What does ‘Made in the USA’ mean, anyway?

Made in USA Stamp

Source: What does ‘Made in the USA’ mean, anyway?, clarionledger.com

As you read this, look around at the products near you. Chances are, many of them were made outside the United States. On my desk is a videotape, made in Japan. A coffee cup says “China” on the bottom, and a three-ring binder comes from Mexico. The global economy is a reality, and it’s sometimes difficult to truthfully claim your product originates in the U.S.

Consumer Reports noted in 2013 that nearly eight in 10 Americans would choose an American-made product over the same product that had been made abroad, so it’s no wonder why companies would want to make this claim. Increasing numbers of companies are jumping on this bandwagon, and although most such claims are honest, some are not.

The “Made in USA” issue has even become part of national politics. On Tuesday, President Trump visited the Kenosha, Wisconsin, headquarters of Snap-On Tools to sign an executive order on a new policy called “Buy American, Hire American.” The order includes instructions requiring federal agencies to review purchasing procedures to ensure American companies are prioritized when purchasing goods and services.

To claim something is “Made in the USA” has for years been a serious matter and can get companies in hot water with federal officials and watchdog agencies if not used correctly. The Federal Trade Commission is responsible for enforcing “Made in USA” policies and just this week announced the closure of two recent cases in which companies had made “Made in USA” claims. In the first, Georgia-based iSpring Water Systems settled charges it had deceived customers by claiming U.S. origins for its products, when in fact (the agency alleged), the company’s water filtration systems were imported and composed mostly of foreign-made components.

In the second case, Texas-based Block Division Inc., which sold pulley block systems, was accused of claiming their products had been made in the USA, and even had metal plates stamped “Made in USA” imported from overseas. The company’s products, the FTC alleged, included “significant imported parts that are essential to their function.”

According to an Associated Press-GfK poll. the vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled “Made in the USA.” Wochit

It’s sometimes difficult to say where all the parts to something were made. Even some products that look deceptively simple are not. For example, a simple, painted wooden toy might seem easy to examine; the wood components can probably be easily traced, but what about the paint? The fasteners? And for electronic products, the issues multiply exponentially. For example, a typical computer might have parts from dozens of countries.

 Because the “origin” question can lead to one rabbit hole after another (making it exceedingly difficult to say exactly where a product was made), the standard for evaluating “Made in the USA” claims requires that “all or virtually all the product” has been made in the U.S. All “significant” parts, processing and labor that go into the product must be of U.S. origin. That guideline would apply to any product being sold with a “Made in USA” label or claim (other than automobiles, textiles and wool products, which have their own specific standards.)
So, if you’re looking to buy American, here are a few things you might want to consider (from various sources, including www.themadeinamericamovement.com):
  • Read the labels carefully. Keep in mind that “Made in America” does not necessarily mean “Made in the USA.” Some products may contain this wording, while the products actually could come from Canada or Mexico.
  • Know the difference between “made” vs. “assembled.” Some products may say honestly that they were assembled in the U.S. instead of being manufactured here.
  • Be careful of flags. Patriotic Americans might buy a product that had an American flag on the label, and marketers know that. It could be a ruse to get you to think the product was made domestically. Look for a “Made in USA” label in addition to the flag.
  • Shop wisely. There are many websites that list companies making products in the United States. That’s fine, but such lists may be inaccurate, out of date or deceptive. Dealing with local merchants you trust is often a good hedge against deception.

To find out more about “Made in the USA” guidelines, visit https://www.ftc.gov/news-events/media-resources/tools-consumers/made-usa.

What are the top 100 brands in US?

Source: What are the top 100 brands in US?, clarionledger.com

PDF: Brands

Quickly, before you think about it: What is the first name that comes to mind when you think of quality watches? What about e-commerce companies? Candy? Underwear?

