Tag Archives: Shopping

Bloomingdale’s Warehouse Fur Sale – Proof That Even Luxury Goods Retailers Are Hurting ?

You are more likely to find us at a PETA meeting than in the fur salon at Bloomingdale’s, and we usually don’t pay much attention to advertising for fur coats. Besides, who needs fur, when you already have, well… fur! (see our picktur). But with everyone’s preoccupation these days with the economy, and the fears of a prolonged economic recession, I guess we have fine tuned our radar to keep an eye on advertising and retail trends.

We just heard a radio commercial advertising Bloomingdale’s warehouse fur sale. Now perhaps they have this sale every year, but I can’t recall hearing or seeing this in the past. If this is a new marketing gimmick by retailers of high-end products, we think it is confirmation that the economic slump has finally reached the luxury goods market.

RoutingByRumor’s economic rule of thumb # 1: You know it’s really a recession when the luxury goods market is hurting, or when you can’t unload your mansion at any price. What’s next? Buy-one-get-one-free deals from Rolls Royce? A De Beers warehouse sale? Buy one Learjet, get the second one for half-price?

Now don’t go running out to your nearest Bloomingdale’s store. The advertisement indicated that the sale is taking place at their fur warehouse, which is actually the Danish furrier Birger Christensen’s warehouse. Birger Christensen / BC International Group (BCIG) appears to be the largest fur retailer in the United States. (As an aside, I stumbled across some interesting info about an action that BCIG brought against another retailer to gain control of the Internet domain “maximilian.com”.)

We’ve read that Bloomingdales is not Birger’s customer, but rather it’s landlord. Birger Christensen leases space in Bloomingdale’s stores and operates the fur departments with their own employees. This, coupled with the fact that the “warehouse sale” is taking place at BC’s warehouse, tells us that it is not Bloomingdale’s holding the warehouse sale, but Birger. It would be our guess that the inventory is owned by Birger, and not by Bloomingdales (or by any of the other retailers where they operate their fur salons).

With BC’s purchase of Evan’s, Inc. almost ten years ago (see this article about Evans’ history), they operate the fur salons in Bloomingdale’s, Carson Pirie Scott, Dayton’s, Filene’s Basement, Goldsmith’s, Hudson’s, Lazarus, Macy’s, Marshall Field’s, Rich’s, and Saks Fifth Avenue stores (see related article, circa 1999, so this list may have changed somewhat). We don’t know if any other retailers use warehouse sales to move luxury product inventory. Our guess is that even if they haven’t in the past, you might start seeing them doing so now, as the economy continues it’s downward spiral. See this New York Times article about a disappointing holiday season for the nation’s retailers.

As the downturn of the U.S. economy continues, we think you’ll see indications that more and more retailers are in trouble, across the board. As we wrote yesterday, we doubt the U.S. economic stimulus plan that was announced yesterday will do much to stem the tide.

If the IRS hurries up with those tax rebate checks, perhaps you’ll get yours in time to run down to the “Bloomingdale’s” warehouse fur sale and do your part to stimulate the U.S. economy. You’ll look stunning in that new chinchilla.

– RoutingByRumor

chinchilla.gif

Chinchilla

Aw, he’s sooooooooooo cute. Maybe we’ll get a faux fur coat instead.

 

2/26/2008 Update – Here’s more proof that high-end retailers are feeling the squeeze… This article from CNN indicates that Nordstrom’s sales were down almost 9% in the last quarter.

 

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Shrinking Products – Pay More, Get Less !

This is the first installment of what will be a continuing category of articles from RoutingByRumor. We will be documenting the most egregious examples of popular consumer products that are shrinking, being downsized or otherwise reduced in quantity or quality by manufacturers often employing “deception engineering” in an attempt to hide the changes from consumers.

Shrinking Product # 1 – Scott Toilet Tissue

Perhaps the most visible and distressing shrinking product category is paper products. Paper manufacturing requires large amounts of energy and water, and transportation costs represent a larger portion of the finished product’s price than most products. Because of their weight and bulk, paper products are particularly vulnerable to increased energy, transportation and raw materials costs.

