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Recently my girlfriend got a notice regarding a change in terms to her Victoria’s Secret credit card agreement. Victoria’s Secret store cards are held by World Financial Network National Bank. In reading these terms, I found some oddly worded sentences, that made it seem almost as if they were trying to slide changes past their women card holders. It mainly pertained to finance charges. (Emphasis mine).

14. FINANCE CHARGES

D. The Daily Periodic Rate of FINANCE CHARGE applicable to your Account will be computed by adding 21.74% to the value of an “Index,” and dividing by 365 (The corresponding ANNUAL PERCENTAGE RATE will be the Index plus 21.74%). The Index in effect for each Billing Period shall be the highest “Prime Rate” of interest as published in the “Money Rates” section of The Wall Street Journal for the calendar month preceding the month in which the Billing Period begins, rounded upward, if necessary, to the nearest .001% (“Index”). The corresponding ANNUAL PERCENTAGE RATE will not decrease below 24.99% nor increase above 24.99%. An increase or decrease in the Annual Percentage Rate will result in a corresponding increase or decrease in the amount of Finance Charge.

Effective July 1, 2010. The 24.99% maximum Annual Percentage Rate will be removed from your account. This means that the Annual Percentage Rate on your account can increase above the 24.99%, upon an increase in the Prime Rate.

In plain English, the APR on your Victoria’s Secret card will be 24.99%. That is, until the rate cap is removed on July 1, 2010 and it can be further increased. Better pay off that card each month unless you like paying 24.99% interest on all those fancy bras and underwear.

Oh, and you better opt out of receiving monthly paper statements or they’ll charge you $1 for each of those you want to receive.

Ryan Economy credit card, finance, Victorias Secret, WFNNB

Retail sales are dying. Lets face it. Personally, I haven’t shopped in a brick and mortar store that has sales associates in the past 5+ years. You want to know why? Because I can buy the same product online for cheaper and not be harassed (or even lied to) to buy other crap I don’t need.

Just this week, we found out that Office Depot employees have been lying to customers who don’t want to purchase extra products. If they don’t want an extended warranty or other accessories, which is where most stores make their money, the sales associates lie to the customer and tell them the product they want is then out of stock. If you do want to buy all that extra crap, you’re in luck, the lapotp you want is it stock.

BestBuy has been caught using similar tactics to upsell products to customers. Circuit City has gone out of business because they couldn’t upsell enough products. The cost of operating a retail store is expensive. The cost of paying employees to stand around around and sell products is expensive. The margins, on some products are narrow, because the accessories have a very high margin and that’s where the real money is.

Online stores don’t need to print ads. They don’t need to pay associates to stand around. They pay to keep the website functioning and for people to fulfill orders. On top of that, some even have mostly automated warehouses. They might send out emails with specials, but that costs next to nothing.

Brick and mortar stores with retail sales associates are a dying breed. Just like the RIAA and MPAA, they haven’t found a way to compete and stay profitable with the new players in the market. Its the same thing that’s happening with print media vs online media.

Ryan Economy BestBuy, Circuit City, Office Depot, retail, sales

Newspapers wonder why subscriptions are down. They wonder why they can’t make any money and why more and more are going bankrupt. They’re using a flawed business model. Unfortunately, they’re not the only ones using that model.

My local newspaper subscription ended today. I only received the Sunday paper for the ads and coupons. The Sunday paper itself was always a bit on the thin side with ads and coupons varying at times, sometimes with hardly any. It only includes a few sections: Front Page / World News, Local, Sports, Money, Real Estate, Entertainment, Automotive, and Classifieds. Of those sections I only read a few and sometimes, only an article or two of those sections.

Recently I’ve been finding more of my news online. From independent sources that do not skew an article one way or another and give you all the facts instead of just the facts they want you to know. I don’t have money to buy a new house so I skip the real estate section, same goes for entertainment. If I want to see a show somewhere, I look up my options online. I do usually check the local section, but despite the fact they publish a local section for my county, I always get a local section for another county meaning the news in that section is never local.

I’ve also found that the time I invest in cutting coupons plus my annual subscription for the paper outweighs the savings I actually get from those coupons. Doesn’t make good fiscal sense does it?

Now to the failed model that is killing newspapers: when demand drops, they raise prices to make up for it. Couple that with the fact they haven’t figured out how to use the internet and you have a dead industry. When I received my paper today it included a letter from the Circulation Director noting a deal they were having to lock in 2008 rates if I pre-pay for 2009.

Because of the economy raising prices on raw materials and lack of demand for the paper in general, they need  to raise subscription rates from $1.50 to $2.00 for Sunday and from $0.50 to $0.75 for daily papers. This baffles me because the newsstand price of the Sunday edition was already $1.50. When I lived closer to Philadelphia, we got a newspaper in a larger market that had double the amount of news and ads for only $1.25 on Sunday… and that was the “out of area” price because we lived an hour outside of the city.

When I moved to the Harrisburg area, I never liked that the local paper cost me $1.50 on Sunday and was quite lacking. But now, because of lack of demand it will be $2.00. No Thanks! Maybe they should look for ways to provide better content for a cheaper price. If the Sunday edition was only $1.00 for what they offer now, I might be more inclined to keep my service.

Ryan Economy Economy, newspaper