted for a price that was better than I thought I could have received. Even considering the replacement hard drive and the graphics card I purchased later, I talked my way into a great deal.

In the end, I got what I wanted, and so did the salesperson. Everyone wins.

I am not a very persuasive or aggressive person, so it’s a bit against my nature to work so hard just to save $85.59 including tax. I definitely think it was worthwhile. I always suggest at least trying to bargain, even when faced with resistance.

The Consumerism Commentary Podcast is in full swing with new episodes every Sunday. Listen and subscribe now!

Always Try Bargaining: Here’s How it Worked for Me

This is something I’ve wanted to see happen for my entire life. I never thought it would, and I’m only mildly political so I never pushed for it, but we may see a new law that says a TV commercial can’t be “louder than the program it accompanies”, nor can it be “excessively noisy or strident”.

At our house, we don’t get to see a lot of commercials, but our TV-service-provided DVR isn’t as elegant as a TiVo, and the 30-second skip button leaves a gap between skips, and some of those gaps are obnoxiously loud. Usually it’s people wanting to melt down my “extra” gold or sell me some unpainted furniture from a warehouse, but it could be anything. It makes me instantly angry, every time.

But just yesterday,

The House Subcommittee on Communications, Technology and the Internet on Thursday approved a bill that would prohibit television commercials from being excessively loud. The FCC would be required to come up with recommended volume levels for commercials.

Broadcasters, TV stations and cable and satellite providers would then have one year to purchase the necessary equipment to temper noisy ads.

I wasn’t expecting new equipment to be necessary, since when we watch things on Hulu, the ads are never louder than the show I’m watching. When we watch videos on the Xbox, a TV show’s volume isn’t any louder than it would be if I were playing a game, and the same goes with a DVD. Even when watching any of the dozen channels on Boxee, I never have to scramble to adjust the volume. But I guess that “old school” TV providers (I have the extremely recent Verizon FiOS) are a mish-mash of suppliers and delivery devices, and there’s still a hole that needs to be plugged.

House panel seeks to hush noisy ads, Kim Hart, The Hill, Oct. 8, 2009

Hit the mute! Why TV commercials are so loud, and how that may change, Jeff Bercovici, Daily Finance, Oct. 8, 2009

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TV Ad Volume May Finally Be Moderated

In 1909, the U.S. Mint decided to honor assassinated President Abraham Lincoln by putting his likeness on the obverse of the lowest denominated coin in regular circulation, the cent. This new design, introduced for the centennial anniversary of Lincoln’s birth, replaced the “Indian head” cent. The model for this design was most likely not a native American; most sources point to Sarah Longacre, the daughter of the cent’s engraver, wearing an Indian-style head dress.

This was the first time a coin in this country would depict a political leader. Those who created the first coinage in the country several centuries prior desired to distance this country from the monarchies of the Old World, where it was common for state leaders to decree their countries’ coinage should depict their images. American coins, for the most part, would depict a representation of “liberty” until the introduction of the Lincoln cent.

Public reaction

The design change in that year drew mixed emotions among the public. Some welcomed the change. As A.A. Leve wrote on August 15, 1909, in his letter to the editor of the New York Times in 1909, “… [T]he long line of illustrious Americans on our coins will have more education and patriotic influence on the citizens of our country than all the biographies and histories ever combined.” At least in the coin collecting community, you often hear of long-time collectors using their coins to teach their children and grandchildren about American history, so Leve may have been correct.

But there was also dissent. C.F.H. also wrote to the New York Times in August of 1909:

… [T]he chief aim governing a plan to honor such a being as Abraham Lincoln should be to comply with what his wished might be were he given full opportunity to express them. For, in failing to take account of so important a factor, such an honor as that involved in the new product of the mints of this freedom is left incomplete.

To think that Lincoln would find progress expressed in the recent insult to our National symbol of liberty, the “Indian head” on the cent, which, though it might be improved upon, should always remain, is inconceivable.

Throughout the twentieth century, the U.S. Mint was judicious in changing designs on coins. But over the past decade, they, and Congress who has been authorizing these changes, have been on a tear. Although the government’s stated purpose was to incite interest in coins again, it is clear that the U.S. Mint would much rather function like the Franklin Mint, releasing new products as often as possible so they can collect money from coin collectors.

The beginning of redesign overkill

First we had the State Quarters program, which began in 1999. Five new designs would adorn the reverse of the quarter dollar each year for ten years. The artistic and metaphorical engravings of prior centuries were replaced with run-of-the-mill images of whatever each state could come up with to commemorate itself. In 2000, the dollar coin came back in full force with the Sacagawea dollar.