The result has been ever decreasing quality and quantity of tissues, toilet paper and paper towels, to name just a few paper products. One of the largest manufacturers, Scott / Kimberly-Clark of Neenah, Wisconsin, has responded by a series of price increases and successive product downsizing.

Focusing on one Scott product, toilet tissue, we will examine some of the tactics Scott has employed in am attempt to camouflage the fact that you are paying much more for much less. One of Scott’s flagship products is the 1000-sheet roll of tiolet tissue. In the last few years, the retail price of a 1000 sheet roll of Scott toilet paper has roughly doubled, from about 45 cents (US) to about 90 cents. But the price increase only tells part of the story.

While Scott still advertises (in my opinion, deceptively) that it still contains 1000 sheets per roll, a roll of Scott tissue is substantially narrower and shorter than it was a few years ago. Since I started keeping track, the size of each individual sheet has gone from 4.5 x 4.4 inches (19.8 square inches), to 4.5 x 3.7 inches (16.65 square inches). Each time Kimberly-Clark has downsized the roll of ScottTissue, it has shrunk by almost ten percent. While I am not absolutely certain about this, I believe that if you go even further back in time, the standard toilet paper roll was 5 inches wide. I believe the tissue is substantially thinner, and in my opinion, much lower quality than it was previously. Another attempt to hide the reduction in quantity is to wind the roll on a much larger diameter paper tube, and to emboss the tissue, adding bulk without adding paper, so the outside circumference of the roll appears larger. Another indication of the decreasing amount of tissue on each roll is weight. Pick up a 6-pack or 12-pack of toilet paper these days, and it feels like it weighs perhaps half as much as it did a few years ago (some other brands are even worse).

In my opinion, the most insidious part of this is not that you are paying more per roll. It’s that because you are getting less in each roll, they are forcing you to buy more and more rolls (assuming that your consumption remains constant). It’s like the oil companies figuring out how to produce gasoline that provides lower and lower miles-per-gallon, forcing you to fill up more often, on top of the fact that the price-per-gallon keeps going up! Reducing a product’s size or yield masks the true extent of a price increase.

You are paying about double, but qetting 15-20% less than you did a few years ago, of a product I believe is substantially lower in quality. While Scott does not disclose the percentage of recycled fibers in their toilet tissue (or in any of their other products, to my knowledge), I have to believe their toilet paper is either made from 100% recycled paper, or it is made from predominately recycled fibers. I base this conclusion partly on the fact that when it comes in contact with water, it disintegrates instantly. I believe that is an indication that the length of the cellulose fibers is extremely short, and indicative of recycled fibers.

Of course, the proof is in the pudding, as the saying goes. Without getting too graphic, I believe the efficacy of Scott toilet tissue has decreased substantially as a result of Scott’s tinkering with the recipe, if you will. Certainly, there is a lower limit, at which a product’s size, quality and value will drive consumers to choose a competing product. My guess is that for some consumers, that limit has already been reached by Scott / Kimberly-Clark. I guess manufacturers try to find out what that limit is, without exceeding it.

Here’s some photos of the “Incredible Shrinking Roll” of ScottTissue.

(Note that the most recent wrapper below no longer unequivocally says “Made In USA”, but rather states “Made in USA of domestic and imported materials”, and fails to provide further details as to what percentage of the product is domestically sourced.)

scott-45x44.jpg
1000 sheets @ 4.5″ x 4.4″ = 137.5 square feet scott-45x40.jpg
1000 sheets @ 4.5″ x 4.0″ = 125 square feet

scott-45x37.jpg
1000 sheets @ 4.5″ x 3.7″ = 115.2 square feet

LATE BREAKING NEWS…

Dateline: June 8, 2008

CVS Stores has just beaten Scott Paper in the race to create the world’s smallest roll of toilet paper.  Read all about it here.

– Routing By Rumor

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eBay – A Buyer’s Market or a Seller’s Market?