If you named Rolex, Amazon, Hershey and Fruit of the Loom, you would be in good company. Those brands are among the top 10 on a list of the most highly regarded brands in the U.S. today, according to a study by the Reputation Institute.he organization compiles U.S. RepTrak 100, an annual list of the Top 100 brands most associated with positive attributes across a range of behaviors, including quality of products, use of innovation and others. rolexThe survey evaluates responses from 42,000 people who completed a survey in the first three months of the year. All this data is evaluated, analyzed and compiled into a cumulative score, resulting in a ranked list of the Top 100 companies.

The top 10 companies in this year’s just-announced survey are, in order: Rolex, Amazon, Sony, Lego, Hallmark, Netflix, Kimberly-Clark, Hershey, Fruit-of-the-Loom and Barnes and Noble.

“Classic American brands stand out at the top of this year’s US RepTrak 100 rankings, with seven of the 10 companies U.S.-based, and most of these representing what we’d consider ‘nostalgic brands’ like Lego,amazon Hallmark, and Fruit of the Loom,” noted Allen Bonde, Reputation Institute’s chief marketing officer, in an article for Marketing Daily. “Especially appealing to Millennials, we see these types of brands equally focused on good citizenship, active on social media and great at demonstrating their brand purpose across all media channels.”

 While most people know a “brand” when they see one, it’s important to point out the term “brand” is actually a complicated concept through which organizations (and sometimes, individuals) become widely known. Most Americans would instantly recognize most of the brands listed on the Top 100 because they’ve become well-established through advertising, marketing, and retail presence. Most (but not all) dominate their particular market niches, and many are internationally known.

Of course, no brand is immune from reputation damage, and in the social-media-intense world we live in today, a carefully built image can be crushed overnight by many things, including one bad decision by an employee, poor corporate decision-making or just plain bad luck.

There were significant “winners” and “losers” in this year’s report. For example, Rolex edged out Amazon to take first place this year, and Kimberly-Clark (which makes a variety of consumer products, but is best known for its paper products such as Kleenex) broke into the Top 10 for the first time. South Korea-based Samsung took a precipitous drop from No. 3 in 2016 to No. 63 this year after being hit hard by the Galaxy Note 7 recall (but, as the survey authors noted, its previous brand strength helped inoculate it from an even-more disastrous fall.) Yahoo’s reputation dropped after a spate of bad news including a major data breach, and American Express’ iconic image took a hit after a number of recent issues, including ending its exclusive contract with Costco and concerns about its leadership.

The survey also included rankings by industry, categorizing companies into 16 industries by reputation. At the top of the industry rankings were Consumer goods and services, followed by Food and Beverage, Transport, Automotive and Airlines. At the bottom of the list was Energy, followed by Telecommunication, Health care and Financial.

To download the complete report (it’s free, but you’ll need to provide your name, email address and other information), visit http://bit.ly/2nAvLzk.

Nutritional supplements company agrees to shape up

herbalife

via Nutritional supplements company agrees to shape up, clarionledger.com

PDF: herbalife

A group of companies affiliated with the iconic Herbalife brand have reached a settlement with federal regulators over alleged deceptive practices, and will pay $200 million to compensate consumers and former associates. The action was announced Friday by the Federal Trade Commission and culminates a years-long saga in which the FTC and other agencies accused the multi-level marketing company of incentivizing representatives to recruit others, rather than encouraging product sales.

“This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit,” FTC Chairwoman Edith Ramirez said. “Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices.”

The settlement between the FTC and Herbalife International of America Inc., Herbalife International Inc. and Herbalife Ltd. requires the companies to “fully restructure their U.S. business operations,” in addition to paying the $200 million fine to provide “redress” to customers and, in some cases, to reimburse former associates for their losses. In addition, Herbalife is settling a $3 million case with the Illinois attorney general.

Herbalife, while denying any wrongdoing, noted that it’s ready to move on. “While the company believes that many of the allegations made by the FTC are factually incorrect,” the company said in a press release, “the company believes settlement is in its best interest because the financial cost and distraction of protracted litigation would have been significant, and after more than two years of cooperating with the FTC’s investigation, the Company simply wanted to move forward. Moreover, the company’s management can now focus all of its energies on continuing to build the business and exploring strategic business opportunities.”