The next coin to be awarded a new design was the nickel in 2004. This year saw two different designs for the reverse. In 2005, two more new reverse designs were used, as well as a new portrait of Thomas Jefferson on the obverse. The following year, the Mint found yet another portrait of Jefferson for the obverse and returned to the pre-2004 reverse.

In 2007, the Mint began a new dollar coin design in addition to the Sacagawea coin. To satisfy Presidents other than those already depicted on coinage, every American President would get a chance to appear on the dollar coin. Four new designs have been released every year since 2007, each with a portrait of a President, released in the order they took office.

The Mint couldn’t go another year without announcing something new, so in 2008 they decided to follow the State Quarters series with additional designs, including representations of D.C., Puerto Rico, American Samoa, Guam, the U.S. Virgin Islands, and Northern Mariana Islands.

Are we done yet? No. This year is the centennial anniversary of Lincoln’s first appearance on the cent. If you’ve looked carefully at your change this year, you may have noticed new penny designs.

A better idea

It’s time to stop commemorating people on our coins. Let’s go back to artistic designs depicting the idea of liberty, like this beautiful engraving of “walking liberty” by Adolph A. Weinman or another liberty engraving by Augustus Saint-Gaudens. Choose one design for each coin and stick with it for a long time, at least one generation and perhaps more than two. Give the public some time to get used to each design.

Continuous design changes don’t make coin collecting interesting for the long term. And for those interested in investing, I doubt that collecting any new coins will ever be financially worthwhile due to the vast quantities that are minted each year. All that is left for collectors besides the coin’s face value is the art. It might as well be good art rather than homages to elected leaders.

The Lincoln Cent (Letter to the Editor), A.A. Leve, The New York Times, August 15, 1909.
The Lincoln Cent (Letter to the Editor), C.F.H., The New York Times, August 6, 1909.

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Overkill At the United States Mint With New Coin Designs

I have a fascinated/disgusted relationship with targeted advertisements. On one hand, I’ve seen enough Playtex commercials in my lifetime that I could probably draw you their logo from memory, and I’ve never been in the position to decide, “should I buy the Playtex version, or a different brand?” All those ads in my face have been a complete waste of my time, and the advertiser’s dollars. So, I think it would be really neat if I only saw advertisements that would interest me.

On the other hand, even though I’m blessed with A.D.D. and therefore daydream my way through most ads, I’ve read enough studies about how ads work, and I know that in some cases I’m more likely to buy a brand I’ve heard of. In other cases, a simple Google search will suffice, and the recommendation from people I trust is worth more than a hundred well-produced ads.

Since the seminal work on the subject—Minority Report—came out in theaters, I’ve been waiting to see just how close we’ll get to individually-targeted ads. And this morning I see that Germany is beginning to place video cameras inside of street-level billboards, designed to recognize people’s emotional reaction to specific ads. If the advertisers sees that more people are smiling, or at least interested, than sneering, they’ll feel encouraged to keep the ad going.

Granted, this is quite far from a commercial that speaks to you or knows your habits, as in “Hey, Bill Braskey, it’s been 8 days since your last vanilla latté. Don’t you think you deserve one?” And I’m thankful for that. At present, I don’t feel like an advertisement that judges my emotional state is an invasion of privacy, but if they start to recognize my identity, I certainly will.

We do, however, already see ads based on our habits. Google and its advertising partners have the ability to show you ads that other visitors won’t see, because your Internet browsing habits are not exactly private. They call it “interest-based advertising”, and because Google is Google, they were very open and up-front about it, and have provided permanent methods for anybody to opt-out of the program.

Billboards shouting out your name aren’t a reality yet for a couple important reasons: 1) recognizing an individual face isn’t foolproof yet, and 2) advertisers don’t have access to a database of, say, driver’s license photos. Although, there may be a way around that last requirement, if Facebook starts selling access to names tagged in photos. In any event, you can rest assured that we’ll keep on top of this for you and help you protect your brain.

Big Brother is watching you shop, Michael Fitzpatrick, BBC News, Oct. 2, 2009

Photo credit: rpongsaj

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Facial Recognition and Billboards

For a good thirty years or so, starting in the 1950s, musicians released singles on vinyl discs called “records”. You could also buy a full album of music by one artist, and some were worth it, but you also had the option of buying just that one song that you liked, that you kept hearing on the radio.

(You’d also get a second song on the “B-side” of the record. Mostly people just considered that a bonus.)