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I love eBay. I hate eBay. I’ve used eBay since 1999.

If you are looking for a hard to find, vintage, used, discontinued or rare item, eBay is the first place to look. If you want to find the latest tech gadget at less than retail, check eBay first. A lot of people won’t even consider buying something online or at a “brick-and-mortar” local retailer without checking the price on eBay first.

With all those “Get Rich Selling On eBay” books and seminars out there, you would think everybody could quit their day job and watch the money pour in when they become an eBay seller. Don’t bet on it. Most eBay sellers hardly make enough to make it worthwhile. When you factor in the amount of time you have to invest to set up an auction, respond to buyer’s questions, deal with deadbeat bidders, and pack & ship the item, and the cost of eBay’s and PayPal’s fees, it’s hard to make a profit. Meg Whitman, eBay’s CEO, and eBay’s stockholders have made fortunes on eBay. If you want to make money on eBay, buy some eBay stock rather than trying to sell on eBay.

eBay has incrementally introduced new features over time that makes it a more secure and useful platform, but eBay has also devolved into an uneven playing field that benefits few but eBay itself. In category after category, you have sellers selling items for pennies, but charging outrageous amounts for “shipping”. Even the majority of sellers who aren’t selling through “Buy-It-Now” auctions for $0.01 are still inflating their shipping charges to try and make some money. This is especially true with sellers from countries like Chins, which have become a larger and larger presence on eBay.

I’ve seen it over and over again… For example, very small items selling for a few pennies, but with a $29.00 shipping fee. Shipping that will cost the seller anywhere from a first-class postage stamp to perhaps a dollar or two. Few buyers or sellers seem to care much about the practice, and eBay is certainly not complaining. There is so much competition between sellers that they all have to resort to this tactic. eBay actually helps sellers inflate their shipping fees by allowing them to build their margin into eBay’s auction shipping charge calculator.

Why is this happening? eBay does not charge a commission (final-value fee) for shipping charges assessed by a seller, so sellers shift all or most of an item’s cost to the shipping fee. eBay appears to have made no serious attempt to curb this practice. Why? I think it’s because eBay also owns PayPal, the bank thru which the vast majority of eBay transactions are paid for. If eBay doesn’t get their cut thru auction fees, it will still earn it’s money through PayPal fees.

If you’re looking for a bargain on the latest high-tech gadget, I doubt you’ll find a bargain on eBay. Items that are in demand usually sell for prices close to retail, especially when you add in the “shipping” charge. Most eBay sellers will not accept returns or issue refunds. Many manufacturers will not honor rebates or warranties on items purchased thru online auctions. While most sellers do a good job of describing an item and it’s condition, some do not. Some are deceptive.

For items like used or out-of-print books or DVDs, eBay is great, and there are many bargains available. I think eBay has done more for the environment by keeping stuff out of landfills than any recycling program has ever done. If you want to get rid of it, don’t throw it out. Put it on eBay.

One of eBay’s strengths is it’s feedback system. I like the very democratic rating system, where buyers get to rate and comment on sellers and vice versa. It encourages people to treat other eBayers they deal with fairly. It also holds you hostage to some extent. You have to avoid giving negative feedback to someone you’ve dealt with, even if it is justified, for fear of receiving retaliatory negative feedback. The feedback system is a double-edged sword.

…When I continue, I’ll discuss some of the issues I’ve touched on in greater detail.

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Sandisk Sansa vs Apple iPod – And The Winner Is…

We purchased an identical set of Sandisk Sansa m240 (1GB) MP3 players in November, 2005. These alternatives to the iPods that most of the world has fallen in love with were less expensive than an iPod of the same capacity, and had some nice features such as an FM radio and voice recorder.

I had problems with the m240s as soon as I started loading music onto them. There were two issues in particular that were particularly problematic. Some album tracks would play in the wrong order (with shuffle turned off), and when I loaded a large number of albums or audiobooks, many files would disappear. They were there when you viewed the contents of the players via a PC, but once you disconnected the sansa from the computer, it could not find the tracks. The shuffled track issue might not be the end of the world when you’re listening to your favorite album, but it is unacceptable when you are listening to audiobooks. Some audiobooks have more than 1,000 tracks, each of which are a few minutes long.

