Andrew Harrer/Bloomberg via Getty Images Preet Bharara, U.S. attorney for the Southern District of New York.By Emily Flitter and Nate Raymond
NEW YORK -- U.S. authorities arrested seven people Tuesday for what they said was a multimillion-dollar scam by a debt collection company that victimized more than 6,000 people, and a prosecutor said a wider crackdown was underway.
Williams Scott & Associates wrongly threatened people with arrest, used aliases such as "Investigator Ace Rogers" and tried other tricks to collect at least $4.1 million from consumers whose debt it bought for pennies on the dollar, prosecutors said.
The company was owned by John Williams of Norcross, Georgia, who authorities said went on to operate a new debt collection business using the same tactics after the FBI conducted a search of its office in May.
A criminal complaint filed in Manhattan federal court charged Williams, 48, the company and six employees with conspiracy to commit wire fraud in connection with the scheme, which had run since 2009.
Manhattan U.S. Attorney Preet Bharara said the case was an example of "an absolute epidemic of abusive debt collection practices."
We are far from finished looking at the seedy side of debt collection.
Bharara said he reached out to the Consumer Financial Protection Bureau and Federal Trade Commission about bringing more cases as part of a broad crackdown and was also looking into creditors who assign debts to abusive collectors.
"We are far from finished looking at the seedy side of debt collection," he said.
Others arrested included employees Benita Cannedy, Rudy James, Arthur Cook, Christopher Lenyszyn, Clark Smith and Titus McDowell.
Lenyszyn's lawyer said he couldn't immediately comment, while attorneys for the other defendants couldn't be immediately identified.
The criminal case followed an earlier civil action by the FTC in which the company agreed to an order stopping it from collecting allegedly fake payday loan debts.
The criminal complaint said WSA employees using aliases such as "Mr. Cline" and "Investigator Ace Rogers" told victims that the "national check fraud center" had filed complaints against them and that they faced jail time.
To sound convincing, the employees read from a script containing phrases that sounded like official legal language, the complaint said.
"Failure to respond will lead to criminal charges being pursued," one line in the script read.
"It's a Class A felony pending against you for theft of property," another read.
The Williams Scott & Associates employees also told victims that WSA stood for "Warrant Services Association."
The case is U.S. v. Williams Scott & Associates LLC, U.S. District Court, Southern District of New York, 14-mj-2546.
Investors remained in a record-setting mood Tuesday, edging the Dow Jones industrial average (^DJI) and Standard & Poor's 500 index (^GPSC) to their latest all-time highs.
Pharmaceutical and medical equipment companies led the broad pickup in stocks, extending gains for the S&P 500 and Dow. The Nasdaq (^IXIC) notched its first gain this week.
A positive outlook from homebuilders and encouraging news from Japan and Germany also helped lift markets.
The rally builds on a market rebound in recent weeks powered by strong corporate earnings and easing concerns among investors about the spread of Ebola and economic growth overseas.
We've gotten good news on all of the worries since mid-October and we had much better-than-expected earnings.
"We've gotten good news on all of the worries since mid-October and we had much better-than-expected earnings," said Kate Warne, an investment strategist at Edward Jones. "As a result, it's not surprising we're seeing a series of record highs."
The major stock indexes opened flat on Monday, but quickly began to rise.
Germany's ZEW measure of investor sentiment showed an improvement in November after 10 months of declines, allaying worries about a slowing economy and lifting European markets.
Developments in Japan, whose economy slipped into recession in the third quarter, provided some relief.
Tokyo's benchmark Nikkei index rose 2.2 percent amid expectations, later confirmed, that Japan's government will delay a sales tax hike that was planned for next year.
U.S. stocks also got a boost from an increase in a measure of U.S. homebuilders' confidence, which rebounded in November as both sales expectations and buyer traffic improved.
The indexes continued to build on their gains throughout the day as investors piled into health care stocks. Pharmaceutical giant Actavis (ACT) led all stocks in the S&P 500, vaulting 8.7 percent. Medical device-maker Medtronic (MDT) climbed 3.3 percent.
The energy sector lagged the rest of the market as the price of oil resumed its slide.
All told, the S&P 500 index added 10.48 points, or 0.5 percent, to 2,051.80. Its previous closing high was set Monday. The Dow rose 40.07 points, or 0.2 percent, to 17,687.82. That's just 0.2 percent higher than its most recent record close last Thursday. The Nasdaq composite gained 31.44 points, or 0.7 percent, to 4,702.44.
Nine of the 10 sectors in the S&P 500 notched gains, led by health care stocks. The sector is up 23.5 percent this year. Telecommunications stocks declined.
On Oct. 15 the S&P 500 nearly fell into a "correction," a trading term for a drop of 10 percent or more from a recent peak. The market has mostly risen since then.
The rise in Actavis came a day after the company agreed to buy Botox-maker Allergan for $66 billion. Actavis rose $21.66 to $269.60.
"Actavis is up strong, so that suggests it's a better take on the merger deal, as people get more into the details of it," said Warne.
Medtronic shares ended up $3.28 at $72.47.
Investors kept rewarding strong company earnings.
Solar power products company JA Solar (JASO) jumped 8.8 percent after it reported better-than-expected quarterly financial results. The stock added 69 cents to $8.49.
Some companies' quarterly report cards failed to impress investors.
Urban Outfitters (URBN) fell 6.6 percent a day after the retailer reported third-quarter results that fell short of Wall Street's expectations. The stock shed $2.04 to $28.79.
Home Depot's (HD) third-quarter profit rose 14 percent, but the company said it couldn't account for all possible losses from a huge data breach it revealed in September. Shares in the nation's largest home improvement retailer fell $2.05, or 2.1 percent, to $95.98.
With the bulk of earnings season over, investors are looking ahead to how companies will fare this holiday season.
"The broad equity market is in holiday mode," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "I don't see the market moving meaningfully higher or lower in the near term until we get greater visibility on what consumers are going to do in the holiday season."
Market-watchers anticipate the slide in gas prices will prompt consumers to spend more in coming weeks. The average price of gasoline in the U.S fell to $2.89 this week, 33 cents below prior-year levels.
"That's a meaningful dip," Sandven said.
The price of oil fell on mounting evidence of a slower global economy and doubts that OPEC will decide to cut output when it meets next week.
Benchmark U.S. crude fell $1.03 to close at $74.61 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 84 cents to close at $78.47 on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX:
Wholesale gasoline rose 1.7 cents to close at $2.043 a gallon
Heating oil fell 2.3 cents to close at $2.381 a gallon.
Natural gas fell 9.7 cents to close at $4.244 per 1,000 cubic feet.
Gold rose $13.60 to $1,197.10 an ounce, silver rose 12 cents to $16.17 an ounce and copper fell four cents to $3 a pound.
The yield on the 10-year U.S. Treasury note slipped to 2.32 percent from 2.34 percent late Monday.
Among stocks making big moves Tuesday:
Nokia (NOK) rose 26 cents, or 3.4 percent, to $7.93 on news that the company plans to launch a tablet computer next year that will run on the Android operating system.
SunEdison (SUNE) surged 29.3 percent after the solar energy company agreed to buy wind energy company First Wind for more than $1.9 billion. SunEdison gained $4.87 to $21.48.
-AP Business Writer Joe McDonald in Beijing contributed to this report.
What to Watch Wednesday:
Lowe's (LOW) and Target (TGT) report quarterly financial results before U.S. markets open.