In its complaint, the FTC also charged the multi-level marketing company’s compensation structure was unfair because it rewards distributors for recruiting others to join and purchase products in order to advance in the marketing program, rather than in response to actual retail demand for the product, causing “substantial economic injury” to many of its distributors.

In its announcement, the FTC alleged the company had lured in people with claims they could quit their day jobs, earn good money and even get rich by signing up to sell Herbalife products. “But the truth, as alleged in the FTC complaint, is that the overwhelming majority of distributors who pursue the business opportunity earn little or no money.”

As evidence, the agency pointed out that, in 2014, Herbalife paid more than half of its “sales leaders” an average of less than $300. And, citing the company’s own survey results, the FTC alleged that owners of Herbalife “Nutrition Clubs” spent an average of about $8,500 to open a club, and 57 percent of club owners reported making no profit or losing money.

And, for those who did succeed in making large amounts of cash, the FTC noted those representatives are “compensated for recruiting new distributors, regardless of whether those recruits can sell the products they are encouraged to buy from Herbalife.” Many distributors, the agency concluded, “abandon Herbalife in large numbers. The majority of them stop ordering products within their first year, and nearly half of the entire Herbalife distributor base quits in any given year.”

The settlement requires Herbalife to revamp its compensation system so it rewards retail sales to customers and eliminates incentives that reward distributors primarily for recruiting. In addition, the company must create a new compensation structure in which success depends on whether participants sell Herbalife products, not on whether they buy products.

“This scheme preyed on people looking to make a better life for themselves and their families,” said Illinois Attorney General Lisa Madigan. “Herbalife created an incentive structure that made it easy for people to invest, but impossible for most people to make any money.”

‘Slack filling’ may mean you pay more to get less

via Moak: ‘Slack filling’ may mean you pay more to get less, clarionledger.com, 12/15/2015

PDF: Slack Filling

Upon opening a box of cereal the other day, I noticed that the cereal only filled about two-thirds of the box. The rest of the box was filled by air trapped inside the liner bag. That didn’t surprise me; it’s a rare occasion when you find a package is filled to the brim. It’s actually somewhat defensible — because we know that some products actually do “settle” inside a package. Just about all potato chip bags contain the disclaimer: “Package is sold by weight, not by volume.”

But what is catching a lot of American consumers off-guard is that while packages may look the same from the outside, in many cases there is less product in the container than before. Adding to consumer anger is you and I are likely to be paying the same or even more for the same size — but lighter — box of goods.

This practice is known as “slack-filling,” and it’s caught a lot of attention in recent years. A recent class-action lawsuit by three plaintiffs against consumer-products behemoth Procter & Gamble (which makes Tide laundry detergent) accused the company of routinely employing “deceptive packaging containing excessive empty space to mislead customers into believing that they were receiving more laundry detergent than they actually were.” Additionally, notes class-action website Topclassactions.com, the Tide lawsuit alleges “the larger packaging used in Tide products gives P&G more shelf space for their products, giving their product an advantage in grocery stores.”

“In addition to the allegations of oversized packaging,” noted Topclassactions.com, “the plaintiffs also took issue with other aspects of the products’ packaging design. The plaintiffs allege “the bottom of the integrated pour spout ends well below the rim required for the screw in cap.” They illustrated their point with photographs, noting, “There is simply no reason, even with the spigot apparatus, why the liquid detergent could not be filled to the top of the bottle.”

Also discussed was the transparent strip alongside the handle, which indicates how much product is left. By strategically placing the strip lower down the bottle, consumers can’t see that the product doesn’t even come close to filling the bottle. “This is a conscious effort intended to mislead the consumer,” Topclassactions.com noted, “as the Defendants knowingly and deliberately chose to add a transparent strip that would not allow consumers to see the significant amount of empty space toward the top of the container.”

