The idea to start Free Shipping Day came to Luke Knowles, the founder of FreeShipping.org, on December 5 of last year. FreeShippingDay.com launched on December 8, 2008 with 25 participating merchants. The list would then grow to 250+ members by December 17 as the media picked up the story. The site attracted over 250K visitors last year according to this article.

In the concept, the 700+ merchants participating in this year’s Free Shipping Day have to guarantee delivery by Christmas however the free shipping itself doesn’t have to be unconditional. Naturally you will find a lot of offers with strings attached (like minimum purchase required) and unfortunately the website is not clear on what exactly you get.

Free shipping is offered year around!

I just ran a couple of reports for free shipping deals submitted on Buxr and it turns out that almost 60% of all deals in 2009 had zero shipping fee. So you don’t really have to wait till the end of the year, free shipping is offered routinely by merchants like Buy.com, Newegg, Dell and Mertiline. Here are some 2009 stats to prove my point. You can see that the number for Walmart is a bit on the low end however you should consider that most their products qualify for “free ship to store” or the subsidized $0.97 shipping to home.

So what is Free Shipping Day?

In my view it is yet another marketing trick to make you whip out your wallet and buy more stuff. Does the website offer any useful information? As I mentioned before many of these offers come with minimum requirements and there is no way to see what you really get ahead of time. In addition, many merchants will do guaranteed delivery after tomorrow. These two things in essence render Free Shipping Day useless. Instead, I suggest you look at this list of shipping deadlines and some practical tips on what to buy for a holiday gift if you are a procrastinator.

Related: Free Shipping Day: What’s the Deal? at Time.com

Now imagine that your shop has a backdoor which wasn’t remodeled, and by the way, this was the door that all your regulars have used all the time before you got on ‘Bing Cashback’, and they still do.

Two things can happen in this imaginary world:

• If you keep your prices low (at the level before you joined ‘Bing Cashback’) you will hurt your bottom line
• If you raise your prices to compensate for the lost revenue, you will hurt your regulars, who still use the backdoor and don’t get cash back

It sure feels like your business is doomed either way, that is unless you have a magician friend, ‘Marketer’, who comes up with a ‘genius’ solution. He invents special glasses that when used will make the price on all your merchandise look higher, and he then suggests to give out the glasses to everyone who comes in the store through the ‘Bing’ remodeled frontdoor. You take on the advice, your business is booming until one day an ‘unforeseeable disaster’ happens - one of your customers takes off the glasses and sees the lower prices!

This is what in essence happened today with a New Jersey based electronics seller Butterfly Photo when Meghani, a blogger at search engine startup Bountii, exposed their ‘magic glasses’ practices to the world.

Butterfly Photo set a three month cookie on my computer to indicate that I came from Bing. Any product I look at for the next three months may show a different price than I’d get by going there directly.

Meghani claims he knows ‘more than a few instances’ of this kind of ‘magic marketing’, but he unfortunately doesn’t name the specific stores.

On one hand, the online world has opened new unimaginable before marketing opportunities as well as new ‘creative’ ways for businesses to scam their customers. On the other hand, thanks to social media, ‘business failures’ like this have become more costly for business owners which to some extend counter balances the situation. Overall I feel excited to live at the time I do and be a part of this ‘online revolution’.

What is your experience with Bing? Have you ever been a target of the dual price ‘magic marketing’? Do you think Bing Cashback will bring Microsoft success in a similar way the banks have benefited by hooking their customers to the cash back rewards credit cards?

In case of a check I would simply deposit it into my account and life goes as normal. In case of a debit card, I can’t just withdraw the funds. According to the instructions I have to use it as a credit card which raises a couple problems. First, I have to keep track of the remaining balance and make sure I don’t overcharge. Second, if I need to charge more than it is left on the card then I have to use partial charge - something online stores don’t do.

The overcharging is a bigger issue that it may seem. No, you don’t get slapped with a fee. Instead the retailer attempts to put a hold on the funds and you can’t use the card until the hold is released (a few days in my case).

