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NY Attorney General Fines Michaels Stores!

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

  1. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    one thing i thought of is, money talks. maybe the Governments dont' want to do anything becasue they bring in a lot of money.
  2. johnny

    johnny SGF, Supreme Grumble Framer

    I really think they just can't do much because Michael's only violates the spirit of the law when they are running their dark days or weeks.

    My understanding is that during their investigation in NY they found that they were not running those dark weeks. When we make complaints I think we have to watch our nearby stores for a long time. Go there every day. And make sure once every 12 weeks they are dark. Because Michaels didn't have to change their offers to become compliant, only had to satisfy the law in the most technical way.

    The conditions of the law are not for the AG to decide. They are enforcement. If you want the law changed then you should be also sending letters to your state senators and your governor. But since these laws would effect all of retail, not just for picture framing, it would be a long and arduous task with little hope of relief for us.

    Unfortunately we have huge monsters that are running over our industry. Its like we are playing in a sandbox and they walk by with their elephants that take a dump in it. The law says that as long as the elephants only take a dump 93% of the time that they walk by they are entitled to do it. So who do you go to, the law enforcement or the guy writing the law?

    As much as I hate what the big boxes are doing I have to add that the problem precedes them. They are the biggest offenders though. For years before Michaels came along we had competitors that ran discount sales to every customer that came in their shop and the sales never ended. They are largely out of business now, we have 1 left and his family is a popular moulding manufacturer so he's not going anywhere no matter what. They were replaced by Michaels and Joanns, Hobby Lobby and other local craft stores that can be pretty large. Here we have one called Catans.

    This weekend I had a link to the Michaels story on my website. My site received thousands of hits, not because of the link but the link did end up getting a lot of eyes. I'm having my best weekend of the year. I know I beat the local Michaels at least 2 weekends out of the last 4. People drove by multiple Michaels just to shop here. The link isn't why, but I'm sure a ton of people saw it. And I have a really strong brand in the area which helps. Some customers drove nearly an hour each way. Overall, posting the link has to be good. If we keep watching for when they slip up maybe we can get more action.

    We should start a task group. Meet on a board. On this one if we're welcome or start up a private free one if we're not. 1st order of business, we find out what the law is in every state. 2nd order of business people agree to watch their nearest big box store or anyone else who is shady, more than just Ms, and make sure they are following the law. We post the results of our watching each week and if the store is in compliance or not. If one falls out of compliance we start a letter writing campaign.
  3. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    I guess i see your point.

    my other competiors have their sales all the time too. 20% off, and 60% off.

    I did ask the guy with the 60% off one if its really 60% off my price, he said yes.

    I said, do you profit from it. He said no. I said why do it??? he said its what his customers are used to and if he stops he will go under.

    DUH@!!!!!! that is what M's does, and has done to themselves as well.
  4. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Where did this 12th week test come from? The litmus test I believe is what happens to prices when a sale ends. They need to revert back to the "un-sale price".

    If you run the sale 95% of the time, the sale price becomes your defacto regular price. Hence, there is no real sale.
  5. johnny

    johnny SGF, Supreme Grumble Framer

    I read it in one of these articles or somewhere, that they became compliant by stopping the sale every 12 weeks. The important thing is that the laws may vary in each state and we should find out exactly what they are for each.
  6. tedh

    tedh PFG, Picture Framing God

    and :

    contact your local consumer news reporter.

    see if they want anything to do with it to shed light on the subject in your state.

    they should love it since its a corporation vs little guy.
    Sounds like I'm repeating myself: here goes:

    The NY AG and Michaels have given us a big opportunity to get back the customers Ms has taken from us through misleading ads, and we have to act fast. So far, so good?

    We need to conduct a guerilla marketing campaign, which includes the activities listed above, and more. Here's what I can think of in 5 minutes or less:

    - lobbying all state AGs with written complaints. I'll volunteer to draft the complaint letter.
    - press releases to every local media outlet from an industry association, but tailored to your local frame shop for impact. I'll volunteer to draft this
    - window signs
    - published price comparisons with store signs and handouts in packaged frame jobs
    - perhaps a letter to Michaels' general counsel from the president of the PPFA, asking them to cease and desist in all other states, and describing the impact of their actions on PPFA members, cc'd to state AGs and included in the above press release. I'll volunteer to write the letter.