If you don’t think it affects a company’s bottom line to reduce the amount of laundry detergent by a few ounces, think again. When dealing with the huge volumes of consumer-products, even a tiny change can mean profit or loss. In this intensely competitive environment, many companies so fear raising prices that they have sought to save money however they can. But some advocates claim they’ve crossed the line when they engage in slack-filling practices.

P&G settled an $850,000 lawsuit earlier this year in California in which consumers accused the company of using false bottoms in their jars of Olay moisturizer to make it appear there was more product in the jar than there actually was. P&G is not alone when it comes to this issue, however; previously, advocates have accused numerous companies of similar tactics, including The Clorox Co., Unilever and McCormick & Co. Inc.

Drugstore chain CVS paid a $225,000 fine last year for alleged violations of California slack-fill laws.

In a June story headlined “How Do Companies Quietly Raise Prices? They Do This,” the Wall Street Journal noted, for example, that 4-ounce boxes of McCormick’s Black Pepper were quietly replaced with 3-ounce boxes, which looked nearly identical. (That’s 25 percent less product for about the same price.)

Usually, when a company is accused of such nefarious practices, they will argue (often convincingly) that slack fill is necessary to protect the products inside; to deter theft (that’s why CDs are sold with those infuriating plastic frames); or to allow for proper use of the product. For example, microwave popcorn packages must have extra space to accommodate the expansion of the popcorn once it’s heated. These explanations make it difficult for regulators to go after companies for using the “slack-fill” tactic. In fact, the federal regulations concerning slack-filling give six exceptions which would exclude a company from being called deceptive; some states are even more lenient.

But while this battle rages on among industries, regulators and armies of lawyers, consumers may feel they’ve been left in the cold when trying to make the wisest use of their dollars. So, here are a few ways you can make sure you’re not being led down the primrose path:

  1. Compare unit prices. Unit pricing (when done honestly) allows you to compare products by weight, by number or by some characteristic shared among brands. For example, toilet paper might have a unit price per sheet; bags of dog food have a unit price per pound. That way, you’re comparing apples to apples. Most retailers have a unit price on the shelf, allowing you to make a fair comparison.
  2. Pay attention to weights and volumes. We’re all creatures of habit, and some of us are intensely brand-loyal when it comes to certain things. We’re more likely to just grab that familiar jar of peanut butter and less likely to notice the weight on the jar has decreased.
  3. Use store brands. Of course, many of us wouldn’t dream of using a store-brand peanut butter or soft drinks. But often, they are virtually indistinguishable from the branded product. And, without the expense required to maintain a brand in the marketplace, it’s a better deal for you. Of course (as we saw with the CVS lawsuit), it’s not a total solution; still, you’re likely to be paying less in the first place.

Weird ice cream flavors increasing

Originally published in the Clarion-Ledger on 7/17/2014.

Once, while we were college students, my old friend Lloyd Young decided to put onion flakes in his ice cream, just to see what it would taste like. He claims it really wasn’t that bad, but the thought of it nearly turned my stomach.

Lloyd is something of an adventurous person when it comes to food (he dreamed of starting a restaurant called Lloyd’s Liver Lair); but I’m not very think-outside-the-box when it comes to food. As my friends and family will attest, my ice cream preferences are like the rest of my food preferences in general…fairly vanilla. I do like chocolate and strawberry, and occasionally will go for a sherbet or some variation of these, but I’d never even think of pouring balsamic vinegar into my frozen treat.

Life has taught me that some things just shouldn’t go together — but do — like Mary Matalin and James Carville, or Beauty and Beast, or frying and Twinkies. And if you try new things often enough, you’re likely to hit on a winner eventually.

Recently, I read a story in a Colorado newspaper about emerging trends in the ice cream industry. The boutique ice-cream industry is exploding around the country, and some intriguing new flavors have emerged. Imagine Tabasco ice cream, or fried chicken and waffle.

“You’re seeing the same kinds of trends in ice cream that you’re seeing in other foods. People are willing to experiment,” said Peggy Armstrong, of the International Dairy Foods Association (IDFA).