So why retailers move to debit cards? Since using cards is not convenient for the customers it has to be done because it is convenient for the retailers. Here are a few things that cards enable retailers to do:

• They have your money until you use it - the balance on the card is in the retailers’ account until you actually use the card to buy something, and every bit helps the business especially in the kind of economy we are right now
• They make money off of your purchases - Visa typically charges a fee each time you use the card for a purchase. The company issuing the card may well get some charge backs. Even if they don’t, I am sure Visa will gladly cover the expenses for issuing and mailing out these cards, something retailers have to pay for themselves if they use checks
• They keep the remainder of the balance - If you discard or lose the card w/o completely using it then the issuer keeps the remainder of the balance. Why would you not use it all? Because of all the difficulties associated with calculating the remaining balance.

All of the above is a speculation based on my experience and common sense, so don’t take things for granted. The explanation however seems very plausible to me and I would really like to find out if I am right, so if you have any insider knowledge on how things work in the marketing department of these companies, please leave a comment.

Photo courtesy of licokao @ Flickr

He forwarded an email to me with a special online promotion that entitles to a free child ticket with paid adult. The promotion was through Cirque du Soleil members club and delivered by Ticket Master. You essentially were given a special link which brought you to the usual Ticket Master page where you buy the tickets at a discount. Sounds good, right? That is what my friend thought until he went on to order his tickets.

What turned out is that if you use the promotional link computer algorithm at Ticket Master will pick the worst seats and will try to sell those to you even if you instruct it to go for “Best Available”. This usually means you get a crappy section with a view from the side, something you absolutely don’t want to happen when you go with a family or friends.

I called the 800 number on the Ticket Master “contact us” page and spoke to the operator who pretty much confirmed my fears. They do have the ability to override computer selected seating unless it is an online promotion like mine in which case the computer will start with side seats and will move on to the middle only after the side seating is filled.

I am so pissed off. I think Ticket Master must disclose this on the promotion page. It is such an unfair thing to do! I understand the business side of it, they sell out crappy seats at discounted price, but it shouldn’t be offered as something exclusive and presumably done in an “effort to say thanks” to the loyal Club members. Don’t you think so?

The experience however is greatly gratifying. On an average week day we get around 50-60 deal submissions and just about as many comments from our members. Unlike ProBargainHunter, Buxr is built around a generic open-source web platform and I enjoy the luxury of being able to add all the possible tweaks to make things convenient for bargain hunting and shopping, something I couldn’t have done with this blog. Wordpress is a great platform, but it is more like a Swiss Army knife. You can do many things with it but you will never be good at anything in particular.

So we have plenty of deals and comments at Buxr. What we don’t have enough of is opinions. Yes, opinions on shopping deals. The deals, even the best ones, don’t usually get more than 10-12 votes and this is not nearly enough to create a balanced out picture of how hot the promotion or a coupon really is. One - two members can easily sway the votes towards a certain niche/category. What is more important, members with friends can have much more influence on votes than those without (but this will probably always be an issue).

Either way, I think more participants would balance things out a bit and this is why starting next month we are launching one more contest. We will be rewarding members for inviting friends. Top 3 by the number of referrals will get cash prizes at the end of the month. We’ve got to find more people who could contribute to deal voting, and I don’t see how else we can do it effectively and without spending enormous amounts on marketing.

If you love bargain hunting and have friends who might enjoy it too, come and join us at Buxr.com for the next month contest. By the way, here is a photo and a guest blog post from our last month’s winner!

A Linens ‘n Things filing would mark one of the first major retailers to seek bankruptcy protection in this economic downturn. The New Jersey retailer, which sells home products like towels, bath rugs and kitchen appliances, has about 590 stores in 46 states and employs 17,000 people.

I almost lost my gift cards when Sharper Image went down in February. Bankruptcy seems to be a convenient way for retailers to avoid paying back the loan they get from customers, which is what a gift card essentially is, and if I had any LNT cards I would run to cash them out at this very moment.

Bed Bath and Beyond is LNT’s key competitor but according MarketWatch they seem to be in better shape to weather the downturn, and as we all know the weakest dies first in a financial crisis.

A key difference between the two retailers’ situations is that Bed Bath & Beyond has $224 million of cash on hand with no long term debt, while Linens ‘n Things has cash of just $16.1 million with $650 million in long term debt.

The question you probably want to ask is who is going to be next. The companies that carry more debt are certainly more affected. The profit margin and recent history of cash flow are also important. I am trying to dig out more information on this and if you have anything to share - please post it in the comments.

