Reuters Money

Will retailers give debit cards a new life?

As an expert on the credit industry, John Ulzheimer spends his days thinking about credit cards, debit cards and credit scores. So imagine his surprise when he picked up lunch at a restaurant near his house in Atlanta, then later went on a beer run, and was directly confronted with the consumer fallout from the hot-button issue of the day in his profession: new fees for debit card purchases imposed by government regulations.

“The liquor store has an entirely new pricing structure – the cash/debit card price was 5 percent less. And, at the restaurant, for the first time ever, they asked me if I was paying by cash or debit card or credit card, even before I ordered my meal,” he said, and sent along picture at right from the liquor store.

Since the start of October, the credit industry has been focused in on debit cards, as the Durbin Amendment kicked in federal limits on how much card issuers could charge merchants per transaction, and which last week translated into some major banks imposing monthly fees on users for using their debit cards for purchases. Bankrate.com also released a new study that showed reward offers for debit card usage declined 30 percent in the past year.

It seemed as if the industry was conspiring to turn those cards from a popular payment method back into a piece of plastic you only use to get cash from the ATM. And some said good riddance. “There’s absolutely no reason that consumers need to use a debit card. And I was in that camp before this legislation,” said Odysseas Papadimitriou, CEO of credit card comparison site Cardhub.com, which just released its own study on how the new fee limits will affect consumers.

But the end of debit cards as we know them may be forestalled by retailers, as Ulzheimer noticed in his real-world forays. (Bankrate’s senior financial analyst Greg McBride noted also that smaller community banks and credit unions will also keep debit cards afloat, as they are not affected by the Durbin fee structure changes.)

Some merchants are already willing to pass to along to consumer their newfound savings in fees from the bank. Others will not, but may participate in merchant-funded reward programs, which seem to be taking prevalence in the dwindling space overall of reward programs for debit cards.

“It’s a noticeable shift,” said McBride. “We see that 29 percent of offers are now merchant-funded, versus 13 percent last year. It’s a shift you expect not just to hold, but also to continue.”

Online privacy leaks worsen; “Do not track” gains steam

Are you being tracked right now? If you thought you were just browsing aimlessly, doing a little shopping or checking sports scores without identifying yourself, you could be mistaken about your level of privacy.

A new study from a Stanford University researcher has found that a lot of  the little bits and pieces of supposedly anonymous data being deposited by your web browser are actually being gathered and reassembled by dozens of companies and sold. And stopping that from happening takes more than a little bit of effort, helped by a growing movement for “do not track” legislation.

More companies know more about you than previously thought and stopping them from secretly building profiles of you is a lot harder than just pressing a button, researcher Jonathan Mayer says.

He adds:

“Click the local Home Depot ad and your email address gets handed to a dozen companies monitoring you. Your web browsing, past, present, and future, is now associated with your identity… Keep tabs on your favorite teams with Bleacher Report and you pass your full name to a dozen again. This isn’t a 1984-esque scaremongering hypothetical. This is what’s happening today.”

Mayer, of Stanford’s Computer Security Laboratory, says more than half of the sites surveyed share your information with other sites. As an example, he notes that  even when you’re on a typical commercial news site there will be multiple companies collecting information as a matter of course: including the site itself, a video delivery service, advertising networks and social networks.

Previously, privacy advocates suggested that opting out of so-called behavioral advertising was a means of avoiding having your online usage patterns tracked. But Mayer says that stopping targeted advertising doesn’t stop the data collection.

Consumers Union regulatory counsel Ioana Rusu says companies can not only find out who you are and where you’ve been, but also alter offers that you see based on nothing other than the websites you’ve visited — something that can paint a grossly distorted picture of someone. She cited the example of a credit card company that presented different offers to users based on their online profile.

Borders fire sale stirs controversy over selling customer data

When you sign up for services with many retailers, you’re often asked to opt in to marketing programs with the express promise from the company that they will respect your privacy and never sell that information to a third party. So what happens when they go ahead and do that anyway?

