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NY Attorney General Fines Michaels Stores!

Discussion in 'The Grumble' started by FraminFool, Sep 19, 2011.

  1. FraminFool

    FraminFool True Grumbler

    Finally, NY AG Schneiderman has fined Michaels Stores 1.8 million dollars for deceptive advertising of its' custom framing service! Press release out today. Perhaps those of you in other states should pursue it with your own AG's.
  2. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer


    It's a great day for our industry, but Jo-Ann Fabrics, Hobby Lobby and the rest must also be stopped.
  3. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God


    Is this for real?
  4. Beveled

    Beveled SGF, Supreme Grumble Framer

  5. wpfay

    wpfay Angry Badger

    Michaels arts and crafts store has agreed to pay an $800,000 fine in addition to donating $1 million in supplies to 724 schools statewide, including eight in Cayuga County, for engaging in deceptive business practices, the state Attorney General's Office said Monday.
    According to the attorney general, Michaels agreed to the settlement for engaging in deceptive advertising practices by misleading consumers into thinking they were receiving steep discounts during a two-year period.
    Some of the sale prices listed in the store's advertisements and flyers continued during that time period and never ended, the office said. State law prohibits sales that never end.
    Michaels also agreed to stop the deceptive advertising, the attorney general said.
    "For years, Michaels duped consumers into thinking they were receiving huge discounts, when in fact, they were simply paying the regular store price," Attorney General Eric Schneiderman said. "Through deceptive advertising practices, this company violated the law and took advantage of hardworking consumers trying to save money. In addition to the civil penalties, the company is paying for their actions by providing $1 million in school supplies for hundreds of school districts statewide."

    Read more: http://auburnpub.com/news/local/article_99da45c2-e2e1-11e0-862d-001cc4c002e0.html#ixzz1YQPJ2GKz

    Edit: wonder if the school supplies are at their full retail value or their always on sale value...​
  6. Creative Chicks

    Creative Chicks SGF, Supreme Grumble Framer

  7. FraminFool

    FraminFool True Grumbler

    Stay Tuned.
  8. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    I wonder if they come with a framing coupon :)
  9. Creative Chicks

    Creative Chicks SGF, Supreme Grumble Framer

    I've been reading all the media articles on this subject and I'm curious if all the other Big Boxes will get the hint that people's eyes are opened to their "sales" and they could be in for the same lawsuits if they don't straighten up and fly right?!?! It's going to be interesting to see what happens in future advertising from them.

  10. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    Wow. Great news. The crowbar is now wedged in the door.
    :cool: Rick

    What do you all think about publicizing this on our web sites or facebook pages? Would it help carry on the process of exposure that has now begun, or would it be seen as denigrating the competition, and therefore tacky?
  11. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Even though the punishment is kind of soft - Gift cards? C'mon. - it does open the flood gates and it now lets all of state without fear of reprisal that Michaels has been ripping off the public.

    It also gives us something we can email to each of our customers, and even make reference to in our advertising.

    The floodgates have opened and leaves Michaels and it's AOSF brethren exposed to potential class action litigation. Afterall, every dollar Michaels took in from custom framing was $.50 more than they were entitled to. One disgruntled consumer and one agressive law firm is all it will take.

    It also provides ammunition for competitors who suffered as a result of these dishonest and illegal tactics.

    None of us should underesitimate the meaning and value of this action. This is huge and could have lasting benefits to our industry. I could not be happier about this.
  12. tedh

    tedh SPFG, Supreme Picture Framing God

    I filed a formal complaint two years ago with the Competition Bureau of Canada, and so far the b*st*rds have not acted against Michaels. I'm having the press release printed 24x36 and putting it in our front window. Then I'm refiling the complaint, this time not on the Internet but in person, with the decision in hand.
  13. wpfay

    wpfay Angry Badger

    Rick, I flashed on the scene from the Jurassic Park sequel where all the little cute dinosaurs with sharp little teeth overwhelm the stoopid human. Survival of the fittest?

    I guess the question is do we hit 'em while they are down, or wait until they get back on their feet? Then think of what they would do with a like advantage...

    Perhaps copying this to your own AG might be the first thing to do.
  14. kdub

    kdub CGF II, Certified Grumble Framer Level 2

    Probably full retail--they reach $1million in value with fewer items.
  15. NY Framer

    NY Framer Grumbler

    Any ideas how we can use this to help promote our businesses? I have made several copies that I am putting near the design counters so when the Michael's question comes up we can hand the customer a copy.
  16. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    IMO, we should try to make this go viral. I've already posted it on my Facebook page and will be emailing it to my entire business database.

    I think it's important to broadcast this to as many consumers as possible. The timing could not be better as it is the start of the holiday season.