There are also new types of packaging ideas, such as Ben & Jerry’s Cores, which feature two flavors in one pint, with an irresistible core of chocolate in the middle. An example is Peanut Butter Fudge, with chocolate on one side, peanut butter (with tiny peanut butter cups) on the other and a fudgy center.

So what is driving all this experimentation? You and me. Ever since the invention of ice cream, people have been demanding new sensations, although today’s tastes have hardly changed in decades. (An International Ice Cream Association study found that vanilla is still by far the favorite choice, followed by chocolate and butter pecan; also in the running were coffee, Neapolitan and Rocky Road.) These lists have changed little since World War II.

Maggie Briscoe of Sal & Mookie’s New York Pizza and Ice Cream Joint notes that flavors are always changing, with 24 flavors in rotation at any time at the Jackson-based eatery. “Local favorites around here are Cookies& Cream and Birthday Cake,” she notes.

But beyond the core of dairy-treat conservatism, the industry appears to be moving towards trying new ways to combine and package their cold confections, noted Laura B. Weiss, author of Ice Cream: A Global History, in a story on the IDFA’s website. “Though we are in an intense period of flavor experimentation, the desire to go beyond chocolate, vanilla and strawberry dates to the post-World War II era,” Weiss noted. “That’s when Howard Johnson, known for his roadside restaurants, tried to persuade Americans to indulge in his famous 28 flavors. Among them: maple walnut, burgundy cherry and fruit salad. “This was really pretty revolutionary,” Weiss said.

The decoy effect and shopping psychology

Originally published at clarionledger.com on 7/30/2013.

Several months ago, I wrote a post about some of the ingenious and sometimes sneaky tactics marketers use to get you to make buying decisions. In that piece, I wrote about how stores use every advantage — down to the color of the lights and the temperature of the store — to get you in a “buying mood”. Recently, there has been some attention paid to an increasingly-common tactic on our decision making. Savvy marketers have learned that people are prone to have their decision-making machinery influenced by something called the “decoy effect” (science calls it the “asymmetric dominance effect”).

The decoy effect seems nonsensical on the face of it, but in reality, it has been proven to make otherwise-rational people make irrational decisions or change their decisions altogether. Here’s how it works. Let’s take the example of a car. You are looking for a basic vehicle at a low price, for your daughter going to college. Options are not that important to you; price and safety are your primary considerations.

You go to a dealership and there are two choices, and you’re trying to make a decision. One (Car A) is priced at $17,000, and is a top-rated safety pick. The other (Car B) is priced at $15,000, but is slightly lower on the safety ratings. The salesman, noticing your deliberations, points out that there is a third option (Car C) which is priced at $20,000, but is also top-rated on safety. Now, common sense would dictate that you would not consider car C (why would you; you can get a safe car for less!) But something strange has suddenly occurred in your thinking: you are now bound and determined that car A is your choice. Sure, you’re paying more than car B, but it’s safer too!

What you didn’t realize is that Car C is a “decoy”, designed to make the Car A more attractive to you. Having a more-costly option on the table influenced you to buy the higher-cost alternative.

The decoy effect is used in a variety of situations, in every level of product marketing, and it’s actually very common in our everyday lives. Various strategies have been suggested for combating it, but I like what the blog The Simple Dollar suggests: unit pricing. For example, when looking at toilet paper, see if you can determine the cost per sheet. I love stores that provide unit pricing; it can often help you decide when something might — or might not — be a better buy for the money. Shopping like this takes time, planning and focus. But it will pay off in the long run.

Think before pink

via Think before pink | Consumer Watch, clarionledger.com, 5/3/2013

Pink is big business these days — and I’m not talking about the singer. The color pink has recently become synonymous with breast cancer charities, and it seems corporate America has gotten into the act. While much of the money being donated around everything from pink planes to pink windshield covers is going to benefit known breast cancer research and support programs, donors shouldn’t assume that their money is actually going to the cause they want.

Yesterday, New York Attorney General Eric Schneiderman obtained a court’s consent to shut down Campaign Center, Inc., a fund-raising firm affiliated with a charity called the Coalition Against Breast Cancer. The bogus charity raised around $10 million in donations supposedly to fund cancer research, but records show that the company spent just $632.00 for a total of 40 mammograms in that same period.