This is the battle going on right now with the assets from the bankruptcy of Borders. The liquidation of the company involves much more than bargain sales on books and re-leasing real estate. Last week, the defunct chain sold its intellectual property to Barnes & Noble for $13.9 million, and included in that was a ream of customer data. What information do they have? A list of videos, DVDs and books you bought at Borders and Walden Books stores as well as from Borders.com. They have your name, your address, your email, your phone number. They don’t have financial information.

For the nearly 50 million people whose names are in the records of Borders stores, you’ve got less than two weeks to exercise your right to have your personal  information removed or it will be handed over to Barnes & Noble. That is despite the fact that those customers allowed Borders to use their data with the caveat that the company would never sell it to a third party.

Prior to the release of the information, the Federal Trade Commission appealed to the consumer privacy ombudsman appointed by the bankruptcy court, urging that consumers be asked before  their information could be sold.

“In light of the promises Borders made to its customers, we believe it would be appropriate for Borders to obtain express consent from its customers, specifying the potential purchaser, before it transfers the data,” wrote FTC consumer chief David Vladeck. “The consent process would allow customers to make their own determination as to whether a transfer of their information would be acceptable to them. For consumers who did not consent, their data would be purged.”

Instead, the bankruptcy court gave Barnes & Noble the green light to keep all the information and use it to market its products — unless consumers said they wanted their names removed within 15 days of an email notifying them. The deadline in the email from Barnes & Noble CEO William Lynch is Oct. 15. The deadline to opt out is Oct. 29 if you are on the customer list but you did not receive the email.

“It’s important for you to understand, however, that you have the absolute right to opt-out of having your customer data transferred to Barnes & Noble,” Lynch wrote.

Back-to-school spending tests your wallet and your patience

Remember when you could outfit a kid with roughly $20 in school supplies? Now there’s a lesson in ancient history, folks.

In present-day Chicago, the list of required items for two public school students can easily top $200. And the author of this article, a father of two, has a fresh receipt to prove it: The total at Office Depot last week to outfit a fourth-grade boy and a second-grade girl came to $196.13 before cashing in a $20 coupon.

All that spending on pencils, paper, wipes and markers, by the way, doesn’t include what many moms, dads and kids also consider fall necessities—items from new school clothes to smartphones for older kids. Parents are frustrated with school district supply lists that grow even as their income shrinks or stagnates. It’s no longer just a matter of pencils and notebooks, but tissues, hand sanitizer, wipes, paper towels, academic planners and much, much more. A student’s back-to-school arsenal can also include new footwear, clothing and computer equipment. And on the tech side, more kids demand smartphones (even if they’re not getting them) and e-readers.

What’s a parent to do, then? Experts say you can fight the back-to-school shopping blues in many ways, and offer powerful tips for doing so:

1. Comparison shopping apps. A smartphone app like RedLaser scans barcodes to find the lowest price on any item. “It uses product results from Google, eBay, Half.com and others and it’s free,” says Farnoosh Torabi, a personal finance expert and author of “Psych Yourself Rich.”

2. Rewards programs. We all dread junk email but getting on the mailing lists of retailers you frequent can yield sales alerts and money-saving coupons. Joining Office Depot’s Worklife Rewards allowed access to that $20 coupon mentioned earlier.

3. Online sales. About 30 percent of families plan to comparison shop online, says Arianna Georgi, vice president of marketing at Flank Digital LLC, the parent company of CheapSally.com. “Online coupon sites are only adding to this push, since many offer large discounts on items such as clothes, books, backpacks and electronics.”

Pssst, wanna buy a stolen Rolex or diamond?

Wanna deal on a diamond? Time to get a new Rolex? Sure, they might be stolen goods, but it’s all perfectly legal.

Seriously.

Say what?

Police departments nationwide recover all sorts of stuff when they arrest bad guys and there are some real gems amidst the eclectic array of goods that gather in evidence rooms. Enter PropertyRoom.com, a site that has grown exponentially over its dozen years of life.