Vinyl made way for cassettes, and the cassingle was born. Then cassettes made way for CDs, and while I remember seeing some CD singles, they were never as prevalent as those on vinyl or cassette. I believe that’s because the vinyl and cassette singles were cheaper to make than the full album version, since they used less raw material, but a CD single cost as much to make as a full CD.

Consumers, en masse, didn’t complain about the death of the single. I did, because I won’t pay $18 for two or three songs. And let’s face it: the majority of your average pop/rock album is filler material. But for some reason, I was mostly alone in my anger.

Then everything went digital, and all Heck broke loose, people were making lossless copies, yadda yadda, you know this part. Now we’re finally at a place where you can once again pay for just the music you like, for a completely reasonable 99 cents, and there’s nothing stopping you from sending a copy to, say, your wife. (See also this controversial article: “Is it Ever Okay to Steal Entertainment?“.) In the music scene, DRM is dead, and yet somehow, the recording industry still lives. Who’d've thunk it? (Me. You. Everyone without a vested interest in obscene profits from album sales.)

Photo by stevecadman

But record companies, bless their pathetic little hearts, are still trying to find a way to sell full albums. There are at least two options in the works, something called “CMX” and Apple’s version codenamed “Cocktail”, which we’ll almost certainly learn more about at their upcoming press event on September 7th. These new digital album covers are meant to be interactive, and include videos and lyrics, and other mysterious “stuff” that has yet to be identified.

It won’t work. If I had an extra $1,000 (or even $1,000 that wasn’t extra), I would bet it all that this won’t work. These efforts will all die. Technical compatibility issues aside, people are simply done buying things that they don’t like. I’m not in the habit of feeling schadenfreude, but in this case, I am happy to sit back, point and laugh.

That all being said, when a music group proves itself to make consistently good albums of mostly-non-filler (in my opinion, people like Ben Folds, They Might Be Giants and “Weird Al” fit this description), I’ll buy a whole album. They deserve it. Also, good movie soundtracks. Music tastes are incredibly subjective, of course, but until music goes non-digital again, you’ll have very few reasons to buy a whole album.

New digital album format doesn’t have a prayer, Matt Rosof, CNET News, August 11, 2009

Cocktail part of Apple’s September event, Greg Sandoval, CNET News, August 14, 2009

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The Album’s Last Gasp

Depending on which newspapers and news websites you read, the Consumer Confidence Index either soared, jumped or surged this month. The headlines as you would expect don’t tell the whole story.

The Conference Board calculates this index by performing a random survey by phone of 5,000 households in the United States, selected because they represent the country as a whole. The questions in the survey ask the respondents how they feel about the economy as they look towards the next six months. Will there be more jobs available? Will they receive a raise?

The results of this questionnaire moved the Consumer Confidence Index from 47.4 in July to 54.1 in August, significantly beating the economists’ expectation of 48. Economists are calling this a major win for the economy, but to me it just looks like those in charge of the predictions got it wrong. If the expected August index was 55, we would see disappointed headlines rather than the exuberance expressed today and yesterday.

Consumer confidence becomes a “self-fulfilling prophecy” in some ways and a feedback loop in others. Those who respond to the surveys with a favorable outlook cause the Index to move upwards, and the news of the index moving upward encourages businesses to start operating as if the economy is heading soon towards recovery.

But let’s keep this in perspective. While the economists are joyous about the Consumer Confidence Index’s jump, the index is significantly below the level one would consider “good.” According to CNN, we would need to see an index of 90 before the economy can be considered solid. We’re only at 54.1. We have a long way to go before jobs start appearing in the market and before people start spending more.

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Consumer Confidence Above Expectations: Are We Out of the Woods?

I promise this is a coincidence; I had no intention of writing about coffee for two articles in a row (previously: “Iced Coffee Savings“).

Yesterday, Starbucks started instituting pricing changes on some drinks, lowering the prices of easy-to-make, popular drinks and raising the price on larger, more complicated drinks. There weren’t a lot of specifics, but two different articles mentioned the frappucino as one of the targets for a $0.25 price increase. I’ve worked at two different Starbuckses, and that is not a difficult thing to make, but it does require people to wait a little longer, especially in the summer.

Easy drinks will see a price cut of five or ten cents, nothing to get real excited about. The thing that people usually forget about Starbucks is that – and I’ve heard this from managers of the store – it’s supposed to be a place you go to treat yourself once in a while. If a five cent price decrease at a gourmet coffee shop manages to save you a significant chunk of money over the course of a year, you’re already pretty wealthy, and you don’t need the discount.