    Now think about how much more effective everything here would be if we had it screened by a professional marketing firm, and vetted by a lawyer.

    See why we need a central group to oversee all this?
  7. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    go for it, ill send it all in and fill it all out.

    I am horrible with writing though :)
  8. tedh

    tedh PFG, Picture Framing God

    Link to the Web Site

    Hey Johnny: I'm not the sharpest knife in the drawer...I never thought about linking my web site to the NY AG. Great idea!
  9. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    Im going for it, will keep you posted if you care.

    Hi Jason,

    Thank you for writing the Consumer Unit at NBC4 Washington. So sorry you have had this problem with Michaels. I will pass along your story idea to Liz and the rest of the Consumer Unit, and we will be back if we need additional information.

    In the meantime, we recommend filing a complaint with the Attorney General's Office

    Thanks again for writing,


    Katie Roberts, Chief Researcher
    Liz Crenshaw's Consumer Unit
    NBC4 www.nbcwashington.com
  10. johnny

    johnny SGF, Supreme Grumble Framer

    From what I can tell from this report, Michael's pays to have "joann fabrics coupon" as a google adword to direct consumers to their own weekly specials page. Hahahaha!


    Considering how prevalent the word "coupon" is there and in everything they do there just isn't any way anything is ever going to get them to become honest, not even an Atty Gen.

    Maybe the effort that seemed to have started can solicit some donations and buy some micheals related google adwords to drive their potential customers to the news stories.
  11. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    I thought other framers might be interested in THIS profile of Eric Schneiderman.
    :kaffeetrinker_2: Rick
  12. jim_p

    jim_p SGF, Supreme Grumble Framer

    Funny... just today I decided I wanted to post a link to the AG's press release on my Facebook page, only to find that I can't get through to www.ag.ny.gov...
  13. tedh

    tedh PFG, Picture Framing God

    Canadian Call to Action

    Here's part of the Competition Act that applies to us:

    (1) Any six persons resident in Canada who are not less than eighteen years of age and who are of the opinion that(a) a person has contravened an order made pursuant to section 32, 33 or 34, or Part VII.1 or VIII,
    (b) grounds exist for the making of an order under Part VII.1 or VIII, or
    (c) an offence under Part VI or VII has been or is about to be committed,
    may apply to the Commissioner for an inquiry into the matter.
    Material to be submitted
    (2) An application made under subsection (1) shall be accompanied by a statement in the form of a solemn or statutory declaration showing
    (a) the names and addresses of the applicants, and at their election the name and address of any one of their number, or of any attorney, solicitor or counsel, whom they may, for the purpose of receiving any communication to be made pursuant to this Act, have authorized to represent them;
    (b) the nature of
    (i) the alleged contravention,
    (ii) the grounds alleged to exist for the making of an order, or
    (iii) the alleged offence
    and the names of the persons believed to be concerned therein and privy thereto; and
    (c) a concise statement of the evidence supporting their opinion.


    In brief, six citizens of Canada can start an investigation into Michaels advertising claims. The Competition Bureau is legally restricted from commenting on anything, so my complaint of 2 years ago may or may not be active. Just in case, my submission is going in this week, and there will be an investigation as required by this Act.

    I strongly recommend that all Canadian framers get going on this, file their own request, and get the Bureau kickstarted. If you want my wording, let me know.
  14. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    Does anyone think we are hurting ourselves ( the little guy) by proceeding against the craft stores like this?

    I have had different thoughts from different people about this.

    Things i notice are, I never see other companies complain about price, or even other companies false advertising, or sales prices.

    Its like the haircut commercial... we fix 10 dollar hair cuts.

    Maybe we shouldn't be doing this? Do what Jim said in another thread, at least the way i take it is, work on your own business.

    I consider this kind of working on my business, but is it the right way to go about it?
  15. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    I made a sign right after that commercial came out that said "We fix 50% off Framing".