    Consumers have known in their hearts that they were getting screwed by Michaels; today they have confirmation. For once, our voices can be louder than Michaels.
  17. tedh

    tedh SPFG, Supreme Picture Framing God

    I think every one of us should send a personalized email to the New York Attorney General's office, thanking them for the action, and telling them how important it is to our industry. No doubt they'll get calls from your jurisdictions.

    I just talked to the Competition Bureau up here, and apparently my complaint is still in process, even after two years. Governments don't act fast at times, so I sent their office the link to the NY judgement, and told them that we're hurting. Perhaps they'll get the message.

    Brings back memories of the NB truck that delivered to us, and was loaded with chops heading to the Ottawa Michaels. They deserve every penny of that fine.
  18. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    I'm not on Micheal's side, not even close. And I feel this decision was justified.

    But. Where do you get the idea that they were charging double what they are "entitled to"??? First of all, in this free market capitalist world a company can charge whatever they want, and people will buy their product or not. Secondly, you can clearly see from their P&L statements that they were not making 50% profit, so they couldn't have charged half what they did and stay in business. In fact, M's is a typically profitable mid-sized US business. Many shop owners on TG have reiterated that their prices are very similar to M's (the price the average consumer pays - after discount); so that shows that M's is charging about the "right" price. The only issue here is that they deceived their customers into thinking they were getting a much better deal than they actually were. That has led to greater market share and increased profitability at the expense of the indies.
  19. Larry Peterson

    Larry Peterson PFG, Picture Framing God

  20. johnny

    johnny SGF, Supreme Grumble Framer

    More important than the 2 mil, do they now have to also change their business practices?
  21. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    That is my question.
  22. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    This would be based on their own claims. They state the price is half of their own retail price but always charge the lower price. That act establishes what their own retail price is and therefore customers are entitled to half of what they spent.
  23. cvm

    cvm PFG, Picture Framing God

    I reckon in NY we'll now get to see what kind of real 'everyday low framing prices' M's can run on. Could be good, could be disaster for the Indy.
  24. Artrageous

    Artrageous PFG, Picture Framing God

    I agree that their deceptive pricing practices need to be curtailed, but they do spend tens of thousands of dollars a year in advertising that includes custom framing. I don't think any of us nor any of our supporting organizations do that.

    Some of their customers probably never had custom framing done before they used them.

    They may be doing some good for the industry as a whole.
  25. Mike Labbe

    Mike Labbe Member, Former moderator team volunteer

    Have any of the press releases mentioned the framing dept specifically? We might be talking about clay or dried flowers.

    It's good to see a company being held accountable, either way.

    Hopefully this doesn't also shed a negative light on customer framers. (probably not)

  26. Larry Peterson

    Larry Peterson PFG, Picture Framing God

    Well, 'Customer Framers' should have some negative light shed on them :icon21:
  27. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Do you really need me to explain this to you?

    M's can charge whatever they want. However, when they tell the customer it's on sale when in fact they are charging their regular price, that is when it becomes illegal and the customer is getting ripped off.
  28. johnny

    johnny SGF, Supreme Grumble Framer

    How ironic would be it if a damaging class action lawsuit eventually awarding 50 to 60% back to consumers would have the effect of increasing our Museum Glass costs. :icon9:
  29. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    So who would you call in your state to see if this can be done there? now there is precident...

    get out the old phone book and call till you find someone i guess. or the states attorney general, BBB.
  30. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Tru Vue is coming by tomorrow, would you like me to ask them for you.:icon9:
  31. johnny

    johnny SGF, Supreme Grumble Framer

    BBB = BS.

    In my opinion:
    Find a link to the actual press release and send it to your AG with a brief note of how it affects your state's consumers and also mentioning any others in your state that might be doing the same thing.
  32. johnny

    johnny SGF, Supreme Grumble Framer

    You can tell them they are batting an evil .666 so far today! 4 bad sheets and 4 good sheets plus 4 more good sheets to replace the 4 bad sheets. We're just gettin started though.
  33. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    The shipping cost on Artglass is beginning to look pretty cheap for you right now.
  34. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Don't waste your dime on a phone call, you need to complain in writing. Include copies of the ads, describe the in-store signage, and sure to include a copy of the NY AG's press release.

    The BBB? Never. They're even bigger crooks than Michaels.
  35. tedh

    tedh SPFG, Supreme Picture Framing God

    Read the decision, read your state's legislation, and see if there's a match. If there is, do the work for your attorney general: send in a full package, including Michael's' ads, a description of standard industry pricing practises, the NY judgement, and how your business is being affected.

    I did a lot of this two years ago, and now I'm really ticked that Canada didn't come first in convicting these ********. I may just ask the Minister responsible why there was no action in 22 months. If the bureaucracy doesn't respond, then time to go political.

    GUMBY GCF SGF, Supreme Grumble Framer

    here is a link to a list of all state AG's names or you can google "your state name" Attoney General that will get you to their web sites....


    Do it now even if you don't have the supporting ads. States need to pay for schools some how and if they think they can cuff a million towards the schools they may be eager to listen now.