The Commerce Department releases housing starts for October at 8:30 a.m. Eastern time.
The Federal Reserve releases minutes from its October interest-rate meeting at 2 p.m.
arek_malang/Shutterstock
It's that time of year: pull out the gloves and winter coat, plan your holiday get-togethers with family and friends, and heed the warnings about running up too much credit card debt. I'll focus on that last one.
No matter how much money you have to spend on gifts, we all love those big signs advertising 30 percent off, 50 percent off or even more. But if it takes you many months to pay off the credit card bill, you might as well be shopping at the "I'll pay an extra 20 percent" rack.
"The goal should be to pay off the your credit card balances, if not immediately after the holidays, then within a few months," according to Linda Sherry, a spokeswoman for the advocacy group Consumer Action. "Gauge what your payments would be with the goal of paying it off by March, if you can't do it all in one fell swoop." If you pay off a substantial portion of the total bill, Sherry says your interest payments will be relatively small. But if you carry that debt for many months, the interest will continue to mount and negate a lot of the bargain price you worked so hard to find.
What Do Those Gifts Really Cost?
Let's say you splurge on a high-def TV and a trendy designer pocketbook, running up a credit card bill of $4,000. If you pay it off when the bill comes in, there's no interest. If you pay it off in three equal monthly payments at 12 percent, it will cost an additional $81 in interest; and if you pay $500 per month, it will take you nine months with total interest payments of $190 (assuming that you don't run up any additional credit card debt along the way). Play around with the numbers on free credit card calculators before making a big purchase to see how much it will cost you in interest under different payment scenarios.
If you miss a payment or fail to pay the monthly minimum, you'll be hit with a late fee of $25 to $35. And if you miss two months in a row, you basically go to credit card jail. You are then subject to a penalty interest rate that could top 30 percent. A Creditcards.com survey of leading credit card issuers found the average penalty interest rate is 28.45 percent. If you fall into that trap, the $4,000 of feel-good purchases would cost an extra $665 in interest over the course of a year.
If you know that you won't be able to pay off your bill in full, "it can be a good idea to take advantage of the auto-pay feature offered by your bank," said Matt Schulz, senior industry analyst at CreditCards.com. "If you set aside $50 or $100 every month and have the bank pay that automatically, it can help you avoid falling into the penalty trap." He says the penalty applies to both new and old purchases. "When you're hit with a penalty rate," says Schulz, "things can get out of control in a hurry." He says that once you fall into the penalty category, it will take you six months of making on time payments to be "cured" and escape the extremely high penalty rates.
Paying the Penalty
Fortunately, the number of people who fall into the penalty box has declined as the economy recovers and the unemployment rate falls. In addition, Schulz says the number of issuers who impose this penalty has declined since the Credit Card Accountability and Disclosure Act was passed in 2009. CreditCard.com says 60 percent of card issues impose penalty rates now, down from 91 percent in 2010. However, business credit cards are exempt from the CARD Act and are often subject to the harshest penalties.
So before you hit the mall or start buying online, Sherry suggests that you look over your bank account for the past six months to get a good idea of how much money was left over for discretionary spending -- and keep an eye on your current credit card balance. "Be frank with yourself about why you're using credit. Can you afford the purchase? Keep track of what you're putting on the card. It can get out of hand pretty quickly."
Income inequality. One percenters. The wealth gap. Unless you've been living under a rock lately -- or you avoid network news like the plague -- you're probably pretty familiar with these terms ... and the implication that true wealth in America is too exclusive for most of us to ever attain.
Well, the truth is you don't have to launch a blockbuster tech company, sport the last name Buffett -- or pursue the kind of career that could be featured in a Michael Lewis book. (Although let's be real -- those things don't hurt.)
It's a Matter of Control
What you do have to have? The right money mind-set, as well as the financially savvy habits that go with it. "The primary difference between the wealthy and the rest of us is that they're in control of their money -- they don't let money control them," says Jaime Tardy, a business coach and author of "The Eventual Millionaire," who has interviewed more than 150 millionaires on how they accumulated their wealth.
"They have taken the time to learn how to work successfully with money, and as a result, they are the captain of their ship," she says. "On the other hand, if you approach your finances from a place of fear or ignorance, you'll be like a boat floating around the ocean without a motor."
And that type of aimless attitude is what can lead you to make serious dollar-sucking mistakes - unless you learn to adopt some key good money habits of the wealthy.
So with that goal in mind, we rounded up the biggest financial blunders many people make - but prosperous folks avoid at all costs - so you can start to put their strategies into action to boost your own net worth.
1. You Refuse to Face Facts
If you're not a numbers person, it can be tempting to mentally cut yourself off from your finances, whether it's neglecting to stay on top of your investments or blatantly ignoring your bank statements. But that's a huge no-no - and those with sky-high bank accounts certainly don't amass big bucks by being blind to their balance sheets.
"If you don't have the facts about your financial situation, money will stream through your hands like water," Tardy says. The consequence? You could land in debt, make poor investments - or end up flat-broke when you retire.
The get-rich fix: "Some people assume that you have to be an investment banker to understand money, but the wealthy weren't born with some secret know-how-it's a gradual learning process," Tardy says. "If you're procrastinating about facing money because you're scared of what you'll find, you have to dive in. Even if it's not what you wanted to see, the truth will allow you to make decisions and move forward."
If you're starting from scratch, the first step is to gather some basic information from your bank account, like how much you earn and what you spend, so you can figure out what you're netting each month - and gauge whether your fiscal position is improving or getting worse. Once you have all the facts, you can start making thoughtful decisions about what you need to do in order to start growing your money.
On the other hand, if investing is your money blind spot, facing the facts might mean building up your knowledge base by listening to podcasts, signing up for a seminar or hiring a financial adviser. "Just make sure it's a trusted source," Tardy says. "Learn from people who are already where you want to be."
2. You Overspend
When you think about the type of lifestyles the rich can afford, you probably picture luxuries like a ski chateau in Chamonix or a closet full of Manolos. But wealthy people are more down-to-earth than you might imagine.
"Millionaires aren't out there buying Lamborghinis," Tardy says. "They make purchasing decisions based on their current financial status and their goals. They're rich because they're good at keeping money - not spending it."
The get-rich fix: Have your eyes started to glaze over from having the importance of proper budgeting hammered into you repeatedly? We get it. Despite their best budgeting attempts, some people still find it difficult to keep tabs on their spending.
Unfortunately, we can't give you a free pass to throw this crucial money to-do out the window - but Tardy does have a solution for making it a bit more bearable.
"Make budgeting a game by giving yourself an interesting new challenge every week," she says. "See how little you can spend on groceries, or even skip food shopping one week and invent meals using what you already have in the cupboards." The key is to identify the system (or mind trick) that you're most likely to stick with - and then do it.
3. You Neglect to Adjust Your Finances Following a Big Life Event
When you get married or a parent passes away, your bank account is probably one of the last things on your mind. But if you postpone adding your spouse to your will, canceling your joint account after a divorce or signing on to your new company's 401(k), your bottom line will take a hit.
"Successful people understand that every transition you go through has a financial implication - and they make sure to build a plan for those turning points," says Pete Bush, a certified financial planner with Horizon Wealth Management in Baton Rouge, Lousiana.
The get-rich fix: Whenever your life takes a turn in a new direction, find time to sit down, look at your finances and adjust them accordingly. "Think about it like football," Bush says. "The coaches have a game plan heading in. But let's say the quarterback, running back and linebacker get hurt in the first quarter and are out of commission. Their original intention is now irrelevant, and they have to come up with a new blueprint."