    I kept it in the window until it faded.
  16. johnny

    johnny SGF, Supreme Grumble Framer

    Your customers are smarter than mine. I'd have customers in here asking for the 50% off price they saw advertised in my window.
  17. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    I could so see that happening here. I have people say, I saw your ad in the paper with a discount, but I forgot it, I just say, I don't advertise so it probably wasn't me...
  18. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Mine would say it doesn't say you charge money to do it.
  19. frameconscience

    frameconscience In Corner

    Working only on our own business while ignoring what the craft stores do, is a strategy that doesn't seem to be working too well. Also, they're not mutually exclsuive options, you can do both. I don't think one can ever allow lawlessness and expect a good outcome. The good guys only win when they fight back. History has proven this time and again.
  20. johnny

    johnny SGF, Supreme Grumble Framer

  21. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    It is no secret that Swegin' is my hero!
  22. johnny

    johnny SGF, Supreme Grumble Framer

  23. tedh

    tedh PFG, Picture Framing God

    This question begs a reply:

    Here's my logic:

    1. Everyone knows of Michaels and its AOS;
    2. Michaels has taken business away from me;
    3. Michaels has admitted to, and is supposed to stop, "duping" customers into thinking they were getting a real deal;
    4. If I can get my tax dollars working to stop the above, who wins?
    5. If I don't do it, who the **** will? Santa Claus?

    I have another personal philosophy, much more concise: "Those *******************s have to be stopped!"
  24. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    Those are my thoughts until one person brought up, what if they decide to sue you. Then what?
  25. frameconscience

    frameconscience In Corner

    Terrorism works that way. The idea is to paralyze people with fear.

    I'm not judging you, but if your store got robbed at gunpoint and the robber told you to never call the police, what would you do?
    If you decided to do nothing, how would you feel later? Would you feel secure? Would you feel good about yourself?

    Leaving the problem for someone else to deal with is always an option. Hopefully not everyone chooses that option. BTW, what exactly is it that you think they could sue you for?
  26. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    slander if the laws aren't the same in your state about sales like in NY. Other than that I can't really think of much.

    I think Id shoot them if i had the chance as they were leaving, but of course i wouldn't call the cops while they were there.

    maybe not after either... who knows if they come back before they are found? Having to go to the back to get my gun is a little trickier said then done unless I saw them coming... then id shoot first ask questions later.
  27. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    I'm not for Michael's AOS. And, in at least some cases they have been and/or are breaking the law about such and should be stopped.

    But. This same basic concept keeps coming up in this recent rash of threads, and it has caused me to think about what's really going on. And maybe why there has not been enough support amongst independent framers to do anything about it. The problem, as I understand it, is that the AOS's are already very close to the letter of the law. The laws vary from state to state, but in some cases they may just need to not have the sale for a period of X days every Y months. Does anyone really think that even if they do follow the letter of the law and quietly suspend their "sale" from time to time that it will make any difference to John Q Public? They will still make a big deal of the huge "SALE"s they have 95% of the time, and the average person will still think they can get half off at Micheal's. I believe I recall seeing previously on TG from a Big Box employee that they will tell people to come back tomorrow or next week when the sale starts up again if they are in a blackout period.

    To make an actual difference in your life/business I see only two things you can do about the AOS's.

    • Support efforts to introduce legislation that would put more realistic restrictions on AOS businesses. This will take a lot of time, effort and maybe money, and you may not see the change in your lifetime. Not likely to get a lot of support for this.
    • Ignore what "they" are doing and concentrate on what you can do.
    Again, if/when anyone is breaking the law, I applaud any effort to put an end to it, but I don't see it making a measurable difference to the business of the independent framer.
  28. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    If independents were to advertise more people would consider them when it is time to frame something. Can't tell you how many people say they didn't know this town had any custom framers. Customers drive past 20 or 30 to get to me.

    I wouldn't recommend advertising that a shop can complete the most exepensive job in the world. May be concentrate on the availability of very affordable options even if you wish to sell the best. You can't sell the best if you don't get them in the door. Maybe use terminology such as "Posters to Picasso's we have the prices and designs you'll love".

    The BB's are not cheap ever. They still make a lot of sales since they get customers to come in to get designs and prices.
  29. tedh

    tedh PFG, Picture Framing God

    Every jurisdiction has varying precedents, but up here it has been established in several decisions that the offender has not sold enough merchandise at a "regular" price to be able to claim that the sale price is indeed a "sale" price. I'd bet that one week out of twelve is nowhere near the time needed to establish a regular price.

    If we win, will it make a difference? How's this scenario: Michaels has to sell their $350 needlework job for $700, when my charge is $175. How long do you think they'll be in business trying to sell enough frame jobs at double their current prices? The previous poster who mentioned that the Michaels store clerk told a customer to come back next week is dead wrong: they have to have sales, not just a dead week, to establish a regular price. Telling people to come back next week avoids the regular sales they need to establish regular prices.

