Deception? Price gouging? Subscription scam? Top magazine titles won't say a thing
In mid-October, I wrote about the New York Times offer to refund overpayments to customers who fell for an unauthorized third-party renewal solicitation. The Times also warned subscribers in print and via e-mail not to fall for the scam.
I noted that the same company had been blanketing magazine subscribers with these notices for years before broadening to newspapers as well in 2013 and 2014. I couldn't immediately get a comment from magazines.
Three inquiries later, spokespersons for top publishers Time Inc. and Conde Nast are still stonewalling me. It's the full Bill Cosby -- they won't say a thing, not even what they charge for a renewal of Time or Vanity Fair.
From which I infer that they wink and take the money from the scammers (operating under various names but identifiable by a distinctive format and a White City, Oregon return address). Renewals or new subs are fulfilled, and unless a customer complains, it's caveat emptor about being overcharged 15 percent or more.
Meredith Wagner of MPA, the magazine trade association. was a little more forthcoming, replying by e-mail:
Renewal scams are a persistent problem with the potential to undermine the trust that consumers have in our industry. Needless to say, magazine media has taken a variety of steps to continuously publicize the issue to subscribers by aggressively posting educational material on their websites and in ads in print magazines. Additionally, customer service reps are informed and trained to work directly with impacted customers. As an industry that strives to meet the highest levels of customer satisfaction, we are committed to finding solutions that protect our customers and minimize these threats.
Rita Cohen, an MPA senior vice president/ legislative and regulatory policy, amplified in a phone conversation. The association is well aware of the problem and has sought to interest the FTC, U.S. Postal Service and several state attorneys generals in crafting a legal response -- so far to no effect. A renewed push in partnership with the Newspaper Association of America is under discussion.
One complication, Cohen added, is that it is sometimes hard to prove that the solicitations meet a legal definition of fraud rather than a clever form of sharp dealing.
Despite Cohen's assurances, my sense is that industry concern over the scams is muted at best. In a Google Search, I could only find only The Nation and The Atlantic offering warnings and refunds as the Times did. Cohen and Wagner sent me a couple more examples from Guideposts and the Harvard Business Review.
Larger organizations may not communicate directly to subscribers, Cohen conceded, so as not to alarm the majority who have never received the notices. Cohen also noted that not all magazines are equally affected.
As an avid magazine reader, I receive a steady stream of the White City solicitations. Here is how they work:
The form looks vaguely like an invoice but isn't. Disclosure language on the back says so. And it's not exactly a notice, but rather a solicitation. And National Magazine Services is just a trade name -- an independent agent that does not necessarily have any direct relationship to the publication offered.
The price is typically somewhat higher than buying directly from the company. The difference in the two prices is the White City group's take. In the case of Time, a direct renewal mailing from the company offered a year for $59.95 -- $10 less than the White City price.
More fine print discloses that the "Notice of Renewal" can also be applied to ordering a new subscription. Since new subscriptions are typically offered at a discount, the price gouging and White City take are that much greater. The company recently offered me a year of People at $179.95 -- a markup of 35.5 percent of People's own blow-in card new subscriber offer of $116.07.
The magazine industry has probably set itself up for the White City scam, with a series of its own subscription practices, some dating back at least 50 years:
(1) Once you subscribe, the company almost immediately begins mailing a series of renewal offers. I have received several "expiration notices" this month for subscriptions that run to mid or late 2015. So the White City notice might hit you on a day when your bank balance is healthy and you are in a mood to renew.
(2) Magazines regularly sell their subscriber lists, a nice additional revenue stream. They likely would not sell to the White City organization, but a list broker might.
(3) Third-party sales are standard and deep-rooted. Publishers Clearing House, school fund-raising drives offering magazines, and young adults knocking on doors saying they are trying to earn a scholarship or some other prize all date back to the 1960s. These are inferior sources of long-term subscribers for magazines, but they can juice up circulation totals.
(4) That's important because a great many magazines offer a rate base to advertisers --- a guaranteed number of copies distributed. If the magazine doesn't make rate base number, they owe advertisers a refund or make-good free ads.
(5) Magazine publishers (and newspapers too) have been pushing self-renewing credit card subscriptions. Theoretically these plans are a convenience, but they also keep circulations numbers up by forcing customers to cancel rather than simply letting a term subscription lapse.
(6) Print subscription levels have fallen at many magazines. Profitable full-price single copy sales at newsstands have fallen even more. So defensive steps to keep numbers up may be more important than ever.
This confusing jumble of deals allows for some borderline tactics on the consumer end as well. My wife received a deeply discounted "educator's rate" on The New Yorker for 20 years after she had left the profession for an investment banking career. Some bargain hunters let introductory subscriptions lapse, then re-up a few months later, again at the reduced rate.
I would also acknowledge that smart publishers have their eye on the digital ball these days.,With the high stakes and huge challenge of digital transformation, they may understandably treat traditional print subscription practices as business as usual.
My bottom line: Magazine buyers should never respond to a White City solicitation, saving themselves money by dealing directly with the publishers.
But it wouldn't hurt either for magazines to get with the era of transparency, follow the New York Times example and clean up their act.nbsp;