Here are some insightful comments from the same story at the Huffington Post:

I’ve always believed that the price should be based on how long it takes to describe what you want.

From a business perspective, I believe this is a good idea. However, haven’t bars been doing this for years?

it would help alot if starbucks would charge $20 for an iced caramel frappuccino. that’s probably the only thing that would keep me from drinking every one I get my hands on.

ok, $50

And just for fun, here are my favorite two drink recipes of all time (I swear I have seen people order these):

1. Three-quarters decaf quad grandé soy extra-hot no whip mocha valencia
2. Triple venti upside-down non-fat extra caramel caramel macchiato

In a first, Starbucks lowers price of some drinks, Lisa Baertlein, Reuters, August 20, 2009

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Decaf Double Short Skim Double-Pump Vanilla Latté

It’s debatable whether the Cash for Clunkers program, formally known as the “Car Allowance Rebate System” or the apt but unoriginal acronym “CARS,” will eventually be seen as successful either in terms of the economy or the environment, but it certainly has dealerships fired up.

While the dealers appreciate the customers — without Cash for Clunkers, customers would still be waiting in the wings — they are now concerned about not receiving the $3,500 or $4,500 rebate payments for the government. And it’s no wonder.

• Only 225 of the 635 National Highway Traffic Safety Administration employees are currently processing 412,000 dealership claims for the credit.
• The funding for the program may run out sooner than Labor Day. Update: I was right, the government announced Cash for Clunkers will end on Monday, August 24.
• Up to 80% of some dealers’ applications are being rejected by the NHTSA due to incomplete paperwork.

CARS has become a massive marketing campaign, getting hundreds of thousands of customers through dealership doors. I’ve seen flatbed trucks transporting crushed clunkers on their way to clunker purgatory. The program is evidently popular, but there seems to be confusion between customers, dealerships, and the government. And as far as marketing campaigns go, it beats Ford’s “Why Ford? Why Now? Why Not?” campaign that seems to be an admission that no one can think of a reason to buy a Ford vehicle.

If you expect to use the Cash for Clunkers credit to your advantage, know your rights. Dealers are not allowed to ask customers to place a down payment as security against the credit. They are also not allowed to require customers to settle with the dealer if the government fails to approve the CARS application. You can find all the rules at the CARS FAQ, but here are some of the relevant items.

Question: A dealer has demanded that I sign an agreement that requires me to pay the dealer the amount of the CARS program credit if the dealer’s CARS program credit application is rejected. Am I required to agree to this?

Answer: NO. To participate in the CARS program, you do not have to sign an agreement to pay back the dealer the CARS credit amount if the deal is rejected.

Question: The dealer says that I should take my trade-in car home after I sign the purchase agreement for a new car under the CARS program, and that I can pick up my new car after the dealer is paid by the government. Can I do this?

Answer: NO. The dealer must take title to and possession of your trade-in vehicle in order to submit a credit for reimbursement under the CARS program. You may not keep possession of your old car.

Question: A dealer has demanded that I sign an agreement that requires me to pay the dealer if the credit application is rejected because I submit incorrect information regarding my name, residence address, driver’s license number, or the title to my trade-in car. Am I required to agree to this?

Answer: NO. However, be aware that to participate in the CARS program you must certify under penalty of law that all information you provide is true. If your CARS program credit is denied because of a false statement made by you, the dealer may take action to recover the money or vehicle regardless of whether you sign such an agreement.

Question: A dealer has demanded that I leave a signed check or credit card authorization in the amount of the CARS program credit that he will return to me if the credit application is approved, but keep if the credit application is rejected. Is the dealer allowed to do this?

Answer: NO. The dealer must reduce the price of the new vehicle by the credit amount. If a dealer has a check or credit card authorization given by you at the time of the sale, the dealer has not actually reduced the price as required by the CARS program. Take your trade-in to another dealer if a dealer makes this demand.

Question: A dealer has included in the purchase agreement a requirement that I return the new car or pay the dealer the amount of the CARS program credit if the CARS program credit application is rejected. Do I have to sign this in order to participate in the CARS Program?

Answer: NO. You are not required to sign an agreement like this to participate in the CARS Program. However, you may agree to such a term, but your choice to agree is between you and the dealer.

If you believe a dealer is acting outside accordance with the law, you can report them to the NHTSA by calling 1-866-CAR-7891.

Clunker traffic jam angers dealers, Rick Newman, US News & World Report, August 19, 2009.