    And.... don't forget also that the Competition Bureau can seize business records. So can your AG.
  30. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    Do you see the irony in that statement? :)
  31. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    Now that is funny.
  32. pwalters

    pwalters SGF, Supreme Grumble Framer

    Just be careful. The M's here in STL just follow the rules. It might look like they don't, but there are various weeks where the custom framing coupon is for ready mades or other items. They switch back and forth between discounts off the frame, discounts off the whole order and discounts off other services. So before you all run off there half cocked, I'd encourage you to have your ducks in a row. Think the boy who cried wolf. They'll listen to you, at least the first time.
  33. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I wouldn't be concerned about litigation from them, unless the message goes beyond truth and gets into serious slander. There would no monetary gain for them. As I see it, their only motivation for legal action would be to set a precedent by making an example of an egregious offender.

    Suing you could make them look like aggressive bullies, picking on "the little guy". In that case, I would suggest calling every local, regional, and national news service, as well as "60 Minutes".
  34. FraminFool

    FraminFool True Grumbler

    Sorry, Dave. It may not be making a difference in Chester Vermont, but believe me - it's making a difference in Latham, N.Y. I can literally walk from my store to 3 BB's or take a 5 mile drive to a fourth, and I think I'd be naive to think it wasn't "making a measurable difference". That's precisely why I filed my original complaint with the AG - they're killing me!
  35. FraminFool

    FraminFool True Grumbler

    Just curious - Are there any other NY framers viewing this thread? I've had a conversation with the attorney who acted as Legislative Counsel to the Committee that drafted and passed the legislation that would allow us as competitors to petition the Court for an injunction against Joanns and AC Moore for false advertising. He feels very confident that given the abundance of evidence (printed ads) it is likely that we would prevail.
    This process would be much more expeditious than waiting for the AG to get to the point where they would act as they did against Michaels.
  36. tedh

    tedh PFG, Picture Framing God

  37. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    I think if you go back and read what I said again you'll see I didn't say that their sales tactics aren't making a difference to the independent. What I said was that forcing them to stick to the letter of the law is not going to make a measurable difference. No one can prevent them from having 50% or 60% off sales and they will continue to do that because it's obviously working for them.

    Again, the biggest issue IMO is that the laws are too loose regarding sales and they are taking legal advantage of that. Sure, they occasionally go beyond the law, but realistically in proportion it's probably not that different than going 75 in a 65. Most of the time you won't get stopped, but if you do you pay the ticket and maybe slow down for a little while. But as long as everyone else is driving 75, even though it's against the law, you probably won't even get stopped.
  38. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    The article said that M's had started using the practice in 2009.... Doesn't it go back much farther than that? Sure feels like we have been complaining about it ever since I joined in 2002 :)
  39. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    I agree. They're not going to stop their inflated-retail/deep-discount marketing until it stops working for them, which may be a long time. There are plenty of ways they can continue that advertising within the laws of the states. And if they overstep the law and get caught occasionally, they can afford to pay the fines. Nobody's going to jail over this sort of thing.

    Moreover, even if the mass-market framers did change their advertising message, they would still crush small independent framing competitors simply by continuing to overwhelm the little guys' marketing/advertising efforts.

    Let's say Michaels would cut their retail prices in half and completely stop discounting. That would be exactly what small frame shops are demanding, right? But wait...Then they would build another professional ad campaign around another consumer-friendly marketing message. For example, they could simply tout "everyday low prices".

    If the mass marketers campaigned a new message just as they do now, in beautiful color postcards and color inserts in Sunday newspapers, that would still reach far more consumers and have far greater impact than anything a small independent framer could publish.

    Again, price is not the real issue. As we all know, small framers can not only beat the big-box framers' prices, but also offer better designs, higher quality, more selection, and faster delivery. The big-box, mass-market framers' professionalism in marketing, advertising effectiveness, and huge ad budgets are their advantages.

    I'm sure there are other ways to win, but these two strategies seem to work well for small independent framers:

    1. Go where the big-box framers have no stores. This is a run-for-your-life marketing strategy that works only until they move into the neighborhood.