PropertyRoom.com has become the agent for some 2,600 police departments that have to purge their evidence rooms of items where there the owner can’t be found, insurance has already been paid out and the insurer has no interest in the item. More than $36 million generated by sales from the site has gone back to municipalities.

CEO Tom Lane said he was caught up in the big burst of auction sites in the late 1990s and was trying to identify sources of inventory to sell. He harkened to his days as a detective on Long Island charged with purging the department’s property room.

Lane reached out to some old friends, who had risen up the ranks and allowed him to post the items on his site. The result was a boon to police departments (and municipalities) nationwide whose auctions went from sparsely attended local affairs to nationwide bidding contests.

Royal flush: 5 luxury bathroom items to boost your home value

While $250,000 could land a vacation home in some markets, these days, you could also spend that amount on the most amazing bathroom money can buy. Think of the re-sale value that could add to a home!

It’s long been standard real estate advice that updating kitchens and bathrooms increases the value of a home.  G. Stacy Sirmans, a real estate professor and department chair at Florida State University who co-authored a report on “The Value of Housing Characteristics” for the National Association of Realtors in 2003, says this is still true today, but that what now constitutes and “upgrade” on an upscale house is like describing bathrooms on steroids.

“You can find bathrooms now that have these big semicircular showers without a door, where you just walk in,” Sirmans says. “You’ll see separate tubs, fireplaces, TVs. You have all sorts of things in bathrooms these days.”

Here, we spotlight some of the most luxurious features of 21st Century uber-bathrooms. Judge for yourself whether they should make your home improvement A-list.

1. Fully automated toilet

Cost: The Kohler NUMI costs up to $4,800, the Toto Neorest 600 up to $3,800.

How it works: The NUMI’s touch-screen remote controls every variable you can imagine, and a few you didn’t. “It can spray you, dry you, heat you, light you — and play music for you,” says Blanche Garcia, owner of B. garcia designs in Montclair, New Jersey

Complaints surge over group coupon deals

Deal hunters are consuming deep discounts on everything from restaurant meals to boat tours, but they are also starting to complain about troubles with these offers in increasing numbers.

Both the Consumer Federation of America and Web watchdog SiteJabber.com have noted the surge in this relatively new genre of deal offerings. Consumers get lost in the marketing gimmick of the daily deal and don’t see what’s actually involved, including short expiration dates or requirements for additional purchases.

That trouble with the small print is the biggest problem consumer agencies also have seen with the coupons. “Marketers online are becoming increasingly misleading and aggressive in the way they sell products and services,” says Jeremy Gin, co-founder of SiteJabber.com, a community of consumers who evaluate web offerings. “As a result, it is now more than ever incumbent on consumers to do their research on online businesses — read reviews and read the fine print — before they buy.”

Gin says that Groupon had earned a three out of five rating on his site, and had more than 100 people warning against it, while LivingSocial rated two out of three and had 100 warnings; both sites were listed as “not recommended.” He notes many users also report snagging great deals without any issue.

“The major trend in consumer complaints we see on SiteJabber surrounds sites that market their services as one thing, but in the fine print they are something less desirable,” Gin adds. “This serves to increase sales in the short term at the cost of customer satisfaction and long-term brand loyalty. These types of sites are not so bold as scam artists who merely steal money and never return emails. But instead these sites often respond to complaints by pointing to the terms of service and essentially saying, ‘Sorry you agreed to it. No refunds’.”

Susan Grant, the consumer protection director at the Consumer Federation, only sees this trend growing. “I am not surprised that agencies have begun to get complaints about group coupons and would expect that to continue,” she says.  ”Any time you have a new form of discount opportunity you’ll have problems with the terms not being clear.”

When Grant was working on the Consumer Federation’s recently-released list of Top 10 consumer complaints, another category that was growing was about the “recovery” scam, which this year targeted consumers trying to dump their unwanted timeshares. The Top 10 list was distilled from 252,000 complaints gathered from consumer agencies in 18 states by the federation, the National Association of Consumer Agency Administrators and the North American Consumer Protection Investigators.

