Showing posts with label Junk mail. Show all posts
Showing posts with label Junk mail. Show all posts

Wednesday, September 5, 2012

Can we supplement Social Security with junk mail?

More on this concept later but it is important to note first that, according to a new Associated Press-GfK poll on public attitudes about Social Security, “…53 percent of adults said they would rather raise taxes than cut benefits for future generations.”  Keep in mind that this is today’s adults thinking about their kids and grandchildren.  There are 36% that would cut benefits and most of us would agree that are the radical conservatives, including primarily the Tea Party.

To help balance the SS budget, another “…53 percent said they would raise the retirement age, while 35 percent said they would cut monthly payments.”  Because many low income seniors depend entirely on SS as their sole means of income, an across the board cut here would not be fair.  But Social Security is one of those American institutions that we have come to expect; sorta like setting a legal precedent that guides a court in their decisions.

Now the GOP would have us believe there are ways to play with SS and make it better.  Republican supposed genius, V.P. contender Paul Ryan, presented a plan in 2005 to privatize Social Security in a way that brought such a colossal price tag that even the Bush administration called it “irresponsible.”  Further, he wants to reduce the amount of money paid out overtime leaving seniors in the lurch when costs go up.  All because of a refusal to raise taxes on the wealthy.

47% said they trust President Obama to handle SS better than Mitt Romney at 44%.  Although Romney is against raising taxes on the higher incomes, he is for slowing the growth of benefits for those with higher incomes.  In 2008 Obama said he would raise the level on Social Security payroll tax from $110,100 to $250,000.  It is obvious that what is needed is a combination of increased taxes with program adjustments, and perhaps some limitation of benefits. 

The Young Turks on Social Security one year ago:

Only 20% of young adults (those under 35) think that SS will be there for them when they retire.  And this is where that wild idea of mind came into being some seven to eight years ago that we could supplement Social Security income in the future using some of the profits the junk mail list industry makes from the sale of your name and personal data.  I know this because I spent 35 years in junk mail selling you name and private information making a lot of money.

By my estimates—and this is because junk mailers refuse to release to the public just how much they make from what should be your personal property—the list industry grosses over $4 billion every year from you name and personal data.  I came up with a formula back in 2004 to determine what would happen if one-half of that $4 billion was placed in a simple interest-bearing account in the early stages of your working career that you could tap at age 65.

The outcome was that junk mail shoppers could supplement their retirement income by an average of $607 per month.  Since a majority of Americans do buy regularly through mail order, they would automatically enrolled in the program.  Plus, when the advantages of this program were noted by the balance of the population, junk mailers would naturally add new customers.  Those people remaining would then be more manageable for the feds.

In 2008, nearly 40% of retirees received their income from Social Security.  Maybe it is this group where junk mail supplement should be most applied, using some kind of formulation for fairness.  Another 19% have pensions and annuities, 23.7% from earnings, 15.4% from other assets such as IRAs.  However, in low-income households, 87.6 of their income came from Social Security, another profile the junk mail supplement should favor.

In all cases, high incomes and the wealthy would be eliminated from receiving the supplements.  These conditions combined would easily increase the $607 monthly figure for others.  

FDR signs SS Act in 1934
What we have agreed on here is the fact that we want to save Social Security and most of us prefer that it stays close to its current format.  Yes, we have to attack the two biggest drains on the economy, SS and Medicare, but we don’t have to take a scalpel to it as the GOP would have us do.  A junk mail supplement may be a far out answer to the problem but, then, Social Security was considered unparalleled when FDR signed the SS Act in 1934.

Friday, February 24, 2012

Eliminating the penny could shut down the junk mail industry

When is the last time you saw anything in a junk mail catalog that didn’t end in 99 cents?  Well maybe sometime they fudge with 95 cents but that’s pretty rare.  I spent 35 years in this business as a data broker and consultant and when I first started it was impressed on me the value of using the word “free” and never using a rounded off price.  And it’s not only junk mail; traditional retail establishments use the same ploy.

Gasoline prices end in 99 cents.  Dollar stores even sell many of their products at 99 cents. has a 99 cent Lady Gaga album and authors sell their e-books for 99 cents.  The Dish Network has 99 cent movies and one game maker was selling its games for 99 cents.  Some companies have an offer to ship your merchandise for only 99 cents and one 99 cent chain is in the middle of a huge buyout that will no doubt end in a selling price that includes 99 cents somewhere.

Do they think we’re stupid?  No, so thought David Gold in 1982 when he opened his first 99 Cents Only store in California.  The move was prompted when he tried using the 99 cent approach to selling wines in his liquor store he wanted to move, and friends told him he had a concept that should be expanded.  Dollar and 99 cents stores are now found in most cities around the country.  One of Gold’s first promotions was selling a limited amount of TVs for 99 cents.