I communicated the problems I was having to Sandisk’s tech support people, who assured me that firmware updates would solve my problems. They did not. I went back and forth with Sandisk via their website, via e-mails and by phone over a period of about six months. I spent hours upon hours editing the ID3 tags in the albums, podcasts and audiobooks I was loading onto the Sansa, to no avail. It did not matter whether files were .mp3 or other formats. The Sansa would still shuffle some tracks. I tried applying several firmware updates. I tried resetting the Sansa. I tried loading different files. I tried using a different USB cable. Nothing helped.

Dealing with their support people was frustrating and infuriating at times. They seemed to be in denial when it came to the issues I was reporting, despite the fact that I found other Sansa owners on the Web who posted identical issues with their Sansas. I would provide Sandisk with details on how to reproduce the problems I was experiencing, but couldn’t get them to acknowledge the problems. They had me doing things that they should have been doing themselves, like preparing sets of test files and sending them to their tech support people. I also came away from the experience questioning whether Sandisk designed and produced the Sansa product line in-house, or whether they are branding someone else’s players with the Sandisk name. I say this because Sandisk seemed to be unable to address problems with the Sansa. It seemed to me like they may be dependent on a third party for resolving those issues. Overall, I would rate Sandisk’s support as poor.

I guess they finally had enough of my calls and support requests, because a senior technician that I was dealing with finally acknowledged they did not have a fix for the problems. They offered to replace my players with another Sansa model, the e250 (2GB), which they assured me would solve the problem. I took them up on their offer, but while I was waiting for them to send me the replacement Sansas, I found reports that owners of those Sansas had posted to various websites, indicating that there were problems with the
Sansa e200 series also. (Actually, Sandisk doesn’t even handle product returns. They have you send the defective products to a third party.)

When I received the replacement players, I decided to sell both of them rather then open the packages and see for myself whether I’d have the same problems with the e250’s as I did with the m240’s. I had little faith in their tech support, and just wanted to find another brand of MP3 player that worked correctly. I was not impressed with the quality of Sandisk’s support, and upset about the amount of time wasted trying unsuccessfully to resolve the problems with their product.

I’ve always been an IBM-compatible PC and Microsoft DOS/Windows computer user. I’ve never owned or used an Apple Macintosh, but I was aware that Mac devotees consider Windows-based PCs to be inferior to the Mac. Status symbols have never been real important to me. I also tend to root for the underdog, whether it’s in politics or MP3 players. I don’t like to pay a premium just so I can have the most popular brand of anything. On the other hand, I knew there were reasons why people love their iPods, and I knew that the iPod’s popularity wasn’t just because of the Apple mystique, but because of the design superiority of Apple products.

I considered buying one of the Microsoft Zune MP3 players which had just been released, but was unimpressed with them. I thought the (first generation) Zune was expensive, large, ugly, received lukewarm reviews, and it was (at the time) version 1.0 of a Microsoft product, which I’ve previously mentioned should always be avoided.

 

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I ended up buying a second generation Apple iPod nano (2GB) in November, 2006. I feel like kicking myself for not buying an iPod in the first place. I’ve had no significant problems with the nano in the year since I bought it. Sure, there are some minor problems I’ve come across, mostly involving Apple’s iTune’s software, rather than with the software inside the nano (the firmware). To be fair, there are iPod owners that have posted some serious problems on various websites, so the iPod is not completely problem-free. However, everything you read about the iPods are true. They have better user interfaces than the competition, whether it’s a scroll wheel model like the nano, or one of their newer touch screen devices such as the iPod touch. Apple is known for their superior design features and the materials they use in their devices, such as aluminum cases. I did give up the FM radio and voice recorder features of the Sansa, which the nano does not have, but I gained an audio player that works correctly. I would have preferred the nano to have an easily replaceable battery, but none of the iPods have easily user-replaceable batteries. Apple wants you to return the iPods to them for battery replacement, if it becomes necessary. Fortunately, there are alternatives… do-it-yourself replacement battery kits, and third party service companies that do iPod repairs and battery replacements.