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Don’t Let Dealerships Mislead You About Cash for Clunkers

I am not a very good baseball fan. I grew up with the Mets as the team of choice in my family although none of us were much into sports. This loyalty was solidified with the team’s World Series win in 1986 when I was ten years old, the prime age for baseball fandom. Now with a girlfriend who has lived her entire life practically next door to the Mets, I have returned to my old ways.

While remaining mostly cool, detached, and apathetic to baseball in general, I have to admit the sport is fun to watch. And that works for me because I don’t care about the losses; thus, I don’t get frustrated in what would normally, for a fan, be a very frustrating year.

The enjoyment of baseball relies on putting aside the fact that the sport — and perhaps all sports, or all forms of entertainment — is just a commercial. The baseball game is one long commercial for a variety of products and services. Every single aspect of the game is sponsored by a company that offers something for fans to buy. The true goal of these events which draw tens of thousands of spectators in person and millions via radio and television is not to entertain or enlighten. The true goal is to get you to part with your money.

And they do a very good job of this.

Last night, I attended a Mets game for the first time this year. The organization originally sold our seats to someone for $175 each. They came with wonderful, but expensive amenities, like access to a dining area. But we managed to save some money in some areas while missing others. Here are some things we did and some we could have done to save money at this Major League Baseball game, besides staying home and watching the game on television or listening on the radio.

Buy tickets secondhand. While our seats had a “face value” of $175, we waited until the last twenty-four hours to buy them through a second-hand ticket broker, StubHub. We saved almost $100 a ticket, paying what is much closer to what I believe to be a fair price for the experience. Our seats were excellent, a few rows behind the third base dugout. Fans are desperate to unload tickets they can’t use, so wait until the twenty-four hours leading up to the game and you’ll find better deals. These were likely someone’s season tickets, so they may not have paid full price either, but I do feel we got a good deal relative to what other seats cost.

Buy the cheapest seats. Every stadium has an option for the nosebleeds. With most games, you can buy the cheapest tickets but still find a way to see the game from a better location. There is usually an opportunity to move around, so don’t be afraid to perform a “manual upgrade” if you’re not infringing on anyone else’s enjoyment of the game and if you remain polite.

Take public transportation. We may be spoiled in New York. Public transportation to Mets and Yankees games is convenient. Parking at the stadium is an expensive hassle. I remember one time a few years ago it took two and a half hours just to get out of the Yankee Stadium parking garage onto the streets in the Bronx. Now I take the Long Island Rail Road to Mets games, and my girlfriend lives just blocks from a train station.

Bring your own drinks. For most fans, alcohol is part of the experience of being at a ball game. Alcohol must also be a way to cope with bad seats; in the past, I’ve noticed the worse our seats, the rowdier and drunker the surrounding fans. Anyhow, cut back the alcohol at the game and bring your own soda or water. Depending on the stadium, the security might let you bring in outside drinks or food.

Eat before and/or after the game. I tend to go into games hungry. This is a very bad idea for me, as I’m tempted to order and eat the junk food served at the stadium’s concession. Or even worse, if my seats include complimentary admission to one of the dining clubs, I might order food there. Either way, this food is very expensive. Consider a frugal tailgate at home before the game or in the parking lot and refrain from eating ballpark food.

Skip the souvenirs. Major League Baseball knows that the business of souvenirs is huge. Companies like New Era and Majestic Athletic pay significant licensing fees to the MLB in order to sell the “official” versions of sports merchandise, so they charge more for these “authentic” souvenirs. This is completely unnecessary for experiencing baseball.

Close your ears and eyes. Throughout the game, you are bombarded with marketing. There’s little you can do about this other than try to ignore it. Citi’s sponsorship of the Mets gave them naming rights on the stadium and all the ATMs are owned by Citibank. Pepsi has a significant presence at the stadium; its branding through signage is even larger than Citi’s and you won’t be able to find any Coca-Cola products at the game. Advertisers believe that the target audience for baseball is middle-aged men with greying hair; thus, Just For Men, a hair dyeing product, is featured prominently in the stadium and on broadcasts.

Anything that is featured, like the out-of-town scoreboard, the starting line-up, the call to the bullpen, or the play of the game, is attached to a sponsor. There is no way to escape this deluge of commercialism and fans have just grown to accept it. Even though you realize it exists, the association between baseball and these companies sticks consciously and subconsciously. I can guarantee that every one of these companies that sponsor a small piece of baseball has a counterpart that is just as effective or pleasant, but is less expensive because it doesn’t pay for massive sponsorship deals.

How do you save money at baseball games?

