Monday, October 3, 2011

White Collar Crime?


http://www.washingtonpost.com/realestate/reebok-to-refund-25m-to-customers-who-bought-easytone-runtone-shoes/2011/09/28/gIQATmUo4K_story.html

25 comments:

  1. I am obviously not surprised this happened and that Reebok, made false claims about the shoes to begin with. I am, however, upset that advertising is so imbedded into the minds and knowledge of people that, it is expected that advertisements and claims from large corporations are always true. I really wonder exactly how this money is actually going to reach the customer’s who may not be aware of this claim, and I won’t be surprised if the bulk of this money is paid out into fees and such. I really have a hard time accepting that time after time brand beats integrity and we continue to buy into these large corporations and their products because of popularity and social expectations (especially here in the United States) to wear and buy from brand giants. Additionally, the fact that these shoes are priced between $80 and $100 and are probably made for under $10 should really make us think. We are buying from a brand without any financial respect to its customers and on top of that, overpaying by a large percentage, just because brands matter.

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  2. I am not really surprised to find out that this product doesn’t do what it promised, what I am really surprised at is that legal actions were taken. How many products on today’s market promise certain results, but fail when put to the test? I think this is indeed corporate crime, considering these are big name companies that are lying to their consumers about the products they are selling. I personally have never bought any of these products, because I think it is ridiculous that a shoe could produce the results demonstrated on TV but for those people who bought these shoes and clothing expecting a certain result should received their money back. I also think the comments pertaining to the settlement out of court seemed a little fishy because they basically said that their product does produce the results but don’t want to got through the hassle of a trial. To me taking a settlement outside of court proves the product is faulty, because if I were these companies and my name was on the line for a faulty product, I would want to prove through the court system that my product was legitimate.

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  3. How interesting how a company uses an advertisement that turns out to be false, yet customers are not deterred from buying the product. I, personally, do not understand what is the big deal about wanting to keep up with the so called, "latest trend". People are so bombarded with what is in and what is not that they are drawn to buying a product without actually looking into the purpose of the promotion and whether it is false. On another note, there are people who can take a product and find another use for it, and use it that way instead of its intended purpose. As far promoting the athletic benefits of the shoes, yes, Reebok is in the wrong. If people like them because they are comfortable, then Reebok created a product that can be used for another purpose. As far as the refund I wonder how will they pay the customers who actually deceived.

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  4. As far as the comments on how horrible it is that we pay a jacked up price for merchandise that doesn't really do what it should, I go back to our discussion the first day of class. We discussed whether or not it's crime or just good capitalism to mark a product up huge amounts when it only costs you pennies on the dollar to create. I don't really believe it to be a crime to mark a product up. In all truthfulness if we really don't like the price then we will quite paying it. Business will go down and the business owners will have to mark their products down. That's just part of capitalism.
    However, misrepresenting information is much different. And the fact that Reebok folded so quickly and was very ready to settle out of court. This makes me wonder what all else is going on with those shoes that would make Reebok fold quickly so that a full investigation is not done. Now, could it be possible that those really do help some people tone up while doing nothing for other people? Yes, it is totally possible in my opinion. I know of people that wear the Sketcher's version of these shoes and have actually strengthened muscles using them. However they were also very sure to make sure that they were also helping those shoes in what ever way possible. I also know of people that have tried these "tone-up" shoes and have seen absolutely no results from them. But they just put the shoes on and walked around, noticed that their calves were aching a bit from walking in the shoes for several hours , and so quit wearing them.
    Yes I agree that wrongly advertising your product is definitely wrong. But so far that is the only thing that I can see as being wrong. Which from my perspective, if the product has been widely advertised on commercials and such you are purchasing the product at your own risk. What I've seen over the time that I've been paying attention to products on the market, if the product is on an infomercial or highly advertised then it probably does absolutely nothing that it is advertised to do.

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  5. I think consumers have gone overboard with Reebok. The slogan does state that the EasyTone running shoes tone up assets on your body and help force muscles to work harder. This may be true to some people but not apply to all people. I do not believe that this is a white collar crime; it is just a misleading advertisement. I have friends who purchased EasyTone shoes and they love them. Other companies have manufactured similar products to compete with Reebok, so does that mean they are liable for a white collar crime. My answer is NO. I believe no refund s should be warranted because the EasyTone shoes were not overpriced, and it is the people’s choice whether to buy them or not. My mother owns a pair of the EasyTone shoes and she told me that when she walks at a normal pace they are comfortable but when walking faster she can feel her muscles working. So bottom line is up to your own personal opinion.