    This is what happens when a few people step up to the plate. They take the time when everyone else just talks about it..
    We know who the ones are who stepped up and all the frame shops in NY should be thanking them...
    Go back and look at the threads on this you may see the grumblers who actually made a difference.
  37. tedh

    tedh SPFG, Supreme Picture Framing God

    If they continue to advertise as in the past in other states, the next Attorney General will increase the amount of the penalty, if the laws are similar state-to-state.

    Can't wait to see the amount of the next fine. The first $1.8 mil is just a cost of doing business.

    Up here, Sears Canada was fined twice, $1 million for the first, and more for the second conviction, for advertising a sale price when they never established a regular price by selling lots of goods at a regular price. It was held that the sale price was the regular price.

    This is the link to the NY press release: it does indeed apply to the framing operation.


    I think it's just a matter of time before two things happen: Michael's will stop doing it, and they will be convicted, or enter into a settlement, again.
  38. Dave

    Dave SPFG, Supreme Picture Framing God

    It's on my personal facebook page already. My friends are artists and the word and message will spread.
  39. mbboston

    mbboston CGF II, Certified Grumble Framer Level 2

    Yes it is on my Facebook as well. We need to spread the word.

    In addition, I don't think any independent frame stores have as limited (and bad) selection of mouldings as M's. Framing quality, or the lack of knowledge is a bonus.
  40. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    My guess is that their new tack would be "Now, low everyday prices... You don't need to wait for a sale."
    :kaffeetrinker_2: Rick
  41. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    Where I'm confused is when you say "every dollar Michaels took in from custom framing was $.50 more than they were entitled to". This implies that that net invoice amount was twice what it "ought" to be (whatever that is) and therefore, with a 50% discount already applied it follows that the original price was 4 times what it "ought" to be.

    Again, no argument from me.
  42. FraminFool

    FraminFool True Grumbler

    Actually, the press release was front-loaded with the "harm" inflicted on school children of NYS, BUT the specifics of the "deception" focus entirely on their custom framing advertising.
  43. FraminFool

    FraminFool True Grumbler

    Best to start with the AGs' consumer fraud bureau. Unfortunately, in NY there was no "form" for a business to complain about another business for unfair business practices. So, contact the AG using the approach that they should investigate "on behalf of the consumers of the State". I'd be happy to share any documents I've filed with the NYS AG to you if you like. Persistence is key, though. Be prepared for long waits and bureaucratic frustrations!
  44. Bandsaw

    Bandsaw MGF, Master Grumble Framer

    The majority of the population will still believe they will get a better price from a big box store than an independant.

    This myth, sometimes true, has been sold to the public for so long and so hard that it's become the "truth"

    A single legal case isn't going to change this - in fact I suspect the old saying "any publicity is good publicity" will apply here and M will continue growing their business.
  45. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    I would encourage everyone who's going to step up to the plate on this to visit your local Michaels store and check to see that the POS advertising has been removed or changed.

    Also, the phony ceertificate from some non-exxistant gallery that makes it look like their framers have training they don't actually have.

    All of these things have the effect of deceiving the consumer. Be sure to reference them with your complaint.

    Also, take the time to forward copies of the press release to your local media outlets. They may not be aware of this matter, so it could help to get the word out to the public.

    Need an ad? Apparently, Michaels has not changed its spots quite yet. We can monitor this for change.

  46. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Bandsaw, the public has long suspected they were getting screwed. Now their suspicions are confirmed. Not only that, but if they go to another chain and see the same tactics from Jo-Ann, Hobby Lobby and the rest, they'll recognize the scam for what it is and may just leave.
  47. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    Well, to be fair to M's, the 1/2 off has only ever applied to the frame itself, not the whole frame job. So their frame package prices are not double the "real retail" price, only the frame portion has been inflated and discounted.

    And that has been my personal issue with their pricing schemes. The unwitting customer sees the 1/2 off signs, sees the frame package bottom line and thinks "framing is expensive, glad i didn't go to that little full price shop..."

    Am glad M's got caught at deceptive pricing practices. Am glad they have to make restitution, but we should be accurate in our condemning of them :)
  48. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Bob, that's incorrect. The "Sale" required the purchase of a frame, but the supposed discount was on the entire order.
  49. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    Frame only? Not so, here. They often advertise "60% off your entire framing order".
  50. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    OK I stand corrected. To be honest I never really paid attention as I know my pricing is better and my framing quality inside the package is better. I don't see the need to emulate the pricing of an inferior product.

    I have taken their frame packages apart and sen the duct tape on needleworks. And the UV glass in backwards. My jobs are not perfect, but they are consistent.

    I will add that we are grown ups. We have seen court cases with big payouts to the consumer that go nowhere and do nothing to change the practices of the offending companies. I hope M's changes, but I don't really see how giving coupons to schools statewide is gonna hurt their bottom line :)

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