Photo: Flexo

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How to Save Money at Baseball Games

Ninety-three years is a long time to live. My paternal grandmother was that age when she passed away this past Saturday. I attended her funeral, a graveside service, earlier this week. She lived in Florida, but she was flown up to Long Island to be buried with her husband, who died in 1968.

A couple of weeks ago, my maternal grandmother entered hospice care, with the doctors offering a prognosis of days or weeks, maybe months, due to Parkinson’s disease and, I believe, complications after hip surgery. She lives in California and is in her mid-eighties, and since receiving the news I’ve been mentally and logistically planning to travel out to the west coast at any time with one day’s notice.

I was then surprised when I heard from my father this past weekend that his mother had also entered hospice care. While my mother’s mother continues to have bad days and somewhat better days but is surviving, my father’s mother passed away after one day. My family in Florida held a ceremony for her on Monday, and more family in New York was on hand on Tuesday for the burial. This quick pace is not uncommon; Jewish funerals typically occur quickly, without a wake or viewing.

Occasions like these often bring together distant relatives who have been out of contact, and this Tuesday was no different. It was great to see relatives and friends of the family I had not seen in decades and meet other friends and relatives.

I wasn’t involved in the financial aspects of this event, but it was apparent that a funeral can be a very expensive event. Despite the morbidity of the though, a funeral should be financially planned. In our case, the plot was purchased a long time ago, when prices were surely much lower than they are now. In my grandmother’s case, I would imagine the transportation from Florida to New York was the most expensive part of the day.

How much does a funeral cost?

The National Funeral Directors Association conducts a survey every year or so to gather information about the cost of funerals across the country. As you would imagine, the costs increase every year. The 2006 survey produced these averages for itemized funeral services:

The cemetery where my grandmother is now buried also has a yearly fee for keeping the plot tidy but has an alternative option for “perpetual care.” Perpetual care is a one-time fee, currently $2,000 at this particular cemetery, that covers trimming the hedges and other landscaping.

The Federal Trade Commission requires funeral directors to provide itemized prices for all services related to the funeral, so make sure you ask as many questions as possible.

Planning for a funeral

In 1968, when my paternal grandfather died, the average total funeral cost was $708; in 2006, the average total cost was $6,195.

One of the best ways you can help those you leave behind afford this expense, if you can manage to help, is to set aside money to care for the events surrounding your own death. In the real world, there are many things that can get in the way of this planning such as the cost of health care. Even though there are often financial obstacles as you age, any consideration will help your family.

The first thing you could do, if and when you have settled down to live in a certain area, is purchase a plot in a cemetery that fits your family’s tradition or religion. Buying the plot in advance will save money down the road as the cost of plots and practically everything else associated with a funeral increases at a rate higher than inflation.

If it is not offensive to you, or your religion, cremation is a less expensive option. Consider cremation if this is aligned with your personal values.

Don’t forget to comparison shop. If you want until it’s too late, there may be pressure to make decisions quickly. This increases the chances of spending money unnecessarily.

For those looking to cut costs on a funeral, Christopher Solomon has suggestions for planning a funeral for $800 or less.

Coming to terms with mortality

I never said William Shatner is a great singer. His first album, The Transformed Man, established his status in music history as not a great singer. But paired with Ben Folds for the more recent Has Been, he came up with the poignant “You’ll Have Time,” which reminds us all that we are going to die at some point. “Live life like you’re gonna die, because you’re going to…”

There’s never been a better reason to stop procrastinating.

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My Grandmothers and the Cost of a Funeral

My electricity provider (which is Green Mountain Energy, because I’m an aspiring hippie), offers me the ability to make the same payment each month, based on the previous six months’ usage.

Here in Dallas, people require air conditioning for roughly nine months a year, so our average monthly billing is about $300. I won’t say that’s not a lot of money, but in previous years in leakier houses, we’d sometimes see bills over $550.

For me, it’s unlikely that I’d pay close enough attention to our bills to figure out what the average amount is and then set our budget accordingly. So we’ve had instances where the joint “bills account” had overdraft problems, which is just about the dumbest way to waste money.

I’d prefer it if we could get even more of our predictable monthly expenses billed on an average basis: groceries, haircuts, gasoline, lunch, you name it. For me, one of the keys to financial stability is not having to think about how much to spend.

Do you enjoy average billing for any of your utilities? Would you ever go back?

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Average Billing: Is it For You?

The “Cash for Clunkers” program that we told you about on June 19 has received a shot in the arm in almost-last-minute actions by the House and Senate. They approved an additional $2 billion to continue the unexpectedly popular rebate program through Labor Day.