Wikipedia calls it “psychological pricing,” which it is by using odd prices like 99 cents with the theory that it increases demand.  I doubt that and firmly believe that if you sold an item for $5.00 instead of $4.99, consumers would buy it for the sheer novelty.  At least until the impact of the change wore off.  From a study done back in the late 1990s, it was found that 60 percent of advertised prices ended in the digit 9, 30 percent 5, 7 percent in a zero.

Just think of the money that could be saved by rounding prices off.  Without all the 99 cent digits gone, catalogs could be smaller or contain more products and junk mail could lower prices even more.  Gas pumps could be narrower without the .99 extension and fuel prices could be lowered.  Retail outlets could use smaller signs in stores without all the .99s meaning they could hold more sales with more price reductions. 

In 1970 when I entered the junk mail business they were already using the 99 cent price calculation so David Gold might have gotten his idea from receiving one of their catalogs.  In case you don’t know, the purpose of the junk mail offer is to “get your attention,” then get you “involved” so you end up buying something.  It was determined early on that a round figure was not attention-getting, thus, the move to just one cent lower than the round figure. 

You might wonder, had the industry gone with the round figure, just how much more profitable could it have been.

Typical Victorias Secret ad

On the other hand, junk mail companies sell your names from their mailing list at round figures.  It’s almost as if they think the buying public is dumb enough to fall for the 99 cent subterfuge but other junk mailers they are selling their lists to are not.  Based on my 35 years in the business, I would take exception with that.  For perspective, the lingerie catalog Victorias Secret sells its customer names for a base price of $115 per thousand names.  This can increase dramatically to over $200 per thousand names if junk mailers want things like age, income, etc.

My gut tells me that the public has seen this 99 cent thing for so long that it doesn’t do anything to incite them to make a purchase anymore.  However, when you have developed a habit like this based on, hopefully, some logic that was inspired years ago, you’re not likely to dump the idea without new logic.  Junk mailers are much busier at this time trying to figure out how to wring even more bucks out of your names; they gross over $4 billion annually now.

Read more here about eliminating the penny.

Friday, October 28, 2011

Think your personal data is safe? Think again

I spent 35 years in the junk mail industry selling your names and personal data, making a lot of money doing it.  That’s the reason companies are so anxious for you to reply to their offers, asking you to “tell them all about yourself.”  All about yourself garners over $4 billion annually for junk mailers and data brokers who hawk your private information like any other commodity.  Years ago when I started in the business, security was at the bottom of the priority list.  Profit was number one.

This has changed in the last few years with the number of personal data breaches soaring, and identity theft becoming the top consumer complaint according to the Federal Trade Commission.  The top five states in 2010 were Florida, Arizona, California, Georgia and Texas.  South Dakota was last.  You can see the full FTC report here.  The largest age group hit was 20 to 29, followed by 30 to 39, then 40 to 49.  Those age 60 plus surprisingly accounted for only 13 percent.

And then there was the massive hack into RSA SecurID tags in March of this year.  RSA provides additional security to 40 million customers to prevent unauthorized access to their data systems.  RSA’s SecurID tags are a two-factor authentication solution that provides additional security to its clients.  This includes, along with the normal username and password, a key fob or token in randomized code that must also be entered.

The hackers could now possess the keys to circumvent companies’ database protection.

RSA described the attack as an “advanced persistent threat” (APT), an approach that involves “…patient, skilled, well-funded attackers…”  It was carried out in three stages.  First, “phishing” emails are sent to employees of the target company.  In RSA’s case, one opened the message and then opened an attached Excel file.  Bingo, malware installed through the backdoor. 

Second, the hacker, in control of the employee’s computer, steals his or her passwords and uses them to enter other systems where sensitive data is housed.  Three, extracting files from RSA to a hosting provider’s hacked machine, the data is then downloaded to the hacker. 

The security industry believes there have been other victims, companies not willing to talk openly like RSA.  Those affected by the RSA breach include giants like Amazon, Google, Facebook, Yahoo and Microsoft.  Other large corporations were Charles Schwab, Freddie Mac, Wells Fargo, Intel and IBM.  Government agencies named were the General Services Administration and the IRS.

Security analyst Brian Krebs said: “The sheer number of corporations mentioned in the list proves that no one is safe from attack.”  He added: “That’s why these attacks are called ‘advanced persistent threats.’  They often carry on for years without anyone knowing.  But RSA says they feel no damage has been done to the best of their knowledge, and some of its client companies may have fended off the attacks with no damage done.  You can see a list of all the companies involved here.

There is a treasure trove of personal data in this list which could yield the bad guys just about any information they wanted on most individuals in the U.S.  And this is only the beginning.  The key fobs or tokens were on the Internet underground within hours, and many of us won’t know for months, perhaps even years, if our private information is going to be stolen.

Read more here and here.

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