Now, I want one of the new third generation iPod nanos that play video, and come in memory capacities up to 8GB. Then again, the iPod touch would be even nicer. Maybe Santa will bring me one for Christmas. I guess Apple has spoiled me for anything else, because I would probably never consider purchasing another brand of audio or video player.

So, as you’ve figured out by now, in the Sansa vs iPod contest, as far as I’m concerned, the clear winner is: The Apple iPod.

Who knows… Maybe my next computer will be a Mac.

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Still Waiting For That Rebate Check? Don’t Hold Your Breath If Staples, Symantec or Parago Are Involved !

I’m a sucker for almost anything that comes with the promise of a rebate, particularly technology products. The phrase “FREE AFTER REBATE” is music to my ears, even though this is never quite true when you take into consideration the sales tax, postage, and other costs associated with filing the rebate claim.

Rebates were the one saving grace for a retailer that I thought was otherwise worthless, CompUSA. Most of the CompUSA stores in the USA have closed within the past year, and  I suspect they will disappear completely in short order. The funny thing is, I’ve never come across anyone who was sorry that a CompUSA store closed. I’ll usually hear comments like “I can’t believe they lasted as long as they did”.

I’ve been running into a problem receiving rebates I’ve qualified for on a number of products I’ve purchased at Staples stores recently. Most often, they have been rebates on software titles from Symantec. The common thread with all of the rebates I’ve had trouble getting my rebate checks for is that they are fulfilled by a company called Parago. Quite frankly, I have a pretty good nose for this stuff, and I smell a scam. It wasn’t always this way. In the past, Symantec rebate checks always arrived quickly and without a problem. I could always depend on receiving my check within a few weeks, which was much quicker than many other manufacturer’s rebates, but things have changed.

I meticulously follow the requirements of each rebate offer. I’ll include the UPC barcode, proof-of-purchase seal (if applicable), cash register receipts, product registration requirements, proof that I qualify for rebates available only to owners of previous versions or competitive products, etc, etc. I double and triple check everything, including the offer expiration date. Then I make copies of everything I submit. I double check the postage and the addresses.

At least half of the time, I’ll get a postcard from Parago telling me that I did not qualify for the rebate, listing one or more bogus reasons. Funny, but when I check my copy of the material I submitted, I do qualify for the rebate, and I’ve submitted whatever it is that they say was missing from my submission.

Read this: “The Great Rebate Runaround”, published by Businessweek.

Here’s a story about Parago posted by another consumer, who has had the same experience with Parago.

Here’s another.

I’ll call the phone number listed on the postcard, and I’m forced to navigate thru several menus before I can press the appropriate key and speak to a real live human being (or wait on hold until one is available).

Each time I’ve called about a rebate submission that was rejected,  the person taking my  call will take a few seconds to look over whatever records they have on their computer screen, and then announce that it was their mistake, telling me I will receive my rebate in a few weeks. Sure enough, about a month later, my rebate arrives.

What’s going on here? Let me take a guess. I think that either the retailer, in these cases Staples, or the manufacturer, in these cases usually Symantec, or more likely the rebate processor, which in every case has been Parago, has figured out how to make money. Conveniently manufacture a bogus reason to disqualify the rebate claim, and hope that the customer doesn’t pursue the matter. If the customer does complain, just say “oops, our mistake… so sorry… we’ll get that check out to you in a few weeks”. If this is indeed what is happening, it’s fraud, and it’s a crime. Could you imagine how much money is at stake if even a small percentage of the rebate submissions never get paid out? And this is on top of the fact that most rebates are never claimed by consumers to begin with.