Money-savvy folks understand that even when you're in the midst of a big event -- like sleep-training your 6-month-old -- it's still important to consider your balance sheet ... and open that 529 college savings plan that will help you save up thousands of dollars for the big financial burden coming in 18 years.
"Life transitions have many different components to them: logistical, emotional, spiritual, familial and, yes, financial," Bush says. "Count the financial piece among the others and give it equal weighting. It may not be the most urgent, but at least if you recognize up-front that it's in the mix, you can make a plan to deal with it."
4. You Waste Cash on Fees
It's one thing to burn through $100 on a fantastic meal at your favorite restaurant. Hey, at least you enjoyed yourself! But it's entirely another to trash 100 big ones on overdraft fees or missed payments.
"The difference between wealthy people and everyone else is that the rich watch where their money is going, and they protect their wealth by making sure none of it slips through their fingers," says David Bach, vice chairman of Edelman Financial Services and author of "Smart Women Finish Rich." "Rich people will rarely be caught paying their bills late, bouncing checks or carrying a high-interest credit card because they hate to waste money."
The get-rich fix: Automate, automate, automate. We're only human, after all, and we're bound to miss a payment or overlook a bill at some point. So put safeguards in place that will lower the risk of those inevitable blunders.
"Set up auto-pay features to take care of your key bills - mortgage, car payment, insurance, credit cards," Bach says. "Late fees can add up to a fortune."
Of course, that also doesn't give you license to simply coast. "Rich people read their statements, checking regularly for mistakes," Bach adds. "They know that if they catch errors on their bills, they can call their provider and get them fixed ASAP."
5. You Focus on Saving More -- But Not Earning More
If you've decided that you need to scale back on your spending, and your first inclination is to sacrifice your daily Starbucks fix or unplug every electronic item in your house when you're not using them - stop right there.
Millionaires aren't in the business of wasting money, but they also recognize the greater importance of earning additional income as a way to attain financial goals faster. "[Wealthy people] understand that while there is a limit on how much you can save, there is no limit to how much you can make," Tardy says.
In other words, even though slashing your expenses by $50 or even $100 a month will boost your bottom line a little bit - raking in thousands more from a salary bump will have a much greater effect.
The get-rich fix: If you're feeling a pinch, invest your time more wisely by seeking out ways to earn more. An obvious place to start is by examining your current salary. If you haven't asked for a raise recently, and know you're delivering value to your company, schedule a meeting with your boss to make your case for earning more.
Another strategy? Use the hour you would have spent researching the cheapest online purveyor of dish detergent to brainstorm ways to bring in a side income.
"The key is figuring out what skills you have that can be of value to others and then determining how to charge for that value, whether it is a side venture, helping a friend with a project, or some other way of plugging into an opportunity of trading your value for [someone else's] money," Bush says.
6. You Obsess Over Price- -- and Sacrifice Value
Sometimes our frugal intentions end up sabotaging us: You buy cheapie $50 shoes instead of a good-quality $200 pair that will last longer. Or you make repeated repairs to your gas-guzzling, circa 1992 station wagon rather than spring for a new model. But rich people know better.
"Wealthy people understand that the cheapest route isn't always the most valuable," Bush says. "They are able to take the long view and consider how what they pay today compares with the worth over time."
The get-rich fix: Part of the solution is changing your mind-set from "find the rock-bottom price" to "find the best value." Then do the math.
"Take the 'bargain' and 'value' options of whatever you're looking at-a mortgage, car loan, etc.-and run the cost out over a reasonable time for that transaction," suggests Bush. "Compare them both ways, taking into consideration your cash flow, and see which works best for your situation."
So let's say a car dealership offers a low rate or 0 percent interest if you finance a vehicle over three years versus a higher rate for five years. If you plan on keeping the car for seven to ten years, what is the total price of owning it over that time frame? The longer you finance something, the lower the monthly payments-but the more it costs over time. So it's not as much short-term pain, but it gives you less to build savings with over the long term.
Also, remember that enlightening experiences are inherently more valuable than material goods. "Once you have an abundance of stuff, you quickly realize that you don't need more of it," Tardy says. "Millionaires understand that valuing the experiences that change you as a person-be it travel or skydiving-will do more for you than just getting the iPhone 6, when the iPhone 5 worked just as well." (By the way, Tardy knows several millionaires who still have the iPhone 4.)
So start paying attention to what you are doing when you feel happiest and most alive-and put your financial efforts into creating more of those moments.
Konstantin Sutyagin/Shutterstock
Many people have trouble thinking about taxes until the last possible minute. But you still have some time this year to do some do some things to cut your taxes next April.
The tax-loss harvesting strategy allows you to recover at least part of your losses from a bad investment by allowing you to claim a tax loss when you sell. But if you still believe in the long-term prospects for the stock in question, then there's a catch that snags many taxpayers by surprise -- and can end up costing you more than the tax break you get if you're not careful.
Understanding Capital Losses and the Wash-Sale Rule
In general, whether the price of a stock you own rises or falls doesn't matter as long as you own it. Dividends, interest payments and other income might get taxed, but the paper gains or losses on a stock don't affect your tax picture unless you decide to sell your shares. Once you sell, though, you'll generate a taxable capital gain or loss, depending on whether the stock has risen or fallen in value since you bought it.
If you've lost money, you can use the resulting capital losses to offset capital gains on other stocks you sell. In addition, you can use up to $3,000 of any remaining capital losses as a deduction against other types of income, including interest and even wage or salary income. Judiciously taking capital losses can save hundreds or even thousands of dollars on your tax return.
To claim a tax loss, though, a couple of things have to happen. First, you have to sell the stock before the end of the tax year, which for nearly all individual taxpayers is Dec. 31. Second, you can't buy back the stock until more than 30 days have passed after your sale. If you do, then you trigger what's known as the wash-sale rule, and you can no longer deduct the tax loss on your return.
The wash-sale rule prevents you from simply selling the stock and immediately buying it back, instead forcing you to go at least a short period without owning the stock. In many cases, that's not a problem, because you might not actually want to own that stock after its big loss. But if you think the stock will recover, some additional timing considerations come into play.
Seasonality's Greetings?
One phenomenon that many investors have noticed is that losing stocks often seem to lose even more ground toward the end of a year, only to pop upward at the beginning of the following year. Some analysts believe that this behavior is linked to tax-loss harvesting. Those who wait until the last possible moment to sell their losing stocks make their trades in December, and then have to wait until late January to buy them back. If the price has risen in the meantime, then it can mean missing out on share-price gains that would have been even larger than the amount of the tax break you receive.
This seasonal phenomenon doesn't happen every year. But even when it does happen, there's an easy way to beat it or even take advantage of it: Get your tax-loss harvesting done early.
For instance, if you sell stocks now, you'd be able to buy them back in late December, after more than 30 days. By then, you might be able to pay a lower price than you receive now, if further tax-loss selling activity depresses share prices further. By getting a jump on the crowd, you can benefit at their expense.
Losing money on investments is never a pleasant thing. But tax-loss harvesting can at least let you get a silver lining from your losses -- and using the strategy the right way can help you avoid what could become an even more costly mistake.
Motley Fool contributorDan Caplingerbelieves in making the best of any losing situation. You can follow him on Twitter@DanCaplingeror onGoogle Plus. To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
Gift cards will be the most requested gift this holiday season for the eighth consecutive year, the National Retail Federation reports. Unfortunately, this also creates an opportunity for fraudsters who want a piece of an industry worth hundreds of billions of dollars per year.
