“Some loss leader items are perishable, and thus can’t be stockpiled”

http://en.wikipedia.org/wiki/Loss_leader

Yes, apples would work too.

Understood.

I was not calling you out, more just throwing out a different perspective.

Thanks for responding.

Incentives in which some are losers are a perfectly valid form of advertising, and it can be very powerful. Why do you think huge corporations like Bank of America still do it regularly? It works.

The same example I always give is the loss leader of milk in groceries. Every week a grocery might sell milk for 99 cents a gallon, with the expectation that once you’re in the grocery store you’ll buy eggs or Cheetos or whatever for them to make a profit. Also, you might decide the store is clean and useful, and come back again next week when milk is not on sale. Is it unethical to walk in and just buy the milk?

Forex.com has made a decision to require one trade. I have seen other FX companies offer $1,000 bonus but require 200 trades. It’s their choice, and I don’t view it as a loophole.

So if the company knows in advance that some people will apply just for the bonus and then leave, and is in fact ok with that (although obviously they’d prefer everyone were a true customer), I think that affects the morality of doing so.

Having worked for a major wireless company in customer acquisition for a number of years, trust me they set acquisition costs anywhere less than the value of a customer’s purchases. That’s why in cellphones a prepaid customer pays almost full price for their cheapo phone, and smart phone customers get $200+ subsidies (since they’re on highly profitable voice and data plans and are typically high usage users).

I got a free DVD player for making a $25 deposit at Compass Bank and I never had any intention of really banking there. I was impressed with their service though, and now I have two business accounts, a money market and a joint checking account with them. They’ll get a look for my next home loan too.

I see where you are going with this but just like what Dee said, the company set the rules and Johnathan (and the rest of us) are only playing by the rules.

It would only be unethical if somebody signed up an offer with “false” information in order to get the freebies. Or if they started spamming people and trying to use their information… If you are abiding by their rules, how are ethics involved??

I don’t really see the coupon argument as similiar. Unless you’re stating the following: A bottle of Soda is on sale for 50% off with a coupon to $0.50, so you make the purchase and turn around and return it days later receiving a refund for $1

I understand the reason companies do it, to get people to test their product. Here’s my opinion, if you’re knowingly working the system to make yourself a profit without the intention of giving the product a fair shake, than one might see that as unethical?

I was just opening a debate on the thought of ‘is it right or wrong’.

You mention that you’d want to ‘sting’ these big credit card companies, because often the promos cost the customer in the end, but would you still work the system of a small business or an individual?

I don’t see a problem with opening accounts for the bank bonuses. It probably costs financial institutions at least $25 in advertising to get a customer signing up for their services, so why not use free word of mouth advertising and actually spend the $25 by giving to the customer?

There is got to be at least a percentage of the bank bonus customers who end up using their accounts, and thus the financial institution ends up making money in the long term.

I for example opened an E-Trade savings account back in 2008 with one dollar, and got a cool $25 dollar bonus on it. I did however move some of my savings over at E-Trade, and I am still a customer there. I even opened a ROTH IRA with them eventually. I can tell you that the $25 E-Trade gave me for opening a savings account was a win win for both parties.

Best Regards,

Blogging Banks

Companies realize this and every company puts in clauses to insure that you spend enough time with their product to give them a fair shake. They of course realize that some of the bonuses will be given away without every person becoming a long term customer, but how many advertising dollars are wasted in magazines and on T.V. on customers who never purchase anything? Do you feel like you are stealing TV if you watch a show and don’t buy the products advertised? (Or worse, TIVO through them!)

All that said, I have no problem whatsoever taking money from the credit card companies… In fact, I would prefer to sting them a bit as the vast majority of “promotions” end up costing customers who don’t read the fine print in the long run.

Simply put, if the companies find that the promotions they are running aren’t making them money they’ll stop the promotions…

I have been a reader here for sometime now, and I read your tips to receive the promo offers and “free money” and understand you can make some decent money on the side by doing such a thing. My question to you, do you consider yourself an ethical person and do not feel there is anything wrong with what you’re doing?

The reason I ask, is because these companies are giving these offers to reward customers and to try and gain business to operate profitable. Your actions seem unethical as you’re finding loopholes and making money off such promotions.

I can understand if you respond with the argument that big business take advantage of the consumer in the same way through fees, penalties and such, but surely you’d find holes in that argument as well.

Just curious towards your thoughts, and how you justify this. Would you say you’re lending them money, therefore you expect a reward? Would you consider it a “win, win” for both parties or do you feel you’re the only one making out?

If I am incorrect in beleiving you open accounts, do the minimal activity to receive the promo$$ and than close out the account, than consider me the fool.