The ruling [PDF] bars Campaign Center and its owner from charitable fundraising in the state, and orders both the company and owner to pay restitution to victims of the scam; the amount will be determined at a hearing scheduled for May 20. The Coalition Against Breast Cancer has already reached a separate agreement with the AG’s office to repay $1.55 million in restitution.

According to the AG’s investigation, Campaign Center was the principal fundraiser for the Coalition and kept up to 85% of the money raised for the supposed charity. Investigators learned that CABC, in spite of its purported goal of cancer research, outreach, and education, was not affiliated with any cancer institution, and spent less than one-half of 1% of donations on anything related to breast cancer prevention or detection. (Consumerist.com)

The story of this “charity” is an object lesson into why donors should exercise extreme caution before giving to a cause. Donors should thoroughly check out the charity’s track record. There are several good ways to do this online, for example through the BBB Wise Giving Alliance, Charity Navigator, and Guidestar. Also, check out charities through the Secretary of State’s Office. It’s your money. Please, think before you go pink!

– See more at: http://web.archive.org/web/20130601161002/http://blogs.clarionledger.com/consumerwatch/2013/05/03/think-before-pink/#sthash.wY28zW89.dpuf

Retailers take advantage of poor math skills

I am privileged to serve on the Board of the Mississippi Council on Economic Education. This important organization is doing some great work to help not only train our school-aged kids to become better consumers and more economically-literate, but also to provide economics training for educators through a program called Master Teacher of Economics. This is one area in which Mississippi is leading the nation, as our Council has been recognized as one of the most effective in the country.

One problem we have, though, is that most people aren’t really equipped to do battle in the retail marketplace. When you enter a store, you are entering a realm that is a highly-engineered space designed to do one thing: to make you spend more money. (Not that there’s anything wrong with that; it’s free enterprise at work!)

Many consumers don’t realize that the odds are stacked against them as they stroll the aisles of any retail establishment. Psychologists, behaviorists, economists and other really smart people have helped retailers use their site to maximum advantage. Everything from the parking lot design, to the pathway into the store, to the temperature and color of the lights are purposefully chosen. Sights, smells and sounds are all designed to get you to spend more. It’s a battle, and if you aren’t prepared, you’ll lose.

Discounting is one battlefield which many consumers enter woefully unprepared. For example, studies have shown that, if given a choice between two identical items, one which included “50 percent more” and another “1/3 off”, they would nearly always choose the item which was 1/3 off, when the two offers actually produce identical results. In an experiment, conducted by researchers at the University of Minnesota, consumers sold 73% more hand lotion when it was offered in a “bonus pack”, as opposed to offering an equivalent discount. The research suggests that people actually view getting more product as being the better value, when it actually isn’t.

Here’s another trick: “Double discounting”. A retailer offers an item for sale at a price of 20 percent off the original price, plus an additional 25 percent of the already-reduced sale price. Most consumers would think that would amount to a total of 45 percent discount, when it actually means a 40 percent discount. In this case, let’s say the item was originally $100.00. The first discount takes the price to $80.00. Then, the 25 percent discount kicks in, but is based on the reduced price, meaning the item now costs $60.00.

Here are some tools to help you win the battle of pricing psychology:

1. Prepare your list, and stick to it.
2. Shop when you have a lot of time. If you are rushed, you are probably less likely to make good decisions.
3. Take a calculator with you to the store, and figure up the price of items.
4. Comparison shop on items you frequently use. This takes a lot of time and effort, but it’s often worthwhile.
5. Take advantage of “unit pricing”. More stores are providing the actual price per unit on the shelf tags, allowing you to compare whether a discounted price is really a good deal. In some cases, buying a package containing several units can save you money over buying those individually, even at the sale price.
6. Use coupons, but wisely. Coupons are designed to increase demand for products, but if you’re not careful, they can make you buy things you wouldn’t normally buy.