Just ask James Bregenzer, 32, of Chicago, who purchased a $500 airline gift card as a Christmas gift a few years ago for his mother who was planning a trip to Disney (DIS) World. After he brought the gift card home from the grocery store where he purchased it, he noticed the PIN area on the back of the card was scratched off, so he called the airline. "[I asked] if there was any way they could exchange my gift card for a new one, use it to purchase a new one or otherwise protect my purchase with the potentially compromised PIN," he says.
The airline said there was nothing it could do for him and suggested he use the gift card immediately while it still had its $500 value, but his mother didn't know her travel dates yet, and he wanted to save the gift for Christmas. "Sure enough," he says, "when she tried using the card just a week later, it had a zero balance."
Watch Out When Buying or Redeeming
Gift card fraud can happen when a gift card is purchased or redeemed, according to Pete Kledaras, chief risk officer at CashStar, a gift card platform that works with hundreds of major retail brands. Thieves can purchase a physical or digital gift card using a stolen credit card or simply steal the gift card number and PIN and leave the physical gift card. In the latter case, thieves will typically use the balance themselves. "Once cards are stolen, there are any number of ways that thieves can turn that into money for themselves," Kledaras says. "They can resell them on the secondary market, or they can go into the store and purchase physical goods that they can sell."
Another example of gift card fraud is when a thief tries to return stolen merchandise, and the retailer issues a gift card as a refund. "The criminal is getting $75 cashback from an item that they never purchased in the first place," says National Retail Federation spokeswoman Kathy Grannis. Then the schemer might turn around and sell that gift card for cash on a secondary market such as eBay (EBAY) or a specialty gift card resale site.
To make sure you don't become a victim of gift card fraud this season, follow these tips.
For the Giver
Only buy from trusted sources. Gift card resale markets offer gift cards for less than the face value of the card, but not all of them guarantee the stated value. For example, if the original purchaser still has the gift card and PIN, he or she may be able to use the gift card online even after selling it. Or, if the retailer discovers the gift card was purchased using a stolen credit card, it can cancel the gift card. To avoid these potential issues, Kledaras recommends buying directly from the retailer issuing the gift card. "If you want to buy a Best Buy gift card, it's best to buy it from Best Buy," he says.
Watch for signs of tampering. In the past, Grannis says thieves would walk into stores and write down the numbers of the gift cards on display. "Since that was first discovered, large retailers have taken steps to remove any opportunity for criminals," Grannis says, explaining that cards are now usually in plastic casing. If a card is not in plastic casing, make sure the PIN hasn't been scratched off, as Bregenzer learned. Digital gift cards are also becoming increasingly popular and don't have potential for physical tampering.
For the Recipient
Register your gift card. Some retailers, including Crate and Barrel and Starbucks (SBUX), allow gift card holders to register their gift cards and protect the balance in case the card is ever lost or stolen. Not all merchants have this option, but if yours does, it's a good idea to register the card just in case.
Treat gift cards like cash. Many states prohibit gift cards with expiration dates, but it's still a good idea for the recipient to use the card sooner rather than later. This helps not only to prevent fraud, but also to avoid losing or forgetting the gift card. "It's like having cash sitting on a table," Kledaras says, "and you want to use it before something happens to it." In fact, advisory company CEB estimates that over a billion dollars in gift cards were unredeemed in 2013. So it's better to get the value out of the gift card now than later, when the retailer may be out of business or you misplace the gift card.
Supermarket loyalty programs combine the approach of old-fashioned couponing with our obsession to receive rewards and build up points, such as frequent flier miles, hotel rewards and gas rebates. However, rewards cards have their critics, including a consumer advocacy group that claims loyalty programs are an invasion of privacy.
U.S. consumers spend upwards of $550 billion annually on groceries, making it understandable that people want to save money with points cards. But are they worth it? Does remaining loyal really save us cash? And is Big Brother really watching us from our shopping carts?
Advantages of Supermarket Loyalty Programs
Advantage cards or club cards, as they're sometimes called, emerged in the late 1980s as an alternative to traditional coupons, saving stores paper and printing costs, and customers the hassle of cutting, snipping and carrying them. According to the 2011 Colloquy Loyalty Census, there are more than 2 billion loyalty program memberships and counting, including hotel, supermarket, airline and financial services discounts.
The survey group believes that the last decade's recession might have played a part in the jump in loyalty card memberships because people were looking to find savings wherever they could. By 2010, the census noted, there was a 28 percent growth of loyalty memberships, totaling 173.7 million altogether. It's obvious that rewards programs are popular for good reasons, such as:
Convenience. Most supermarket rewards programs are free to sign up and easy to use. If you're a self-checkout kind of person, a rewards card is easily swiped like a debit card, eliminating the need for a stack of newspaper coupons. Think of it as loyalty through the miracle of technology.
Point building. On top of club card-only discounts, cardholders can rack up points to use toward future purchases in the store or out. Stores like Ralphs, Kroger (KR) and Safeway (SWY) have all partnered with Shell, offering several cents off the price of gas for every 100 points accrued through the program. Build up enough points on a card and use them as real, redeemable cash for groceries. (It's worth noting that everyone from CVS (CVS) to Starbucks (SBUX) and Home Depot (HD) offer similar points-per-purchase incentives.)
Real savings and deals: Let's say your average weekly grocery tab is $100, full price. Try shopping for only club card discount items -- often priced anywhere between 25 to 50 percent off -- and you could shave off a good $20 to $50 from your bill. If the savings are had from pricier brand names, even better. Plus, club sales are exclusive and can't be taken advantage of by non-club customers. If you tend to shop exclusively at a particular supermarket, a loyalty program will work well for you.
Practicality: Nothing is worse than holding a bundle of coupons for products we don't want. Many stores with loyalty clubs might send customers (through snail mail or email) coupons for the items they buy regularly, since our spending histories are tracked. If you're prone to stocking up on lima beans, flour or grapefruit juice, you'll most likely get to save on these items through your club card.
The customer tracking system has gone a long way for public health officials, too. According to a November 2011 report by USA Today, supermarket loyalty programs aided the Centers for Disease Control and Prevention in finding the source of 42 incidences of E. coli and salmonella poisoning across the eastern United States. Officials had determined where the contaminated foods had been purchased by accessing supermarket loyalty club records.
Drawbacks to Loyalty Cards
The tracking system goes beyond the sole customer; like a fluctuating market rate, it helps supermarkets determine what to line their shelves with and how much to charge. However, the system in place hasn't sat well with at least one consumer group, which says that supermarket loyalty cards are like something out of an Orwellian future world.
Many consumers don't mind giving away their addresses or phone numbers to a supermarket if it means saving on spare ribs, cereal or milk. But members of a group called Consumers Against Supermarket Privacy Invasion and Numbering, say that these steps are a form of profiling and an invasion of customer privacy.
The group and other opponents call loyalty programs a scheme and maintain that customers, for one, are forced into signing up, or else they receive no sales. Another contention is that by branding club members as loyal, other customers are essentially disloyal, and that, they say, is discriminatory.
Ethical concerns aside, there are some drawbacks to supermarket loyalty programs:
Perceived savings. Writers for The Street, citing the consumers' group, say that supermarket rewards cards are often the worst and least beneficial customer loyalty programs because savings to shoppers are negligible. They reported that products sold at major grocers with loyalty programs, like Kroger or Albertsons, tended to have inflated prices of 28 to 71 percent compared to card-free stores like Target (TGT).
