The California Legislature recently passed AB 2076, a bill which prevents out-of-area affiliate marketers – “Absentee Florists” – from using geographic misrepresentation to lead consumers to believe they are dealing with local florists – and the bill will be heading to Gov. Schwarzenegger’s desk in the next day or so for his signature.
How the bill benefits consumers:
– Buyers will get more flowers for their dollars by avoiding the hidden fees and service charges (often called ‘delivery fees’ but pocketed by these companies) and those fees range from $10 to $19.95. ‘Order gatherers’ also strip an additional 29%-31% of each floral order’s value via commissions and fees.
– Consumers specifically choosing to search for local florists – and supporting programs like the 3/50 Project – will have their dollars really spent with local businesses.
How AB 2076 benefits Californians:
– Local florists collect and remit CA sales tax while ”order gatherers’ – often out-of-state and even out-of-country – do not add this much needed revenue to our state treasury.
– Local florists also pay business and property taxes, employ tens of thousands of Californians and support our local communities. By using geographic misrepresentation, these affiliate marketers significantly reduce local business income and continue to cost the jobs of hard-working Californians.
We urge florists and consumers to fax letters of support to Gov. Schwarzenegger at 916-558-3160 as soon as possible, urging him to sign AB 2076. It’s time California stand with the 26 other states who have passed legislation to prevent distant call centers from pretending to be local florists here in our state.
Below are just a few examples of the types of geographic misrepresentation this bill will address:
New Jersey call center posing as a local Brea CA florist – complete with a map ‘location’.
And here they are, also claiming to be located in Fullerton CA
Distant call center (Colorado?)posing as two different local Anaheim flower shops – complete with claimed Google Places listings and phony addresses.
And a phony location in Buena Park CA…..
And another fake location in Walnut Creek CA… and hundreds of other California cities.
Fake ‘local’ flower shops also claim Yahoo Local listings – like these two examples:
And run ads deceptively claiming to be ‘Florists in Sacramento’ and having ‘Sacramento Flowers’ saying they’re ‘here in the city’ even though one advertiser is located in Oregon and the other sits in a call center hundreds of miles away in south Orange County.
These examples are just a very small sample of the kinds of geographic misrepresentation AB 2076 addresses. We urge Governor Schwarzenegger to sign the bill and stand up for California taxpayers, legitimate local businesses and their hard-working employees.
We’d like to thank the California State Floral Association for assisting with this legislation and the California Cut Flower Commission and the Society of American Florists for standing in support of it.
excellent
by linda
pass4sure
Isn’t it AB 1625 that talks about affiliate marketers (and, actually, hurts in-state affiliate marketers)?
The above examples seem to be relating to direct out-of-state competitors who portray themselves as in-state florists (sad, deceptive practice, you should indeed be against).
Geno –
The legislation does not use the term ‘affiliate marketers’ – but that’s what the ‘absentee florists’ addressed in this bill are. They assume all the trappings of being local – and dupe consumers without contributing to local our California economy – in fact, they remove many millions of dollars a year.
AB 1625, a different bill, is the state’s effort to recapture sales tax dollars lost via internet sales by out-of-state companies who ship to California residents.
I understand internet-only companies’ desire to not lose their sales tax advantage, but the current system leaves CA brick and mortar businesses – required to collect 8.75% to over 10% in sales tax per transaction – at a sever disadvantage.
The system is broken – but I’m not sure AB 1625 is the way to fix it.
What exactly is your definition of an “affiliate marketer”, CHR?
In the case of flower sellers, affiliates can sign up with FTD, Teleflora, 1-800-Flowers or FloralSource wire services and offer online or call-center ordering. They do not operate flower shops and are know in the industry and ‘sending florists only’ (SFO’s). The affiliates earn commissions of 20% (or more), rebates from the wire services ranging from $3 to $10 per order, and retain services charges paid by consumers during the ordering process.
To gain more orders, some unscrupulous affiliates use ‘local addresses’ when they have no physical presence, purchase local phone numbers with remote call forwarding, and list the ‘businesses’ with local-sounding names in order to convince consumers they are patronizing local florists directly.
The gathered orders are then sent via one of the wire services back to real local florists to fill and hand deliver – except instead of receiving the full dollars from consumers, the average order has been stripped of more 40% of the consumer’s spend – and the shopper has paid an unnecessary ‘service charge’ (typically $10-19) by going through a middle man.
The conusmer pays more, gets less for his/her dollar, and often doesn’t realized he/she has been duped until the flowers are seen – or end up NOT being delivered at all.
These affiliates are not like those of Amazon or Overstock. Neither company would put up duping consumers like the floral industry does.
Are these arrangements separate from or intertwined with FTD’s, Teleflora’s, and 1-800-Flowers’ affiliate programs?
They are both separate and intertwined.
I believe you’re asking about traditional affiliates who use unique codes in their links leading to the the main domains (FTD.com, etc…) to allow for order tracking – so the affiliates receive credit for helping generate orders. A few of those affiliates use shady practices, but most follow the rules and act ethically.
In the case of AB 2076, it addresses free-standing affiliates who actually process the orders themselves and pass them through wire services to local florists for fulfillment. Those orders can get mixed in with main site orders – especially when a local florist refuses to fill for one of the deceptive companies. The order can get re-routed to the same shop under the main company name’s account.
The wire services allow these ‘absentee florists’ to sell under many, many different ‘company’ names – and let them send through their networks under entirely different business names, too – so local florists don’t know the true origins of orders – until we’re caught in the middle of complaints.
One of the worst examples of rogue florist affiliates occurred a couple years ago when hundreds of Google Maps listings (for some of the most popular florists in the US) were hijacked by an affiliate marketer. It took months for some of the shops to get their listings back – and several have never recovered their positions in local search to this day.