Ever heard of “Reservation Rewards”? How about “Web Loyalty”?
Chances are your answer to both questions is no. But in this case what you don’t know can hurt you.
Reservation Rewards is a program run by a company called webloyalty.com. In the nature of those little booklets of 2-for-1 coupons you might buy for a school fundraiser, the program gives you various perks and discounts on restaurants, movies, and other purchases, as well as providing some forms of credit card fraud protection and travel insurance.
It also costs over $100 a year, probably substantially more than most consumers would value it at, though there certainly may be some people who will benefit more than that and thus for whom the program would be a good deal.
The problem is, even if you’re one of the people who would not regard such a discount program as worth such a cost, there’s a decent chance you’re already paying for it and don’t know it.
The reason lies with the method by which Web Loyalty acquires the customers for its Reservation Rewards program.
Sites as varied as Priceline, Fandango, Shutterfly, Orbitz, Buy.com, and many more allow or in the past have allowed Web Loyalty (for a generous fee/kickback) to market to people making purchases on their site. Marketing that is, in the eyes of many, misleading to the point of being deceptive.
The way it works, the consumer goes through the checkout process to make an online purchase at one of these sites, clicks through the various confirmation screens (yes I’ve read the terms and conditions, yes that’s the correct amount, etc., etc.), and comes to one that has a space for an e-mail address and some kind of teaser offer, like 10% off their next purchase. This is the Reservation Rewards sign up that Web Loyalty has paid to be allowed to insert into the online purchase process for this site. If the purchaser does indeed enter their e-mail address and continue, they have thereby agreed to join the program and have money deducted from their credit card each month to pay for it.
It’s not as if the charge is completely hidden. The sign up page states that one is joining the program and will be charged. Multiple e-mail confirmations are sent. The charge of course shows up on one’s credit card bill. So it’s hardly impossible to know you’re incurring this charge.
But remember, this is all a game.
The idea is to slip this kind of thing past as many people as possible, while not making it so surreptitious as to cross the line legally. The better this kind of company is at dancing along that line, the more profitable it’ll be.
So the placement of the information on the page, the size of the font, the color of the font, the borders that are around certain parts of the page and not others, the number, timing, and wording of the follow-up e-mails, the amount billed to the credit card, etc., etc. are all chosen very strategically in order to get the maximum people enrolled in the program while still being able to say to the law’s satisfaction “Hey, we warned them what they were getting into!”
So a lot of people pay for this every month without even knowing it. Maybe they’re rushing through the confirmations (not even having their guard up that the site they’re purchasing from would actually provide their credit card information to some third party and leave them vulnerable to being charged by them), maybe they delete e-mails from companies they’ve never heard of as probable spam, maybe they don’t look closely at every line of their credit card bill (especially for little amounts like $10 or $11 or $12), and so it slips past them.
Is it their own fault in a sense? Sure. Ideally people should be more cautious and learn to protect themselves in such situations.
But I think a lot of folks who’ve become reasonably savvy about such matters, especially about knowing their way around the Internet and e-mail, forget how confusing and intimidating it can all be to newcomers just trying to maneuver through the maze and complete their purchase.
And even if it’s only the 2% or 5% or 10% of the people least careful, least knowledgeable, least savvy about these matters that get snared, that’s a lot of people, and a lot of money for a company like this.
By the way, they haven’t always succeeded in dancing along that line of maximizing their effectiveness while avoiding legal problems. Web Loyalty has been investigated, sued, taken hits to their Better Business Bureau rating, etc. over the years, culminating in having to pay up to $10 million for a class action lawsuit settled in 2009.
So if you haven’t already, check your credit card bills to see if there is a small charge from this company. It should show up as “WLI*RESERVATIONREWARDS.” If there is, here’s what to do:
1. Go back through previous bills and total up how much you’ve been charged all together by this company.
2. Call Web Loyalty at 800-732-7031. Explain that you unknowingly signed up for their program. Insist on a full refund of everything you’ve paid. They might put you on hold, tell you the system’s down, insist you fill out forms, try to argue you out of cancelling, etc., etc., but in the end they do as a policy give the money back when people demand it.
3. If they’re being especially stubborn, or you just lose patience jumping through all their hoops, contact your credit card company and explain the matter to them. They will almost always refund the charges to you and pursue the matter with Web Loyalty themselves.
4. If you get satisfaction from neither party, file complaints with the relevant regulatory agencies, the Better Business Bureau, etc. You are in the right and will get the money back eventually.
5. Be a lot more careful in the future what you’re agreeing to when clicking through an online purchase. Read webpages, e-mails, and credit card bills more closely to avoid this happening in the future. If you can infer which site got you hooked into this program, consider writing to them to tell them how you feel about the despicable business practice of providing credit card information to third parties and letting them prey on their customers this way.
[Update: Web Loyalty has responded to this article with a communication pointing out that as of January 2010, they instituted a new policy whereby enrollees in their program now must leave the vendor’s site and enter their billing information directly with Web Loyalty itself, thus making it less likely that people will inadvertently sign up for the program because they think they’re just going through their vendor’s standard checkout procedure, adding “Web Loyalty wants consumers to know what they are buying and how they are paying for it before they become members.” The additional information is appreciated.]