Online merchant reward schemes... or "aggressive sales tactics"?

18 November 2009

Those of you with eagle eyes and long memories may recall a story we published around a year ago, concerning a discount scheme operated by Shopper Discounts & Rewards, which is owned by Webloyalty.

We explained the scheme began when you reached the checkout page of several major internet merchants operating in the UK, including TheTrainline and easyJet. The sites would partner with Shopper Discounts & Rewards to offer an incentive such as cashback on your next purchase. Accepting the offer meant accepting the terms of Shopper Discounts & Rewards, in that the merchant shared your billing details with the scheme, which in turn signed you up to a monthly recurring membership, typically billed at £10 per month.

Our post, which then proceeded to call out Webloyalty for this practice, was published on Bitterwallet but taken down shortly afterwards. Webloyalty's legal team immediately lept into action.  We had said a whole bunch of stuff they didn't like and linked to plenty of forums and newspaper articles - there are people who clearly weren't fans of Webloyalty. It's not often we comply with such notices - in fact this is the only time we have.

Bitterwallet - Webloyalty letter

Why bring this up now? Michael Arrington over at Techcrunch is being far more vocal about Webloyalty and other companies, taking his cue from a report released by a U.S. Senate Committee called "Aggressive Sales Tactics on the Internet and their Impact on American Consumers". It states that Webloyalty is one of the three largest companies involved in this activity, and that together they have earned over $1.4 billion (around £833 million) in revenue from 35 million transactions, with 4 million people currently enrolled in the plans.

Below is a list of partner companies profiting from this "post-transaction marketing"; obviously it is dominated by American companies, but it gives you an idea of the popularity of such schemes:

Bitterwallet - partner companies profiting from "post-transaction marketing"

How much has Webloyalty earned from its UK transactions? The US State Senate report concerns only US consumers so it doesn't comment. The report is certainly worth a read - it discusses various tactics employed to encourage sign-up, as well as details of Webloyalty settling a major lawsuit:

Bitterwallet - US State Senate report

TOPICS:   Travel

7 comments

  • The B.
    £10 a month for discounts? Seriously? There really is one born every minute isn't there?
  • Jeffrey A.
    Where do I sign?
  • Rippe D.
    add M&M to the list!
  • buyerbeware
    Arrington also call it cashback. A middleman with nothing to sell creates a business by setting up a website, collecting lots of offers and telling the consumer buy this from me instead of the retailer and I'll give you £5.00 back. The retailer now how a network of websites selling their product for which they only pay on results. The iincentive increases the number of sales for the retailer and prices are fixed to maintain margins. They are loads of catches on whether or not cashback is paid. Not 100% of consumers receive their cashback.
  • Tony S.
    PLEASE CAN SOMEONE put a STOP to this unbelievable, INTERNATIONAL, ILLEGAL, DEVIOUS robbery!!! We have just realized we have been scammed for several months with Shopperdiscount.com and now a 'piggy-back' My-Time_Rewards doing the same thing. We noticed, late, £10monthly debits appearing on Bank Statements. This is surely CRIMINAL and yet has been continuing for years, by the looks of it. Thankfully, after calling and clarifying that we had signed up INADVERTENTLY for this on TrainLine / MandMDirect checkout we are in the process of recuperating the stolen money and will be all the more VIGILANT in future. P.S> @ ''THE REAL BOB'' this -offer- was at the checkout stage, pretending to be a discoiunt for NEXT purchase / train travel, it was very subtle, I don't recall seeing T&C
  • Tony S.
    just received this... which confirms above mentioned 'budget' for those of us who blow the whistle !!!!! I wonder what budget they have for UK!!! This notice confirms that your Membership in Shopper Discounts & Rewards has been cancelled as of 15/01/2010. Your cancel confirmation number is: 28XXXX84. We have issued a refund of your Membership fee. This refund will appear as a credit to your account within the next 10 working days. Please let us know if your request was resolved to your satisfaction. All responses submitted will go to our Customer Service Director for review because your feedback is important to us. If you would like to provide feedback, please click here. Sincerely, The Shopper Discounts & Rewards Team [email protected] 0808 234 1539
  • CP
    I know this blog is a little old, but I've just seen that in response to the criticisms, they've launched a new FAQ service at the following link: http://getsatisfaction.com/shopperdiscountsandrewards Hopefully it'll mean people can get the answers they're demanding.

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