Opponents of the program feel like:

Richard Shelby, the top Republican on the Senate Banking Committee, said the program “has squeezed months of normal activity” into a short period of time.

But NPR’s Planet Money pointed us to at least one couple who wouldn’t have bought a new car if it weren’t for the program.

And though rebates are reportedly difficult to process, dealers and automakers love the program:

“There is no question that ‘cash for clunkers’ has succeeded,” said Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, the chief trade group for General Motors Co, Chrysler LLC, Ford Motor Co, Toyota Motor Corp and other big carmakers.

Have you participated? If so, were you going to buy a new car, anyway?

“Cash for clunkers” gets a $2 billion boost, John Crawley, Reuters, August 7, 2009

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Cash for Clunkers: The Revenge

If you were to start adding a comment to this blog post, but we first made you wait fifteen seconds after pressing the “comment” button to make you hear some extraneous instructions, you’d be terribly frustrated. Now imagine if every Web site had the same problem, and imagine further that you were being charged for every second of time you spend online.

That’s basically the problem (well, one of the problems) with America’s big mobile phone companies. Anytime you want to leave a message for, say, a Verizon customer, you hear this:

At the tone, please record your message. When you have finished recording, you may hang up, or press 1 for more options. To leave a callback number, press 5.

We’ve heard these messages so much that we could all do bang-on impressions of them. For the most part, I usually just roll my eyes and my sense of the phone company’s collective intelligence goes down one more notch.

But David Pogue, technology columnist for the New York Times, sees a more serious problem: mobile phone carriers are using this extra-fifteen-seconds-per-call in a disgusting attempt to get more money from each of us. These seconds count towards our airtime usage. If you’re paying as you go, you see the problem right away. And even if you have a monthly plan, just four messages a month means a minute that you shouldn’t be using up.

But Mr. Pogue has an idea for fixing this (not to mention shocking data on how big the problem is). He’s started the “Take Back the Beep” campaign, wherein you and I send e-mails to the four biggest mobile phone companies, politely demanding that they quit this at-least annoying and at-worst money-grabbing activity. From the article:

cell executives admitted to me, point-blank, that the voicemail instructions exist primarily to make you use up airtime, thereby maximizing ARPU (Average Revenue per User)

If Verizon’s 70 million customers leave or check messages twice a weekday, Verizon rakes in about $620 million a year.

I’m heartened by stories that start out as a single complaint on Twitter, and end up getting a huge corporation’s attention, who is then obligated to rectify the matter. This should be even bigger than that. I took the time to send my complaint to AT&T. Won’t you?

Maybe if this is successful, we can then get mobile phone operators to admit that what we’re doing is just making phone calls, like we always used to do, and therefore, if you are the recipient of the call, you shouldn’t pay for it.

Take Back the Beep Campaign, David Pogue, The New York Times, July 30, 2009

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Take Back the Beep Campaign

Editor’s Note: This program is back on again and should be available through Labor Day, 2009

All good things must come to an end, and in some cases, prematurely. The “Cash for Clunkers” Program, or more formally, the Car Allowance Rebate System, has allocated almost all of its budget to rebates after only four days. The law called for the program to last until November 1 or until the funds are depleted, which ever condition occurs sooner, but I do not think there were many people who expected the funds to run out this quickly.

Consider yourself lucky if you were able to qualify for the program before it was suspended.

Car dealerships apparently saw active business this past weekend, and if all the funds were used up then the program was somewhat successful. While on the surface, Cash for Clunkers appeared to be a program designed to help consumers or to help the environment, but the real goal was to help dealers sell cars. It resulted in some short-term success despite setbacks due to the EPA’s recalculation of mpg, but we will have to wait for the car companies to report their finances to judge the success.

It’s also a possibility that Cash for Clunkers will come back. If the Congress decides the program is worth spending more money, we could see another Cash for Clunkers. And if we do, it might even improved to apply to more cars.

Update: While the Transportation Department called dealerships to tell them to stop accepting applications for Cash for Clunkers, the White House informed the public overnight that the program would continue. The House and Senate are now racing to re-authorize the program for another $2 billion.

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Cash For Clunkers Suspended

The Cash for Clunkers Program went into effect recently, but so did changes to the official EPA-estimated mpg ratings of several cars. For example, the 1987 Mercury Grand Marquis, according to CNN Money, was rated a combined 18 mpg last week, but as the program began this week, the rating for this year, make and model jumped to 19 mpg on Monday.