    2. Build a niche business. Sell the types of framing that they can't or don't want to sell.
  40. David N Waldmann

    David N Waldmann SGF, Supreme Grumble Framer

    Actually, I'm not sure that's accurate. While indies often DO beat BB prices, I think that if the BBs wanted to they could totally blow indies out of the water on price. But they choose not to. They use their vastly greater gross margin to market the pants off the indies, put some in reserve for the occasional "speeding ticket" and still take more to the bank than the indie.

    Part of the problem is that the average person just knows that because of economies of scale, purchasing power and cutting out of middlemen that the BBs have lower costs than indies. They assume that in such a cutthroat market their prices must also be commensurately lower, whether in conjunction with or completely apart from the apparently never ending "Sales".
  41. Jim Miller

    Jim Miller SPFG, Supreme Picture Framing God

    You may be right about that, but my reference is to what is really happening in the marketplace, not necessarily what is possible.

    Your point is well taken in any case: The consumers' perception that mass-market framers have lower prices is all they need to beat us.

    Turning the conversation around, if the big-box stores decided to actually offer prices that small framers could not possibly beat, then they probably could not afford to advertise as much as they do. Then their marketing advantage would be diminished. As much as we would all love that scenario, I'm sure they're too smart to try it.
  42. tedh

    tedh PFG, Picture Framing God

    Then the writers are incorrect.

    I found a case in San Diego Superior Court - Carrie Salisbury lodged a class action against Michaels Stores and lost. The attorneys were Jones Day. Anyone know anything about this? 1998.
  43. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Most likely due to a statute of limitations as far as the date.
  44. HB

    HB SGF, Supreme Grumble Framer

    Here is a question...while I confess not reading every word of this thread, seems many have stated they are, or recommend posting or using other methods to notify their clients of M's evil practices being condemned by NY. How is that supposed to benefit us. In what way does my client benefit by this information!
  45. Bob Doyle

    Bob Doyle SPFG, Supreme Picture Framing God

    I think that can go back over 7 years. More likely has to do with evidence gathering, and making sure that you can prove that all the instances are connected and consistently deceptive.

    Maybe also the intent of this case, or an outcome of it, could be to tie the adjudicated practice to the practice being used for a longer period and to increase the penalty M's has to pay.
  46. HB

    HB SGF, Supreme Grumble Framer

    Another question...What is the point of advertising on the G (which seems to happen quite a lot) that a framing business matches or even beats a competitor's price (esp big box)? I just can't figure out how that is worth even discussing. The way I see it, no one has a good business because its prices are the cheapest; and no one has the corner of the market based on having the lowest prices...no one! In fact, its not usually in most customers' best interest if I am the cheapest framer in town!

    Being efficient, productive, active, talented, professional, reliable, dependable, readily available, AND affordable are a few of the attributes of a good business. I'd say M's has at least 3 of those down to a science such that 90% of anyone trying to beat them at their game will fail miserably.

    In my experience all of my previous competitors bragged about having the lowest prices. Most of them are gone. As for me, I'll take advice from the many "experts" that endorse the above mentioned qualities and APPEAR TO HAVE MADE A GOOD LIVING AT IT.
  47. FraminFool

    FraminFool True Grumbler

    Well, it's been four weeks and over 10,000 views of this thread, and I have one question to all contributors : Have you actually done anything in your own locales to try to stem the deceptive advertising of your Big Box competitors?
    My experience in NY and the small victory won against Michaels has impacted only 48 of their 1,000 stores. I'd like to think that others were taking some action to increase the pressure nationwide.
    It doesn't have to become a part-time job for you - but you do have to start before you can finish.
  48. Puppiesonacid

    Puppiesonacid SGF, Supreme Grumble Framer

    I got the story on my web site, but no local news stations seem to care.

    Im sure there aren't enough letters going to the attorney general here to make them care either. Hearing from one person 100 times is still only 1 person.
  49. lastboat

    lastboat CGF II, Certified Grumble Framer Level 2

    Can other Michaels in NY still advertise in a similar way with offering the 50% etc??
  50. FraminFool

    FraminFool True Grumbler

    No, they've had to modify their "offers". In the Albany, N.Y. market, they've begun having special pricing on particular "lines" of moulding - eg. "50% off the Cornici Line of Frames".
    This change may seem benign at first glance, but I think as soon as the consumer senses a restriction on an offer - they begin to suspect that the item they want might not be on sale, and won't be as inclined to go to the store to find out.
    Not the best solution - but it's better than nothing.
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