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  6. Karma caught up with Reebok in this situation, thanks to the FTC’s snooping around. I could almost tell you that the real white collar here is the ones entitled to the settlement. They got a free pair of shoes and a check all because their buttock muscles did not produce 28 percent more strength and tone. This makes me wish I had gone out and bought a pair of these so I could reap the benefits. And, according to this analyst at a research firm for sporting goods says people are still buying the shoes. Are they spending their hard earned money for muscle tone or plain comfort? Comparing the sales numbers vs. the customers that want their money back will shed some light on that. Clearly Reebok did not perform the research and development to produce a shoe that pairs with its claims. All in all, Reebok needs to get their act together and release footwear that does what they say they will do. You could even blame it on the pressure to keep up in the market with competitors. It is difficult to say if there is really crime committed other than the false advertising, but the downs in sales volume isn’t because of this case.

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  7. Not surprising that Reebok would much rather settle the lawsuit rather than go through court. Since so many people have purchased a pair of tone ups, FTC officials would easily be able to prove their side. Reebok was able to use the placebo effect for quite a while with all the advertising about their shoes and clothing line promising to tone up your body. They used skinny people who normally work out and are toned to make the commercial to be able to target those who are over weight and looking for an easy way to lose the weight. I believe the people who did claim that they were able to "tone" up some body parts is because getting the shoe made them want to walk around more in it and in reality it was all the walking they did that helped tone their body rather than the shoe. I believe that Reebok took advantage of those looking for an easy way out of losing weight by making the product seem like it can do just that for them and all they have to do is walk around in them. They also figured that most wont really do their research about whether the shape of the shoe really does help tone or if its really the simple fact that walking everyday proves to tone your legs and butt. So in conclusion, always do your research and don't buy into the commercials.

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  8. Corporate crime indeed! But you know, as far as the overprizing, it's just a part of capitalism. Products' costs will cost the production line less and will cost consumers double or much more than what it truly costs. Price gauging (systematic overcharging) was taken place with the Reebok company and it's selling of the tone-ups, but it's just like buying a Lacoste shirt for $75 when they only cost the company cents! Just as we had stated in class, a good cause of this (capitalism)is that there is much competition between companies and creates a better product. Parallel pricing is the result of competition, where industry "leaders" set inflated prices and competitors adjust their own prices accordingly to make much more. Now will such a product work for every individual, obviously, in this case it is not so. Since tone-ups weren't something that satisfied all customers, yes, false advertising is a huge aspect that affected the company. But having worked with shoes for over 6 months, I have had much more customers visit my job after having purchased the shoes and have been given good feedback on them. Not everyone's foot is the same, therefore not every toning-up shoe will pertain to them. Not all blame should be put upon the company, when customers themselves don't give thought to the fact that not everyone's foot is the same; therefore, not every shoe pertains to them!

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  9. Honestly, I agree with Biz. It's personal opinion. For some people they are comfortable and some it works their muscles harder and then for the other people they don't feel anything. You have to look deeper. Are the ones who are saying that the shoe doesn't help them, are they out there just walking in them or fast pace walking or running. Just because you buy something that says it will tone your butt doesn't mean you should just put them on and sit on the couch. You have to contribute. I am sure that you could wear them daily and notice a difference. So they didnt hold up to the standards of working 28% more but thats the white collar crime, should they give people refunds? absolutely NOT! Regular shoes make claims saying that they are comfortable and they aren't so should those people get their money back to? I personally would pay $80 for a comfortable shoe. It's personal opinion and experience. Yes they false advertised but it shouldn't require full refunds at all. But that's my opinion.

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  10. There have been some solid and valid points made about Reebok and capitalism. However, we should go just a little further about this issue. Reebok is practicing good capitalism by marking up their prices to make a profit, but not only does Reebok mark up their prices the retailer also marks up their prices to make a profit. This is all capitalism at its best and I do not have a problem with that. Nevertheless, this does not explain why Reebok thought it was necessary to make false claims about what the shoes can do for a person. Consider this a white-collar crime because they are reaching for those people out there that are trying to exercise and get healthier with very little effort. A quick fix in other words. Yes, it is up to the consumer to research a product before making the purchase to see if the claims are legitimate. I’m not sure if the consumer should get a full refund of the purchase price but Reebok should be held accountable for the misleading advertising. The quick buck and keeping in line with the competition is what became Reebok’s demise in this situation.

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  11. I tend to agree with what Rebecca is saying. When a company marks up the price of its goods that is really only considered capitalism. If it was considered a white collar crime then there would be not companies in existence. Now the issue of false advertising, it is crime to make false claims about your product. But really how many companies don’t make some sort of false claims about their products every day and don’t get caught. The only way a company is going to be punished for false advertising is when the customers complain, as they did in this case with Reebok. I am sure that Skecher and other shoe companies have also had false advertising for their products, but are not being punished for it. And like Reebok said they are paying the fine and settling out of court. Usually the only punishment a company will have is a fine, which to them is usually not a bad deal. What the company doesn’t like is the bad media coverage. So they pay the fine to get it out of the spotlight, and continue selling the same products.

