Just a quick ‘how the world works’ post since many people seem to not understand. Yesterday, TopCashBack (TCB) dropped cashback from $2000 cards to $200 denom cards only. The reaction from many was to chase around other portals.
That’s not how it works. This is how it works:
- Amex pays Cashback site X
- Cashback site passes along X-Y to customer
- Customer earns Z (X-Y)
TCB does not suddenly decide to kill their own revenue by screwing the customer. They simply have to pass along a cut of whatever they are paid, and if they aren’t paid, they can’t pass it along.
Amex could suddenly decide to cut off TCB from their list of favorites, and only work with obscure sites you’ve hardly heard of. This could come from an internal political decision. However, it is very unlikely to occur in one of the most well known partners.
Ergo, Amex cut the money. If you find a site that hasn’t updated their terms to reflect this one of two things have happened:
- They forgot, or didn’t get the message.
- You missed it in the fine print.
Money doesn’t grow on trees
If you think you ‘scored’ by placing an order with a smaller site and copying the terms and conditions to later coerce them into paying you, what are you really doing? They didn’t get paid by Amex, so you are taking money out of their pockets because they forgot/were traveling/ weren’t aware. Small businesses cannot sustain this outflow demand without inflow. I could see some entrepreneurial young folk setting up a cashback site, and could imagine them enjoying a vacation somewhere, only to wake up to see that all this happened in just a few hours. You’ll either get your payout out of their own pocket, or they will fold, or both.
Last night I watched one blog sending out ‘blow by blow’ updates about the sites who were still offering cashback. Do you think that these sites were changing because they were in deep negotiations with Amex, or because they just heard the news that they were exposed by a rule change?
Now you know how it works, are you still OK with demanding your payout?
I understand where you’re coming from, but as a small business owner myself, I have to evaluate my business risk all the time. If Amex truly changes its terms that suddenly and capriciously, then it’s not a company a small cash-back site should be doing business with, and they’re ultimately at fault for not evaluating and managing their risk properly (IIRC, Amex has reduced or cut its cash back sometime in August for at least two years now – enough for a track record). “Forgiving” the portal rewards risky behavior with an unreliable product.
That said, while inclined to expect my payout ( having made a large purchase from a different site very early yesterday morning prior to finding out that TCB changed its terms), I’m also reasonable enough to negotiate with or accommodate a fellow small businessperson.
Sure, we can always blame something, but the broader point is, can we accept the burden of not exploiting everything. You mention words to this in your final comment on negotiating.
(Note: I fully agree that chasing around to obscure portals once you know about the change at TCB is ethically reprehensible).
I disagree. The terms and conditions are black and white. They could easily put a clause in their T&C’s reserving the right to change payouts based on their negotiations with Amex – but they don’t. Maybe they shouldn’t assume they can 4 Hour Work Week a cash back site and sit around on the beach without at least having someone checking the email.
You probably should think about the implications of what you are suggesting.
I agree, when i heard the news, I figured it was from AE down, so i did not rush out to buy GC from other portals, no fun in fighting for the CB anyways.
What I’m upset about is I just paid $99 for year of free shipping from AE GC a few weeks ago, and unless they change back I’m not going to need it
A few things:
1. I think it’s ethically reprehensible if Amex sent out a notice after business hours on Wednesday night and said “effective immediately — and you’re liable if you don’t fix your terms by the time stamp of this e-mail” and screwed every portal who didn’t have someone on call to make the change at 7pm or 12:01am the next morning or whenever. Portals and internet site sales are operational 24/7, but nobody should expect every business with a website to be staffed 24/7 or even on the weekends. Thursday was a business day and a banking day. If you are running a portal operation like that, you should probably expect be responsible for your business during business hours on business days. If the portals got the notification during business hours on Wednesday and didn’t do anything about it until sometime Thursday afternoon, what’s up with that? Realistically, it would take under 5 minutes to pull Amex from your website or make a change to a few sentences of terms. If Amex had given them reasonable notice, they could have at least pulled Amex from their sites until they could make the change.
2. How do these portals even work on the back end? It would make sense that Amex (or any other business) would only report orders back to the portal that qualified for cash back. Hence why we have to lodge claims for missing cash back, submit all our order information, they have to check with the merchant, etc. — humans have to get involved sometimes. I doubt that Amex is sending full details of every single order that may or may not be eligible for cash back and leaving it to the portal programmers to sift through denominations of gift cards, whether or not a promo code was applied, etc., then having the portal send that information back to Amex saying “pay us please” and then Amex reviewing it through yet another automated system saying “okay – ACH is on the way”. That would be pointless and inefficient — Amex should filter it to start with, as they probably do. Which means that if our orders tracked through a portal, as mine did, then that’s most likely because Amex hasn’t fixed their own programming and filtering, in whicj case it probably will get paid without any human knowledge or intervention as I suspect most of these operations are highly automated — or because the terms really hadn’t changed yet for that portal, perhaps because there is a simple clause in their contract saying the portal operators have X hours to acknowledge the change.
3. Ultimately, I think the issue will get taken up between the portals and Amex. If they really did receive a moment’s notice to change something so drastic, maybe it’s time to review their contract terms — or chalk it up to a lesson learned. Portals aren’t going broke, after all.
Just some thoughts! I’m not going to demand and threaten if my order tracks and doesn’t get paid. The credit card cash back was enough to offset liquidation fees and break even for me.
Why must the average portal shopper who doesn’t have connections to portal owners assume that all portals have the same terms with Amex and that Amex changed the terms for all when they only have seen a couple portals change their terms? I wouldn’t get upset about portal shoppers flocking to the better-termed portals in this case. Unless you’re in connection with multiple portal owners and can then can only assume the change is for all portals then it’s a stretch for most portal shoppers to come to the conclusion, without proof, that their order with a portal that still has the normal terms is somehow taking advantage of that portal. Ebates, for one, is a billion dollar company owned by the Rakutan, the top internet retail company in Japan and has an annual revenue of $170 million to $200 Million. It originally began in the Silicon Valley by 2 wealthy attorneys who hit a big pay day when it was sold for one billion in cash (they also had other investors, so they weren’t the only 2 to receive the cash buyout).
However, I do agree with your sentiment that some blogs go too far in posting every angle to take advantage of some companies. But, isn’t that what fuel dumping, finding mistake fares and hidden city ticketing is about too? Maybe it’s that some don’t feel bad about taking advantage of big companies but don’t feel that way about little companies.
It’s worthy of discussion and glad you wrote this piece. It gives everyone something to consider.
There’s certainly a lot of opportunities to be introspective with this hobby.. Ultimately we will be doing one thing or another that might cross another’s boundary. So it’s hard to ‘judge’ but it’s important to question.