In the world of high-priced purses, beware quality fakes

Lan Tran, a systems analyst in Boston, wanted a Louis Vuitton purse which retails for about $1,500, but thought the price was a little too steep for her. So when she saw one listed on eBay for $300 from a top seller with only good feedback, she struck.

“With all those years shopping on eBay, I had my mind rest that it was truly a real deal,” Tran says.

Then she looked at some of the detailed photos and realized something about the stitching didn’t quite look right. She asked Cassandra Connors, whose company Bella Bag, is built around the idea making sure clients are getting the real deal, whether she could authenticate that the bag was, indeed, a real Louis Vuitton. Connors concluded it was a fake.

“I was extremely disappointed,” Tran says.

When it comes to designer handbags, as the price rises, so does the quality of the fakes. When a new bag sells for $300 or $400, there’s not enough profit margin in investing in building a quality phony product. But when you get into the $5,000 to $15,000 range, sophisticated counterfeiters join the game.

“There are truly good counterfeits and there are bad counterfeits,” says Connors, whose Atlanta-based company sells previously-owned purses — some have never actually been used — that range from $200 to $15,000 (she just sold a limited edition Channel bag for $9,800). She also offers an authentication service; for a fee, they’ll tell you whether you got a great deal or a great fake.

Connors says she has seen counterfeit bags selling for $1,000 in an attempt to replicate one that sells new for $12,000.

The Viking refrigerator saga: When high-end went awry

Under federal law, companies are required to self-report to the U.S. Consumer Product Safety Commission any product defect that could cause serious harm. Most seem to.

Every now and then, a company that doesn’t do this gets punished by the agency. It’s usually termed an “agreement,” in which the company disputes the allegations and then agrees to pay a penalty anyway.

These situations aren’t common, and it is rarer still when the company involved caters to upscale consumers.

Enter Viking Range Corp., which recently agreed to pay $450,000 after being accused of not telling the government that the doors of several models of its refrigerators were literally falling off their hinges in dozens of homes across America.

When you spend $5,000 to $6,000 for a refrigerator, the last thing you’d expect is to have one of those weighty doors snap loose.

“It swung open and the hinge on the top broke and literally the whole door fell off,” says Gary Budnick of Basking Ridge, N.J. “Fortunately it was me that opened it. When it fell off I was able to catch it. I was shocked.”

The 36-inch-wide door of the bottom-freezer model was extremely heavy, he said, and still filled with condiments. “This thing can crush a kid,” says Budnick, who has three small children at home.

Consumer product database in jeopardy

You may think the government’s wheels always grind slowly, but they can spin fast when a government action runs afoul of business.

After years and years of providing but an iceberg’s tip of the information possessed by the agency, the tiny U.S. Consumer Product Safety Commission in March opened the door to a new world for its constituents: American consumers. The agency launched a publicly searchable database that catalogs product incidents experienced in homes across the nation.

But now the database that gives the public access to safety incidents on everything from microwaves to baby monitors is on the verge of being defunded, potentially dealing a blow to consumer safety.

The purpose for the database was to add an unprecedented level of transparency to a process cloaked in secrecy. We still don’t really know what goes on behind the scenes as the government and business haggle over the terms of the recalls you eventually hear about. But you can — in almost real-time — see what folks are saying are product dangers.

Here’s an excerpt from a recent incident documented by a consumer about a microwave that seems to have gone a bit haywire: “Unit turned itself on when we were out of the home. When we got home we heard a fast beeping and the keyboard was locked, the microwave was hot to the touch and the only way to shut it off was to unplug it … ”

It’s not unlike reading the comments on Internet complaint boards, except the government is required to give every company named in an entry 10 days to issue a response before the incident is made public. In the case of the microwave, the company chose not to comment. Some companies do respond, often explaining that the described episode was a fluke or user error. Then it’s up to the consumer to decide how to process that information.

The value is that consumers can see if others have had they same problems they are experiencing. The database can be used for research when making a purchase for anything from a high chair to a dehumidifier.