Pressure to overspend. Citing Consumer Reports, The Street also reported that rewards programs do save money, but also woo customers into blowing their savings on higher-priced items, or buying additional products they don't want or need.
Too many cards and competition. After signing up for the seventh or eighth grocery store card, it can clutter your wallet and become tiresome to choose where to shop for the best savings. It's a simple business approach to keep stores competitive, but if customers can't decide where to place their loyalty, they'll instead shop wherever is most convenient, or at stores with already-low sticker prices.
Unavailable products. Some customers might receive coupons through their loyalty programs for products that aren't carried in the particular branch of their grocery chain, which defeats the purpose of signing up.
Colloquy, a research group, predicts that the respectable rise in supermarket cards won't slow, but won't rise much either compared to specialty retail, department stores and drug stores which carry niche or designer products not mass marketed at other retailers.
"The grocery industry is not expected to generate much more growth, in part because the sector is already saturated, but also because it has been slow to overhaul its customer-facing value proposition," stated Colloquy's 2011 report. "Grocery companies are using data better, but in terms of soft benefits and in-the-aisle value, they have a lot more ground to cover."
Based on Colloquy's statements, what could grocery stores do differently to expand their loyalty program base? Supermarket rewards will always have their supporters and their skeptics, but major grocery chains, to combat competition, could take new and creative steps to differentiate themselves from one another. That could mean lowering prices further, to unheard-of lows, to attract new customers and retain them.
Greg Allen/Invision/AP
Taylor Swift has a lot of fans out there, but Spotify isn't one of them. Her new album -- "1989" -- is a smash. The country singer-turned-pop star's new record came out late last month, selling more copies in its debut week than any record in the past dozen years. That's a meaty achievement at a time when the popular opinion is that folks aren't buying music anymore in this golden age of premium and ad-supported streaming services.
You can hear tracks from "1989," including the smash hit "Shake It Off," on radio stations and across many online platforms, but Spotify isn't one of them. Swift's camp decided to pull the album from the on-demand service, fearing that it will eat into sales.
The move appears to be paying off, and without the ability to legally stream Swift's album through Spotify, it may be making the purchase more compelling.
Swift Justice
"Everything new, like Spotify, all feels to me a bit like a grand experiment," Swift said in a Yahoo Music interview earlier this month. "I'm not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists, and creators of this music."
Knocking Spotify, while keeping her music on Pandora (P) and Apple's (AAPL) iTunes Radio, requires an explanation for those not familiar with the different platforms. Pandora and iTunes Radio work a lot like traditional radio. Listeners can suggest a track or artist -- like Swift or "Shake It Off" -- but then the songs that stream are merely similar to the input.
Spotify, on the other hand, lets listeners pick exactly the tracks or entire albums that they want to hear. Users can set up playlists, and even save them to stream offline.
Pandora and Spotify are popular. There are 76.5 million active listeners on Pandora. Only a few million -- just 2.5 million as of early last year -- are paying subscribers. The vast majority of those accounts enjoy Pandora for free, putting up with ad breaks and limited ability to skip songs. Spotify had just 40 million active users worldwide earlier this year, but it also had 10 million of them paying for premium commercial-free access.
Spotify Fights Back
Swift argues -- and perhaps rightfully so -- that keeping music off sites like Spotify that give potential buyers a reason not to purchase the music outright is the right strategy. Given the success of her latest album, it's hard to argue against her.
"There are many [many] people who predict the downfall of music sales and the irrelevancy of the album as an economic entity," she wrote in a Wall Street Journal op-ed this summer. "I am not one of them."
"Piracy, file sharing and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently," she continued.
Spotify counters that it would have paid Swift well if her album had taken off on its platform. It has paid more than $2 billion to labels, publishers, and collecting societies for distribution to songwriters and recording artists.
The $6 Million Woman
"Payouts for a top artist like Taylor Swift (before she pulled her catalog) are on track to exceed $6 million a year, and that's only growing," Spotify wrote in its official blog last week. "We expect that number to double again in a year."
Spotify also has a point. Unlike outlets that don't pay artists, Spotify is compensating artists for lost sales. It's not just about exposure. If a top artist will make $12 million a year on Spotify, that's not chump change.
Spotify had better make sure that it makes this point loud and clear. If more artists follow Swift's example, it may dissuade listeners from taking to on-demand music streaming sites. It can't "shake it off" at this point. Digital streaming sites were once disruptive, but they need to be careful if they don't want to be the disrupted.
Motley Fool contributor Rick Munarriz is no Taylor Swift. His bandParis By Airmakes mere pocket change on Spotify, but he's not going to pull his catalog from the site. It's all about reaching a global audience, a goal far different than Swift's aspirations. He has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Pandora Media. Try any of our Foolish newsletter services free for 30 days.
Consumers' misuse of Walmart's (WMT) price-match program isn't limited to the PlayStation 4. But shoppers may find it's no longer so easy to replicate the feat.
After Walmart announced Nov. 13 that it would price match select online retailers, including Amazon.com (AMZN), several customers used the program to buy $400 PlayStation 4 consoles for under $100 using fake Amazon listings. Twitter and Reddit users posted pictures of receipts documenting PS4 prices as cheap as $90.
Sounds like Walmart needs to trust, but verify.
"Sounds like Walmart needs to trust, but verify," said Edgar Dworsky, founder of advocacy site ConsumerWorld.org.
CNBC.com spotted more evidence of the fraud on Twitter on Wednesday, including more pictures of receipts for $90 PS4s and others for a $100 Xbox One console and games. But several users also tweeted pictures indicating stores are starting to pay attention. One showed an in-store sign stating that Amazon.com PS4 ad matches will no longer be accepted "due to fraud." Another user's picture showed updated match requirements, including listings sold and fulfilled by Amazon and verification for any "huge" price differences.
Walmart didn't immediately respond to requests for comment. But in an unfortunately timed announcement, the retailer said Wednesday that starting Nov. 21, it will match or beat select Black Friday offers from competitors -- including one on the PlayStation 4. (It didn't detail which retailer, or price, it would be matching.)
As CNBC.com reported earlier, any Amazon member with a registered selling account can create a product sale listing. Perpetuating the fraud requires only a screen capture of the listing to be shown at checkout to request the price match. Amazon didn't immediately respond to requests for comment about that capability.
Walmart is no stranger to price-match scams. Last year, residents in Michigan and Pennsylvania were arrested after they abused the retailer's price match and coupon policies. They used high-value coupons on lower cost items, netting cash "overages" under the policy.
Usually, it's not so easy to claim a price match. "It is generally a hassle because usually either the store clerk or the cashier is not authorized to approve the price match," said Dworsky. "You have to call over the store manager or a supervisor."
That's one reason it's rare to see shoppers making fraudulent matches, said Brent Shelton, a spokesman for deal forum FatWallet.com. "It takes a little work," he said. "You have to know what you're doing."
More common, he said, is taking advantage of temporary retailer loopholes, like a pricing error or vague policy wording.
It's only in the past year or so that stores have even begun accepting online prices for price-matching offers, but it's usually a select list of retailers rather than a blanket online match. (In 2013, Target (TGT) announced it would expand its policy to include Amazon.com, Walmart.com and others.) "The concern is, prices have a tendency to be cheaper online," added Dworsky.
Dave & Buster's (PLAY) latest tweet sparked a bubbling social media firestorm after users blasted its off-color pun on Tuesday.
