Online shopping has become a lucrative business option for Internet retailers, just as much as it has been a convenience for last minute shoppers. During holidays such as Easter, Mother’s Day and Christmas, sites like ProFlowers.com, RedEnvelope.com and Berries.com (which sells Shari’s Berries products) enjoy a great deal of success.
Part of their success involves enticing consumers to take advantage of valuable coupon codes that enable them to save money (i.e. 20 % off codes, or $15 credits). However, these codes can sometimes lead unwitting consumers to enroll in expensive membership rewards programs that often negate the savings offered by the coupon codes.
This practice was the subject of a class action against Provide Commerce and Clarus Marketing Group, which manages the sites previously mentioned, along with similar outlets such as CherryMoonFarms.com and SecretSpoon.com. As part of the settlement, consumers who placed an order on the offending websites and were secretly enrolled in membership programs between February 1, 2007 and November 19, 2012 would be eligible for monetary awards.
Also, the defendants named in the lawsuit (Provide and Clarus) have denied any wrongdoing but have agreed to the settlement in order to avoid ongoing litigation.
We find the case interesting because the practice of offering savings coupons in exchange for membership into monthly rewards programs has become a popular way of getting customers to spend more over time, while under the guise that they are actually saving money.
If you have questions about whether you have been affected by this practice, or would like more information on consumer based class actions, an experienced attorney can advise you.
Source: TopClassActions.com, FreeShipping.com rebate membership class action settlement, March 7, 2013