This is a guest post from Greg McFarlane of ControlYourCash. Greg recently wrote “Control Your Cash: Making Money Make Sense,” a financial primer for people in their 20s and 30s. If you like what you see here, please subscribe to his RSS feed.
You’d think that the functionaries at American Express were above this, but they aren’t. In the mail last week, I received a glossy sales piece that cemented my status as an elite cardholder. It made what appeared to be a no-strings-attached offer: $100 worth of food, drink and conviviality.
We all know better than to immediately bite at this, right? This is a poor cousin of the novelty check you receive telling you that you might have WON $1 MILLION! But while the latter is preposterous, the former is modest enough to be plausible, right?
Here are the details… American Express offered me (and presumably hundreds of thousands of others) a $100 restaurant certificate if I would agree to accept a couple of free issues of a magazine â€“ in this case, American Express Publishing’s own Travel + Leisure.
Sounds like the easiest thing in the world, right? We’re all familiar with how this works. The fine print states that if you don’t contact American Express by the deadline, you’ll become a paid subscriber to Travel + Leisure. They’re betting that at least some of their sales prospects are going to like the magazine or forget to cancel, at which point they’ll have a new group of paying subscribers.
It’s no great revelation that you should read such an offer from the bottom up. Here’s the summary of the qualifying language at the end of the mailer: $3 processing fee, 12 monthly issues for $20, then $29 a year until you come to your senses and realize what you signed up for.
By the way, that $29 is the â€œCardmember rateâ€. Care to guess what the non-Cardmember rate is?
Nope, not higher. It’s lower.
That’s right, $20. Says so right there at the subscription page. In this case, membership has its disadvantages. By virtue of having an American Express card, you get to pay a 45% premium! For something called a “magazine,” which will sound as quaint and archaic five years from now as iceboxes and VHS tapes do today.
Then, at the end (and this is verbatim): “Either way, your 2 issues and Restaurant Certificate are yours to keep.”
Of course, we all think we’re smarter than that. I’ll take my two free issues, skim some interminable articles about grape season in Tuscany and the latest sous chef to open a tapas bar in Manhattan, promptly cancel, and then enjoy a net $97 worth of free food.
But this offer came with a wonderful new catchall phrase, ordering me to visit a website to redeem my certificate. An extra step in the chain, but for $97? Bring it on!
Unfortunately, there’s a 6700-word (!) legal disclaimer on the website, which is a powerful indication that this might not be worth the trouble. Buried in the jargon, we find the following:
- You can’t deduct only partial value from the certificate. You have to spend it all at once.
- “Redemption… requires additional consideration paid to the restaurant.” A conversation with a couple of attorney friends (alright, attorney acquaintances – attorneys don’t have friends) revealed that that phrase means the restaurant can require you to spend a certain amount at its discretion – say $75 – before your $100 “free” certificate kicks in.
But again… For all this, you get to pay a mere $9 more per year for a magazine than do ordinary people who don’t receive these offers.
The moral? Always read the fine print.