On its official Twitter, the restaurant and entertainment chain tweeted, " 'I hate tacos' said no Juan ever #TacoTuesday #DaveandBusters." The company has since deleted the post.
Its followers were quick to blast the joke.
One user said, "Twitter Apology in 5..4...3..2...1" while another wrote, "Why do so many companies hire people who are completely tone deaf to handle their social media?"
About an hour after first sending the Tweet, Dave and Buster's apologized to followers.
We sincerely apologize for the tweet that went out today our intention was never to offend anyone please accept our apology
The restaurant is far from the first company to rub users the wrong way with social media.
Last year, AT&T (T) apologized to followers after its Sept. 11 Tweet honoring the tragedy drew widespread criticism for being too promotional. Meanwhile, Dutch airline KLM deleted a Tweet featuring a photo of a departure gate including a cartoon with a sombrero, mustache, and bandana, saying "Adios Amigos!" after the Netherlands beat Mexico in the World Cup.
Jeff Christensen/APTony Robbins wants to be the "face of the registered investment adviser business."
I am not a fan of most self-improvement gurus, but I admit to being jealous of their success. By some estimates, the self-improvement market is a $9.6 billion industry. You can seek to resolve your issues by studying books, videos, audio programs and infomercials; attending seminars, workshops and holistic institutes; and hiring personal coaches. Leading motivational speakers have become household names and enormously successful. At the top of the list is Tony Robbins.
The Flawed Premise of Many Self-Help Gurus
Unfortunately, many of the most popular self-help books are based solely on the views of the author, without reference to any data. Steven Novella, an academic clinical neurologist at the Yale School of Medicine, correctly observed that despite the ready availability of a vast amount of research dealing with the subjects discussed in self-help books, the big sellers "seem to be completely disconnected from that evidence. What they are selling are made-up easy answers, personality and gimmicks."
The "common hope" of these books, Novella notes, is the flawed view that you can materially improve your life by just thinking about better outcomes. Much of the advice is demonstrably wrong, but the message and the messengers are very appealing if you're looking for an easy solution to complex problems.
For more information about the myths of the self-help industry, I recommend Annie Murphy Paul's article in Psychology Today: "Self-Help: Shattering the Myths."
The self-help industry wants you to believe your lack of success is the consequence of not thinking positively. If you buy into this view, you are likely to blame yourself for events not within your control. Robbins -- who has been called the "mahatma of motivation" -- is among the most notable proponents of the power of positive thinking. In July 2012, he sponsored an event called "Unleash the Power Within" that caused 21 hapless souls (pun intended) to be treated for burns to the soles of their feet when they were encouraged to walk barefoot over hot coals.
There is little evidence supporting the view that "thinking positively" correlates with an ability to walk on hot coals without suffering injury. There is a considerable amount of research into the science of fire walking. It boils down to this: Wood that has burned down to coals is a poor conductor of heat. When a bed of burning coals is covered with an insulating layer of ash, you should be able to quickly scamper over it without suffering serious burns -- regardless of your mindset.
Robbins' Foray Into Investments
Notwithstanding my skepticism about the lack of scientific support for some of Robbins' self-help theories, I welcome his recent foray into the world of finance. According to an InvestmentNews article, Robbins "hopes to be the face of the registered investment adviser business." He has written a book, "Money: Master the Game" (which I have not read) and has become an advocate for the fiduciary standard that requires registered investment advisers -- but not brokers or insurance companies -- to always act in the best interest of their clients.
Robbins intends to educate investors and help them understand how the brokerage industry traditionally puts its own interests ahead of its clients. This is a very worthy goal. In addition, he is developing an "adviser master program" that will empower advisers and others in the financial industry with inspirational messages, similar to those he has provided to entrepreneurs and chief executives.
I wish Robbins well in this new endeavor. I applaud his efforts to protect investors. Maybe he can use his celebrity status to overcome the enormous advertising budget of the securities industry and the daily grist of misinformation disseminated by its cohorts, much of the mainstream financial media. Investors would certainly be the beneficiaries if he succeeds in spreading his message.
We may be strange bedfellows, but we are on the same side of this issue.
Daniel Solin is the director of investor advocacy for theBAM Allianceand a wealth adviser with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book is "The Smartest Sales Book You'll Ever Read."
Adam Berry/Getty Images
DETROIT -- Volkswagen is recalling 442,000 Jettas and Beetles to fix a problem that can cause rear suspension failure if the cars aren't fixed properly after a crash.
The recall covers 2011 through 2013 Jettas and 2012 through 2013 Beetles.
VW says in documents posted by U.S. safety regulators Wednesday that if rear trailing arms are damaged in a crash and not repaired correctly, they can fracture suddenly. That can cause loss of control and possibly a crash. Trailing arms connect the axle to the frame.
The company says there have been no crashes or injuries in the U.S., but there were reports of fractured trailing arms mainly in Asian countries.
Dealers will inspect trailing arms for damage and install sheet metal to help prevent a loss of vehicle control.
The sheet metal will be installed at no cost to customers, but customers will have to pay for repairs if their suspension was damaged, VW said.
Parts currently aren't available, but VW will notify customers to take their cars to dealers for a free inspection.
www.naturevalley.com
Maybe peace will fall over Nature Valley once again. A 2012 lawsuit has been settled between General Mills (GIS), which labeled items with high-fructose corn syrup as "100 percent natural," and the Center for Science in the Public Interest.
The settlement, announced Tuesday, prevents General Mills from claiming its Nature Valley granola bars, crispy squares and trail mix bars are "100 percent natural" if those products contain highly processed ingredients such as high-fructose corn syrup, high-maltose corn syrup and dextrose monohydrate, according to a statement from the Washington-based consumer advocacy group.
The settlement "helps nudge" the marketplace "awash in varyingly flimsy 'natural' claims, in the right direction," CSPI says.
That Label Is Gone
A company representative made it sound like the settlement is a non-issue. "We made changes to our label prior to the lawsuit," company representative Bridget Christenson wrote in an email.
That's news to attorney Steve Gardner, the CSPI litigation director, who told DailyFinance that he checked supermarkets before filing the suit and "saw labels with 100 percent natural on them."
"This is the first time I'm hearing that they changed at all. They did not raise it with any filing with the court," he said.
Gardner said he would have settled the suit earlier if the company had responded to his attempts to verify that package labels had been changed. He said he would have responded: "You changed. We got what we wanted. Let's settle it." In fact, the center's announcement of the settlement says it privately raised the issue with General Mills "as early as 2005."
In what amounts to a verbal shrug, Christenson said, "We don't always respond to CSPI. That is true."
Reed Saxon/APThe Hump Restaurant, located on the floor above the Typhoon Restaurant, in Santa Monica, Calif., as seen in March 2010.
A restaurant owner and his company pleaded guilty in federal court to serving sushi made of the endangered Sei whale, according to the Los Angeles Times. Brian Vidor and Typhoon Restaurant Inc. had each been charged with the unlawful sale of a marine mammal.
Vidor and his restaurant have accepted a plea deal that would mean splitting a $27,500 fine and respective 12-month and 18-month probation terms, should the judge agree with the arrangement.
Two sushi chefs, Kiyoshiro Yamamoto and Susumu Ueda, and the Japanese national supplier of the whale meat, Ginichi Ohira, have also pleaded guilty.