While a change of 1 mpg seems relatively insignificant, the Grand Marquis rated at 19 mpg no longer qualifies as a trade-in worth up to $4,500 under the Cash for Clunkers Program. Since the new legislation was made retroactive to July 1, car dealers have been including the rebate in their deal calculations before the rebates were available. Furthermore, dealers offered the anticipated credit as an immediate benefit to the customer with the expectation of being able to file for the credit. But this change by the EPA resulted in some cars no longer qualifying for the credit already given to the customers and as a result, some dealers have been asking customers for the money back or threatening to take back the new car.

According to the EPA, 78 models became ineligible for the credit after the reassessment of mpg calculations while 86 other models have become eligible, so there may be credits available for some who may not be aware. The recalculations occurred for model years 1985-2007 to use the same calculation that began in 2008. This puts all cars released since 1985 on the same scale, and this was a change required by the new legislation.

My 2004 Honda Civic changed from an official EPA combined estimate of 34 mpg in the old calculation method to 30 mpg in the new calculation method. You can see how your car’s estimates changed at the car finder at FuelEconomy.gov.

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EPA Disqualifies Shoppers From Cash for Clunkers Program

A week ago I wrote a post called “Is it Ever Okay to Steal Entertainment?”, which produced great comments from our readers, many of whom were clearly incensed that I would ever try to rationalize stealing from content creators. I’ve been thinking about the criticism and understanding that was added to the original article. I wanted to see if I could ever become the person that never even accidentally steals entertainment.

I got the impression from your comments, and correct me if I’m wrong, but a lot of people feel that if I’m enjoying any kind of entertainment, then I should have paid for it first.

The problem, I’ve concluded, is that we all steal. All of us. Not always on purpose, but it happens. Some examples:

The Problem with Having Friends

Your friends want you to enjoy the things they enjoy. I really enjoy the band “Cake”, and I never would’ve been exposed to them if someone hadn’t burned me a copy of “Fashion Nugget” back in 2001. Now, over eight years after that, I still haven’t paid for that album, but I enjoy at least one of those songs at least once a month. I’m willing to admit right here that I “stole” that album. And as a direct result, I paid for three other albums of theirs. So the band “Cake” was down one, then up three. “Cake” profits.

This is true of most of the bands that my friends share with me. Friends know best what you’re likely to enjoy.

The DVR Problem

I don’t think there’s any Cable/Satellite/FiOS TV provider that doesn’t offer a DVR box for their customers. Unless you’re watching a Superbowl-type event, or keeping tabs on a weather event or election, you’re probably skipping commercials. That’s stealing: it breaks the model of “we’ll make shows, you pay us, and we’ll insert ads for your product, and there’s an infinitesimal chance our viewers will buy your product over someone else’s”.

If you have a DVR, and you’re decidedly not skipping commercials out of a noble effort to continue this outdated model, then my hat’s off to you, and also, I don’t believe it.

Not to mention the fact that most of the time, the volume of commercials during the break is set so loud that I feel I’m being screamed at.

The “Album Only” Problem

The list of albums that I can listen to all the way through is about half a page long, double-spaced. Nearly every album contains filler material: stuff that the artists know most people won’t like. For about thirty years, record companies sold single songs, with B-sides, and they did very well. The popularity of the CD somehow brought about a trend for people to buy whole albums.

I bought plenty of albums on CD, and have been disappointed with plenty of songs. That’s not an accident, that’s the record company stealing from me. I’m not saying “two wrongs make a right”. I’m just pointing it out. Apple and the record companies know that people much prefer buying single songs, and not wasting money, so they’re working on a new add-on for people who buy whole albums. We’ll see how that turns out, but at present, I predict it will be a miserable failure.

Entertainment in the 21st Century

I much prefer the Creative Commons approach to releasing entertainment. Since Day One, Jonathan Coulton has made it possible and easy to enjoy his music for free. Just as importantly, he’s made it possible and easy to pay him for the songs you like. His music makes me so happy that I’ve paid for the MP3s, as well as a collector’s set of “Thing a Week” CDs, a DVD, and tickets for three concerts.

I know the system works for him, too, since he recently moved into a bigger house with his wife and children.

A Larger View

I think we’re in between payment models at the moment. I’m seeing a 21st century where people only pay for the things they enjoy. My wife and I are already working on a computer-based system, using content from places like Hulu (which includes ads that you can’t skip, but only a couple minutes’ worth), and I’m looking forward to reporting on it, if I can get the bugs all worked out.

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Stealing Entertainment, Revisited