What makes people come back to a deal site over and over again? I think many website owners will agree that the repeat users, the regulars, is the most precious type. They are more likely to advocate your business/hobby and recommend it to friends. There are really multiple reasons for them to stick with you but the major one is probably information they get on the subject of their interest - bargains.

Information

The basic form this information takes is the deals and coupons/promotions posted on the site. This is what the most of the deal sites from my “popular list” are very good at. It is important to have fresh daily updated content or the site will start losing regulars pretty quickly.

Besides the deals the information can take another form - deal related comments and feedback the visitors leave on the site. There are very few sites in that list that can boast the community required to produce this kind of information, probably just a few from the top 10, yet it is the comments and personal recommendations that help the most when deciding on a value of a particular deal.

Community

Humans are social creatures. The feeling of being a part of a group of like minded individuals makes us happy. If you look at the deal sites and forums, the majority of comments people leave are not really directed at helping others with bargain hunting. They are a social chitchat or small talk. Humor, flame, complains. This is what we do, we strive for attention and we get it in a form of feedback to our comments from other users.

The forum deal sites (e.g. like recently reviewed Spoofy) are the kind that are suited the best to support the community. A stricter format of a typical non-forum based deal site is not as good for this and so the owners of these sites usually run a forum on a side that they try to (more or less successfully) integrate into their main deals listings.

Financial incentives

These can include cash back on things we buy or prizes the site owners give away. Sometimes the incentives can be more elaborate, like with the no longer alive Modoshi, but these cases are very rare. Life proves that prizes by themselves are good to make existing users happy but a bad way to attract new ones, and in no way help build the feel of community.

What do you think brings return visitors to a deal site? Which site in your opinion does the best job at fulfilling these needs? Why?

The poll was set so that each vote is bound to a unique IP meaning if you used your IP once you can’t vote again. This is not a bullet proof way of eliminating duplicate votes but you really have to make an effort to go around this limitation (if you wanted to).

The comments on the other hand were not limited by IP. With that in mind, here are a couple of facts that make me think the poll results are rigged.

DealTaker comments are spam

I analyzed the comments and it appears 5 out of 8 comments praising DealTaker came from the same IP despite different usernames/emails in the comment signature. Here is the IP used: 71.74.145.215
I appreciate if anyone can find more about the geography of this address. This of course doesn’t prove anything but I am just curious.

Only top 5 positions gain votes

If you take a look at the complete list of votes, you will notice that only the top 5 positions have gained any significant number of votes. The #6 is shopping-bargains.com with twice less votes than #5, markdownmonkey.com
I might be wrong but this fact tells me that the voting is done by the people specifically interested to move the deal site to the top 5 to get listed on the front page.

Results go side by side

This is not as obvious unless you have been watching this for some time like I have and is especially true with positions #1 and #2. I have been seeing it happen several times: as soon as fatwallet.com becomes the front runner, some magical force comes along and dealtaker.com catches up. I have not paid as much attention to #4 and #5 but as you can see they have very close number of votes as well.

I am really distressed by these findings and consider pulling the poll results off the front page. What do you think?

This is a very good example of how a company cares for its customers. Best Buy has just announced it will give a $50 gift card to everyone who bought an HD DVD player from them before February 23, 2008.

Why are they doing it? This could be somewhat compared to Steve Jobs giving credit to the folks pissed off by iPhone’s sudden price drop. A happy customer will come back and will spend more green and this little $50 investment will return back many times.

Source: HD DVD Action Center at BestBuy (via FatWallet)

Do you have a credit card? Are you a “dead beat” or a “revolver”? Do you know how long it would take to pay your credit card balance if you only made minimum payments? Do you know why your Citibank (and many other) credit card bills come from South Dakota and not any other state?

Tonight PBS is re-airing their super-popular “Secret History of the Credit Card” program and you can find answers to these and many more questions. You can watch the show online at pbs.org as well. I just did. Here is my favorite quote (about credit card companies):

These guys have figured out, the best way to compete is to put a smiley face on your commercials, a low introductory rate, and hire a team of MBA’s to lay traps in the fine print

About the late fee, I did manage to get rid of it, but it turns out there are millions who pay day in and out.

Just like gambling, credit card industry plays on people’s weaknesses, but unlike gambling you have an unrestricted ability to get your self into as deep a hole as you can dig for your self, and you can do it without even leaving your house!