The news of whale meat on the menu first came out in 2010, according to CBS news, as part of a sting operation organized by the producers of the Oscar-nominated documentary, "The Cove." They sent two women into the upstairs portion of Typhoon, which was called The Hump at the time. The restaurant specialized in exotic seafood.
The women each took part in a $600 chef's choice menu and they requested whale. They kept samples that were later tested, showing them to have come from a Sei whale. The Sei is a protected species in the U.S., but the hunting and sale of whale is legal in Japan, according to the Huffington Post. Invoices listed the meat as "fatty tuna" and dishes using whale were not printed on the restaurant's menu.
Undercover agents from the U.S. Fish and Wildlife Service, U.S. Customs and Border Protection and National Oceanic and Atmospheric Administration then visited the restaurant, as the Times noted. While they sat at the sushi bar, Yamamoto left the restaurant, went to his car, and returned with a package wrapped in plastic. He said "in a hushed voice" that it was whale.
The Hump purchased whale meat from Ohira from 2007 to 2010, until the activity was uncovered. That restaurant closed in 2010 after news broke, although Vidor opened another restaurant in the space.
Ueda and Yamamoto cooperated with prosecutors, as the Times reported, and said that Vidor and restaurant manager Chris Schaefer were both part of a conspiracy to sell the whale meat. In February 2014, prosecutors recommended 200 hours of community service and a $5,000 fine for each of the chefs. Both are scheduled for formal sentencing on Feb. 23.
As part of his plea deal, Vidor admitted that he knew the chefs served whale. After being caught, he closed The Hump and posted a statement on the restaurant's site, calling the closure a "self-imposed punishment" and saying, in part, "The Hump hopes that by closing its doors, it will help bring awareness to the detrimental effect that illegal whaling has on the preservation of our ocean ecosystems and species."
seaworldentertainment.comA SeaWorld show called "One Ocean" stars killer whales.
SeaWorld Entertainment (SEAS) is all wet these days. Shares of the theme park operator hit a new all-time low last week after it served up another rough quarterly report. Folks just aren't visiting its gated attractions the way that they used to, and it's hard to deny that activists have succeeded in tarnishing the brand.
At some point SeaWorld has to ask if it's all worth it. Is keeping its iconic killer whales in captivity hurting more than it's helping? Could it stand to gain more than it would lose if it put an end to the orca shows and habitats? The synchronized leaps and refreshing splashdowns are crowd-pleasers, but the once-thriving chain appears to be losing more than it's gaining from its marine life shows and attractions.
Something has to change, because it's been more than a year since the "Blackfish" documentary drew attention to SeaWorld and the plight of killer whales held in captivity, and the public isn't showing any signs of letting that go.
Belly Flop
SeaWorld's third quarter was another disaster. Last week's report showed revenue falling 8 percent over the prior year to $495.8 million as a 5 percent dip in attendance combined with a 3 percent drop in revenue per guest. Adjusted earnings plunged 27 percent, falling well short of analysts' expectations.
This was SeaWorld's potent summer quarter, and it blew it. Attendance has been sliding for more than a year, and SeaWorld has now missed Wall Street's profit targets for three consecutive quarters.
Income investors have learned to overlook SeaWorld's professional shortcomings for the sake of a lofty dividend, but even those payouts may prove to be a challenge. SeaWorld can't declare the distribution that it was going to announce in December until early January. It has to do it this way so it doesn't violate debt covenants that dictate how much it can shell out in any particular year based on its performance. This should be a warning sign to anyone thinking that today's 5 percent yield will reward patient investors. If SeaWorld's performance continues to deteriorate, those fat dividends are unlikely to continue.
Tanks a Lot
SeaWorld thought it had the perfect compromise in August, announcing that it would expand its killer whale habitats. Activists have argued that the tanks are too small, but that will change in the coming years as the orca environment will have its capacity nearly double to 10 million gallons of total water volume. Viewing areas will also expand, giving guests the ability to enjoy the majestic splendor of Shamu and friends without necessarily checking out live performances.
The first of the makeovers will be completed in 2018 at the original SeaWorld San Diego park. The environments will then be updated at SeaWorld Orlando and SeaWorld San Antonio.
The new habitats and SeaWorld's decision not to appeal the Occupational Safety and Health Administration-fueled ruling to keep trainers out of the water during killer whale performances should have silenced the critics. However, SeaWorld doesn't appear to be bending enough. The August announcements didn't result in patrons lining up to enter its parks.
Attendance declined 4.1 percent across its family of parks last year, and it's off by another 4.7 percent through the first nine months of this year.
Shows Are the Main Attraction
Even if SeaWorld were to make a radical move by eliminating its killer whale performances, that might still not satisfy the naysayers. Before "Blackfish" we had "The Cove" wagging its finger at marine life parks for how performing dolphins are acquired. Would activists settle for SeaWorld eliminating the performances, keeping animals in natural habitats like the hundreds of zoos that line the country with more local support than critique? If the unrest doesn't settle soon and the turnstiles don't begin to click in the right direction again, that would be one option before eliminating the animal environments entirely.
Marine life shows are the main attraction at SeaWorld, and while one can argue that this would be the equivalent of Six Flags (SIX) scrapping its coasters, we've never seen an activist group demand that amusement parks set their roller coasters free. SeaWorld will need to keep bending, and hoping that it doesn't break in the process.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. He's a seasonal resident of Central Florida, living in Celebration -- near SeaWorld Orlando -- when he's not in Miami. The Motley Fool has no position in any of the stocks mentioned. Try any of our newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check outour free report.
With all the talk about Black Friday and Cyber Monday, you'd think most Americans would be revving up for a spending spree. But that's not the case, according to a Bankrate.com survey released on Wednesday: Most Americans will sit on the sidelines on two of the biggest shopping days of the year.
About 28 percent of Americans expect to shop at a store on Black Friday, the survey found. If you add in online shopping that day, about 40 percent said they would make some purchases on Black Friday.
But those who do expect to shop plan to plunk down a few hundred dollars apiece. The survey found that consumers expected to spend about $400 on average on Black Friday.
"Consumers are well-aware that deep discounts will be offered throughout the holiday shopping season," Bankrate.com analyst Jeanine Skowronski said. "They don't necessarily need to brave the Black Friday crowds to score them."
Millennials More Likely to Shop in Stores
About 25 percent said they would buy online on Cyber Monday. And, of those who said they would, spending was projected to be a bit less than those headed out on Black Friday -- $361 on average.
Another contrarian finding in the survey was that millennials, who are most closely associated with technology, are more likely to shop in stores than online.
One response that might concern consumer advocates was how those surveyed said they planned to pay for their purchases. About 43 percent of those who said they would make purchases online said they would pay with their debit cards -- a similar percentage as those who said they'd use credit cards.
"Online shopping is one of the riskiest ways to use a debit card," Skowronski said. "Credit cards offer better consumer protections. This is especially important given all of the data breaches that have occurred over the past couple of years."
Cassandra Hubbart/AOL
A scheme that dangled "free" access to credit scores but then slammed consumers with monthly fees that were tough to drop has been shut down by the Federal Trade Commission, the agency said on Wednesday.
Hundreds of thousands of consumers were taken in, the FTC said, and three companies involved have agreed to refund $22 million under a settlement with the federal government and the attorneys general of Illinois and Ohio. The FTC announcement did not give details about the refund process.
At least 50 sites promoted credit monitoring programs called MyCreditHealth and ScoreSense with the pitch of getting a free credit report and credit score. Among the sites that pitched the offer were FreeScore360.com, FreeScoreOnline.com and ScoreSense.com, the FTC said. The offers were heavily promoted in search engine ads with such claims as: "View your latest Credit Scores from All 3 Bureaus in 60 seconds for $0!"
