Back in November 2007, a large group of local florists, spearheaded by FlowerChat, sent a letter to the Federal Trade Commission urging an investigation into 1-800-Flowers advertising claims of ‘free shipping’ on orders taken by the company and fulfilled by local florists. We contended the company was discounting a service/convenience fee labeled as a ‘shipping charge’, but that 1-800-Flowers also added an additional delivery charge (approx. $7.99) into the price of each florist-delivered flower item displayed on the site. In short, we believed the ‘free shipping’ claim to be untrue and deceptive.
Why would this matter to local florists?
Local flower shops have customers who walk into our stores and pick up flowers and bouquets. The vast majority do not display prices ‘including delivery’ because the added costs would penalize the customers who do stop in and make self-purchases. We break out the fees so shoppers aren’t required to pay for services they don’t need.
Internet-only flower sellers don’t stock flowers so everything they sell has to be delivered. Most display prices which combine the local delivery charge with the floral product and then add a separate service/convenience fee, which they keep. Many customers mistakenly believe the service fees pay directly for local delivery, when they do not.
By discounting the ’service charges’ and calling them ’shipping charges’, consumers were mislead to believe they paid nothing for delivery. This made honest local florists appear over-priced. Consumers were being diverted through deceptive ads.
Itemizing Fees
For more than 6 decades, wire services (affiliate networks) like FTD required florists to itemize all fees to consumers: product, delivery charge, service or relay fee. This let shoppers know where their money was being allocated and added a layer of transparency to the way sales were handled. Failing to itemize fees was grounds for a fine or suspension from a wire service.
Even earlier in this decade, FTD included a disclosure on the page of each florist-delivered product:
“Delivery is included in the price of the arrangement. An $8.99 service charge plus local taxes is added to this arrangement.”
The company learned consumers balked at paying delivery and service charges, so the delivery disclosure simply moved to a far-away page and the service fee (now approx. $15) doesn’t appear until the consumers is well into the shopping cart. Like 1-800-Flowers, FTD now places that information away from the product pages, where it would most likely be seen and understood by shoppers.
Local Flower Delivery by Florists
Each floral wire service (1-800-Flowers/BloomNet, FTD, Teleflora and FloralSource) has agreements with local florists stating the businesses can deduct their own local delivery fees from the total values of orders prior to filling them. ‘Free delivery’ is nowhere to be found in those agreements.
Additionally, padding in local delivery charges and then claiming ‘free delivery’ or ‘free shipping’ is specifically prohibited by the FTC Guidelines.
Class Action Lawsuit
1-800-Flowers has recently announced a proposed settlement in a class action lawsuit that addressed the issue of those ‘free shipping’ ads - Monlar v 1-800-Flowers. Class members (qualified purchasers who bought between March 1, 2006 and February 5, 2008) will receive $10 vouchers - requiring yet more purchases from the company, and the vouchers cannot be used during the two major floral holidays: Valentine’s Day and Mother’s Day.
I concur with author Lahle Wolfe in her summary of the suit on About.com:
“Customers who have been overcharged by any company deserve an apology and a refund. Providing credits for future purchases is a tremendous disservice to customers who were ripped off by 1-800-Flowers.com in the past. In order to get back money for being unfairly and deceptively overcharged, they must now spend even more money.”
Consumers overpaid (were charged for local shipping/deliver) by approximately $7 – 8 per order and the most fair way to handle this would be to send them refund checks.
More ‘Free Delivery’
The latest to join the ‘free delivery’ camp is IAC owned floraflora.com, which uses a floral wire service for florist-delivered order distribution and yet claims “free delivery by your local florists” on many products.
Again, it’s a very persuasive claim – but it’s also an FTC Guildeline violating ruse intended to diverts shoppers away from local businesses and other competitors that itemize fees. A company can certainly advertise an all-inclusive price, but they can’t tell you it’s free when you’ve actually paid for it.
Whether its ‘free delivery’, ‘free shipping’ and even ‘free vase’ claims – when sold and delivered via a florist affiliate network, the advertising just isn’t true.
Here’s hoping more class action lawyers will take interest in this issue.
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