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  12. This not going to be good for Reebok at all. This story is a good example of capitalism. Reebok came out with these tone up shoes telling everyone that if they wear these they will tone themselves up without working out. This is also false advertisement. Why would you actually believe that if you wore these tone up shoes it will help you tone up? They are coming out with some ridiculous things these days. It is crazy that they made 1.1 billion dollars off of these shoes. All that Reebok is trying to do is make a quick dollar and try to beat the competition. In the end they will probably just end up with the fine and it not being that big of a deal and continue selling shoes by the way of capitalism. Also, I doubt all of the people that bought the "tone ups" will actually get there money back from Reebok.

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  13. This is definitely not an example of a white collar or corporate crime, at least in my opinion. I have never bought into the idea that a special shoe would give you better results than I don't know, going to the gym? Although Reebok did "trick" people into buying these magic shoes, they were doing what every business does to make quick money and to survive in the marketplace...they compete. The article makes an excellent point that we live in a society where we will pay money for literally ANYTHING with promised, quick results..such as skin firming lotion ("hope in a jar"), diet pills, easy tone shoes, it's all the same...but in fact how many products do we use in our daily lives that truely hold up to their promises? I do not believe Reebok should have to refund consumers because consumers found hope to a better butt in a shoe.

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  14. I honestly don’t believe this is a white collar crime. As mentioned, these shoes and the clothing might benefit some, but obviously not the masses. Before I would classify this as a WCC, though, I would have to see proof that people were fallen victim to the company and suffered some sort of hardship. The fact that they misled the public is poor business but it’s not necessarily criminal, and we see that every day in infomercials. If a person bought these shoes genuinely believing they could wear the product, do nothing more, and get a super toned, better looking body then they would have been sorely mistaken anyway. The Reebok company fessed-up, payed a settlement, and are now putting this all behind them. What more do we want? The shoes aren’t being taken off the market; they’re just not allowed to mislead people into thinking it will transform their figures anymore. And from what I understand Reebok is ok with that! So everyone else should be too. If you’re mad your shoes didn’t give you a good butt, start taking the stairs and that should do it. We really REALLY need to stop depending on things we buy and depend more on ourselves individually.

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  15. I think that any person who views advertisement about a product that can enhance performance, weight goals, (or any aspect pertaining to the body’s shape, size, and mass) and believes that change will come simply by walking in shoes, or taking dietary pill has no patience or understanding enough to know that a good diet and exercise is the key ingredient to altering one’s physique. Producers know that consumers are impatient and rely on fast products to make quick results in little time, so what better way of making money than by selling false hope. I mean if people could lose weight setting on a couch, they wouldn’t need to run on a treadmill. When cigarette commercials came out, they alleviated away from mentioning the hazards tobacco caused. McDonalds and other fast food restaurants show commercials that have the consumer salivating at the thought of a Cheeseburger and French fries; however they fail to mention the process by which they attain, maintain, and present the so called “fast food.” [SUPER SIZE ME PLEASE…… insider!] MY POINT IS the media never fails to leave out THE TRUTH. Even though my opinion is harshly toward the masses that find these products to be believable, I also think that it’s about time some of these companies get what they have coming their way. Yes the market place is a competitive field, but I don’t agree with lying to maximize profits. If one company sells lies and makes billions of dollars, how much more would this bait other companies within the market, whom most of us place lots of money and trust (i.e. Johnson and Johnson, Auto Industries, etc…) to partake in this sort of deceitful activity? I’m sure for this example with reebok I’m going too far, but if we accept our companies to feed us false anecdotes, know that white lies in high places kill! I do believe that this is White Collar Crime for the simple reason that on a lower level, students who cheat on exams face the punishment of expulsion at times. I think that it is equally necessary to fine and charge companies who cheat people out of products by telling stories.
    What goes around always comes back around. But until the world transitions from being this “microwave society” where we want results and answer right now we will always be setting ourselves up for a fall to becoming a victim of a capitalistic market.
    A good thing (an A on homework) can be attained fast thus the effects of the outcome will always have temporal effect.
    A great thing (college degree) can be attained but time is required, thus the effects of the outcome will always have a standing impact to be remembered that could last a lifetime.