Slammed With Charges
What consumers weren't told, the FTC said, was that those who signed up to get their credit scores would then be signed up for a credit monitoring service that would charge them every month -- and those fees proved difficult to cancel.
The FTC said at least 210,000 consumers contacted credit card companies, law enforcement, the Better Business Bureau and banks to lodge complaints about how they were duped into the recurring charges.
The companies were charged with violating federal consumer protection laws, the Restore Online Shoppers' Confidence Act -- a law that requires clear disclosure of the terms of an agreement when a consumer provides billing information -- as well as the Illinois Consumer Fraud Act and Ohio Consumer Sales Practices Act.
The charges were filed against One Technologies LP, also doing business as ScoreSense, One Technologies Inc., and MyCreditHealth; One Technologies Management LLC; and One Technologies Capital LLP.
What You Should Do
One way to avoid succumbing to such scams is to be aware that anytime you provide payment information, you run the risk of getting charged. Free trial offers that require consumers to include credit card or bank account information most often come with a catch.
The catch is that most of the time "free" isn't free. And, often, the terms include requiring the consumer to cancel within a brief period or charges will begin.
It will soon cost you money to check a bag on JetBlue if you buy the cheapest level of tickets.
JetBlue Airways (JBLU) said Wednesday that it will create three ticket classes beginning in the first half of 2015, and only the top two include at least one free checked bag.
JetBlue executives declined to give a price for the bag fee, but they said pricing would fluctuate with demand. They said fewer than half of JetBlue passengers check a bag.
The airline will also add 15 seats to its Airbus A320 planes, increasing capacity to 165 from 150, and reduce average legroom to 33 inches between rows from more than 34 inches. The retrofit of cabins will start in late 2016, take two years and still leave more legroom than in the main cabins of bigger airlines, JetBlue executives said.
JetBlue expects that the new fare classes and bag fees will generate more than $200 million a year in operating income, and the extra seats will raise another $100 million a year.
JetBlue announced the changes as it met with investors in New York. JetBlue has been under pressure from investors to boost revenue.
In afternoon trading, shares of the New York-based airline were up 55 cents, or 4.3 percent, to $13.27. They hit a 52-week high of $13.48 earlier in the session.
Other big airlines have added fees on checked bags since 2008.
JetBlue's move will leave Southwest (LUV) as the only large U.S. airline that allows all passengers to check at least one bag for free. Southwest CEO Gary Kelly has said the lack of bag fees has attracted enough additional passengers to more than offset money that would be raised by fees.
JetBlue also announced that it would delay 18 Airbus jets that were scheduled for delivery from 2016 to 2018 until 2022 and 2023 to cut capital spending by more than $900 million through 2017.
The news on fees and legroom comes just two months after JetBlue announced that CEO Dave Barger will step down in February and be replaced in February by the company's president, Robin Hayes. S&P Capital IQ analyst Jim Corridore praised Hayes on Wednesday, saying that the incoming CEO was showing a focus on boosting revenue and being careful on spending.
The U.S. airline industry is reaping huge profits due to full planes and modest increases in fares. Airlines have kept planes full and avoided profit-slashing fare wars by limiting their expansion plans.
WASHINGTON -- The banking industry seems to bring out dishonesty in people, a new study suggests. A team of Swiss economists tested the honesty of bank employees in a lab game that would pay off in cash if they cheated. When workers at an unnamed bank were asked about their home life, they were about as honest as the general public. But employees who had just been asked about work at the bank cheated 16 percent more.
"Bank employees are not more dishonest than others," said Ernst Fehr of the University of Zurich, author of the study published Wednesday by the journal Nature. But he said when reminded of their job they become more dishonest, so something about the culture of banking "seems to make them more dishonest." Fehr said recent multi-billion dollar international banking scandals convinced him that he had to test scientifically public perceptions about bankers not being honest.
The American Bankers Association dismissed the study: "While this study looks at one bank, America's 6,000 banks set a very high bar when it comes to the honesty and integrity of their employees. Banks take the fiduciary responsibility they have for their customers very seriously."
How the Study Was Conducted
Researchers studied 128 employees at a single bank (even the country where it is located was not revealed). They gave them what is a fairly standard honesty test. They were told to flip a coin 10 times; each time they flipped they could earn $20 if it matched what researchers had requested -- sometimes heads, sometimes tails. An honest person would report matching the requested flip result about 50 percent of the time. But when workers were asked questions about their work at the bank, placing their work at the forefront in their minds, they self-reported the result that paid off 58 percent of the time.
When researchers repeated the test with more than 350 people not in banking industry, job questions didn't change honesty levels. Researchers tested 80 employees of other banks and they came up with about the same results as those from the main bank.
Six outside experts in business ethics and psychology praised the study to various degrees.
Duke University behavioral economics professor Dan Ariely, author of the book "The Honest Truth About Dishonesty," said he agreed with the study authors that one possible solution is an honesty oath for bankers, like doctors' Hippocratic oath.
University of Louisville psychologist Michael Cunningham said while the study is intriguing, it is too broad in its conclusions.
The study's findings ring true to Walt Pavlo, though he is not a banker - he was in finance at telecom giant MCI and pleaded guilty to wire fraud and money laundering in a multi-million dollar scheme. avlo said before joining his company he had worked in the defense industry where ethics were stressed and wasn't tempted to cheat. That changed in his new job where he was "paid for performance" and was told to be aggressive. That culture "influenced me in a way that initially I thought was positive," but led to prison, said Pavlo, who now teaches business ethics and writes about white-collar crime.
AlamyDiners at a Chipotle Mexican Grill in Gainesville, Fla.By Brian Sozzi
NEW YORK -- Unlike most fast-food chains, Chipotle Mexican Grill (CMG) isn't into the holidays.
There are no new menu items, no special promotions and no store decorations. Your experience in the restaurant is pretty much the same in December as it is in July.
So far, that "bah humbug" strategy has worked out well for the burrito and salad bowl company.
Chipotle's fourth-quarter same-store sales have increased an average of 8.1 percent going back to 2011, according to Bloomberg data. By comparison, chains that go all out for the holidays -- Starbucks (SBUX) Americas, McDonald's (MCD) and Dunkin' Donuts (DNKN) -- have seen smaller gains during the same period.
Gimmicks like that are the rule in the fast-food universe, but have never been part of our strategy.
"Gimmicks like that are the rule in the fast-food universe, but have never been part of our strategy," a Chipotle spokesman said via email. "Our business is decidedly more focused, with our greatest attention directed to the things that really drive our business -- our unique food and people cultures."
He concluded: "We have never made use of gimmicks like that to drive our business."
Meanwhile, Starbucks stores across the country have been transformed into their usual winter wonderland of red holiday cups and seasonal photos emblazoned on plastic gift cards. Dunkin' Donuts has brought holiday cheer to its bagged coffee this year with flavors like pumpkin spice, apple pie and eggnoggin.
Even McDonald's has introduced a seasonally inspired McCafe beverage called white chocolate mocha.
Instead, Chipotle is highlighting its new catering service on its Web site for holiday work lunches or dinner. Chipotle's catering service contributed about one percentage point to its average check increase of 8.5 percent in the third-quarter. "We will be doing holiday promotions for it [catering]," Chipotle co-CEO Monty Moran said on the company's third-quarter earnings conference call in October.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