Here’s an article on zdnet.com, that discusses the fact that Parago has actually patented ways to reduce the number of rebates it has to pay out to consumers. This is disgusting. It’s like being admitted to a hospital that has patented ways of killing it’s patients. It’s like a restaurant that tries to give their customers an empty plate. You can’t get away with it for very long. I think the fulfillment industry is going to destroy itself, just as the telemarketing industry did, by abusing the public to the point that legislation was passed which created the U.S. Government’s Do-Not-Call list. Americans who were sick and tired of being harassed by telemarketers have placed almost 150 million phone numbers on the DNC Registry. Telemarketers killed the goose that laid the golden egg. They have nobody to blame but themselves. The government recently decided to make DNC list registrations permanent. Good !

It appears to me that job #1 at rebate processors like Parago is not to get your rebate check to you quickly. Rather, their first and highest priority seems to be finding any way possible to avoid honoring a rebate offer. Who in their right mind would want to do business with a company whose goal, it seems,  is to cheat you out of what they owe you? If a lot of companies offering rebates were being honest with their customers, I think their products would carry stickers such as this…

“$50 MAIL-IN REBATE, BUT WE WILL DO EVERYTHING WE CAN TO ENSURE THAT YOU WON’T QUALIFY FOR THE REBATE”.

Manufacturers or retailers who employ rebate processors that attempt to prevent as many consumers as possible from collecting their rebates are shortsighted indeed. It’s not the consumer who stands to be hurt the most by these practices. It’s the manufacturers themselves, and the rebate fulfillment companies who are destroying the consumer’s trust in rebate promotions. Successful companies don’t have to pinch their customers to make a profit.  Throwing up as many barriers as you can, forcing your customer to jump thru hoops and clear hurdles before they will get their rebate is simply not good business.  These types of practices are a sign of greed or desperation, by companies that are willing to sacrifice future income and goodwill in the name of a fast buck.  It’s simply not the way an ethical company operates.

Now I know what you’re saying. You’re saying “why should we believe anything that RoutingByRumor says. Who the hell is RoutingByRumor anyway?” In that case, don’t take my word for it. Parago holds at least five U.S. patents, which can be viewed here. Among them is Patent # 7,146,328, which contains a number of claims, including the following…

“Rebates offer cash back to consumers who fulfill a set of requirements after purchasing a product bearing a rebate. By requiring post-purchase activities, the rebate offerer attempts to reduce the number of successful rebate claimants. Breakage occurs when a product bearing a rebate is sold, but the rebate is not successfully claimed.”

“Breakage refers to any event that prevents a rebate transaction from being completed, for example, denying based on bad verification materials such as receipts or UPC symbols, denying based on improper purchase dates or purchase price, or slippage from checks issued but not cashed.”

The patent also boasts that Parago’s system “provides opportunities for breakage”. Based on my experiences with Parago, I’m surprised it doesn’t say that their system “guarantees that breakage will occur”.

I have sent complaints to both Staples and Symantec about the difficulties I’ve had with rebates processed by Parago. Sadly, but not surprisingly, neither Staples or Symantec responded to my complaints. My guess is that retailers like Staples, and their vendors, such as Symantec, actually want Parago to mail out as few rebate checks as possible. If this is not the case, then they need to contract with a different fulfillment company. In my opinion, if companies like Staples and Symantec are involved in this practice in an attempt to avoid having to pay valid rebate claims, they should be prosecuted. I believe that a rebate offer is a contract between the buyer and the party offering the rebate. A class action lawsuit might be in order. Perhaps it’s time to stop buying products offering rebates.

If Parago CEO Juli Spottiswood (see nbpca article), Staples CEO Ron Sargent (see Forbes article), or Symantec CEO John Thompson (see Forbes article) wish to comment on this article, RoutingByRumor will post their comments here. If you click on the links to the Forbes articles above, you can see the incredible compensation these CEOs receive, made possible by your purchases and by all those rebates you thought you were getting, but never received.

If you have experienced this or similar problems trying to collect a rebate, post the details of your experience here, or e-mail them to me. If I receive a response to my complaints to Staples or Symantec, I will post the details, but I’m not holding my breath.

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