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  17. Well I applied for my refund. I wonder what the percentage markup is on Tone ware, a dime on the dollar. I guess paying your customers is better business move than paying the lawyers and court costs. The cost of doing business for a bad company ad campaign is $25 million, not bad. They can take a business loss and make their customers happy, a win win situation. The shoes don’t tone but as walking shoes go they are pretty comfortable or the sales would reflect a negative. I think other companies could follow the example of Reebok and pay off the people who keep them in business and cut out the lawyers and free up the courts.

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  18. Reebok was feeding off of the American society by taking advantage of our lack of patience. This shoe was targeting the female population and their obsession with the shape of the thighs and butt. Men were also targeted with strength enhancing products. I do not feel sorry for the people who fell “victim” to this false advertising. I don’t see this as an act of white collar crime even though it is false advertising but what about the false advertising that harms people? There are more important false advertising cases that should be followed up on. Working out, for the majority is mental… if the shoes made people get out of the house more often to walk around then I see the shoes as a positive more than a negative.

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  19. I agree with a lot of people, that it is not surprising that the shoes from Reebok don’t do exactly what is advertised in the commercials. I also wonder why out of all the products on the market that don’t do what they are advertised to do, why is Reebok being singled out? I purchased a pair of Reebok RunTones, and I did not purchase them because I was told I would have a great butt. I purchased the shoes do to the comfort level and how good they fell on my feet. In my opinion, people who purchase products thinking that it will transform the way they look overnight are a little ridiculous. I understand why Reebok decided to settle for $25 million, because they made so much money on the product that it was cheaper to settle than have a long drawn out trial, which would have cost more money than the settlement.

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  20. This is almost humorous to see that people are so outraged by Reebok. I feel like it's kind of obvious that these shoes probably didn't do much as far as toning. Unfortunately, our society wants stuff to be done the easy way, and fell into the claims that Reebok was making. They probably need to realize that in order to gain toning, you have to be physically active. I'm not trying to be cynical about this, but seriously, the fact that so many people put their trust in shoes and believed that they could get toning simply by wearing the shoes or the clothes is just ridiculous. I don't think that Reebok should have to refund anything. I'm sure they are still pretty good shoes as far as comfort and they aren't hideous, so maybe instead of all the lawsuits, these people should just get in a gym and do the toning themselves. I guess I'm just bitter about this subject because I feel like everybody is just looking for the easy way to get in shape and they don't realize that it actually takes work.

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  21. Almost, all self-improvement, beauty product will have some form of false advertisement involved. It piggybacks on the thought of “hope in a jar” mentality. The numbers will always exaggerate in the best interest of the product.

    Since the release of this type of shoe from Sketchers, the ending results have been in the negative. The shoes caused more physical injuries and strain than what the makers claimed to enhance. There were more patients complaining of calf strain, upper and lower leg pain, ankle and foot pain as well as lower back pain since the use of the shoes. Not to mention the increased fatigue associated with the shoes use. Some consumers have even returned the shoes complaining they were either defective or did not do what it claimed it would do.

    I think that the consumers who bought the shoes are not just entitle to the settlement reimbursement but for those who suffered medically should receive additional reimbursement if not minimally for their co-pays for treatment visits.

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  22. no one got hurt hear so the idea of it being a crime doesn't fit to me. the worst thing that happened is that people were exposed and embarrassed for how lazy they are and think that buying a shoe is going to make them skinny. this is just another great example of how lazy and impatient we can be as consumers and as people. always looking for a "quick fix" and not wanting to work for anything.

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  23. Easy tone and all these other fitness shoes are all crap. Fitness shoes were just an concept that was planted in the minds of consumers and the idea of an easy workout that could possibly work did the rest. It was a quick and easy buy for consumers and a quick and easy sale for all these companies. I do not think the settlement or even the lawsuit was necessary. There is not a guarantee on the shoe and no medical research to back it. This is not corporate crime, just intelligent marketing by appealing to our fat and lazy country.

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  24. I am glad that a company like this has finally been caught and forced to pay the punishment, quite literally! Reebok should not have made these false claims to try to win over customers. There claims were just lies to the people and has made me lose faith in Reebok. More companies that lie or stretch the true in there advertisements should be punish how Reebok has been punished. No one should be able to do this.

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  25. I found this to be very funny, that tons of men and women bought these shoes believing that they would work like magic on their legs. Also the fact that Reebok is finally getting called on their marketing scheme and having to pay a settlement is equally funny. This just further shows how we as americans today look for the easy way out. Whether it’s working out with these shoes or steroids, or even taking weight loss pills to help shed the pounds, America is lazy. The fact that Reebok got away with this false advertisement for so long doesn’t surprise me though. They had a couple of high celebrities endorse these shoes and boom they are flying off the shelves. America just needs to take a look in the mirror and quit blaming the marketing world for taking advantage, because they are just trying to make another sale.

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