HELLO PEOPLE! I am your friend. Why the heck doesn't anyone tell me about these things when they happen. I still paid $40 for my router, AFTER the MIR (which took nearly 14 weeks to get here and I thought I'd never receive it,nor did I expect to).

http://moneycentral.msn.com/content/Savinganddebt/Finddealsonline/P140372.asp?GT1=7623

The Basics
When that online deal becomes a steal

Online shoppers can sniff out retailers’ mistakes and exploit them within minutes -- snapping up free goods, rebates and gift cards without a twinge of regret.

By Melinda Fulmer

For some online shoppers, the line between a bargain and a steal is getting ever more blurry.

The explosion of deal sites and shopping chat rooms on the Web has allowed shoppers to spread the word to thousands of fellow bargain-hunters when they discover a glitch or loophole that delivers free or heavily discounted merchandise.

“Any mistake (shoppers) can find on a Web site, they will exploit,” said Sucharita Mulpuru, an e-commerce analyst with Forrester Research in New York.

Take the coupon mistake shoppers found this past holiday season at Amazon.com: A coupon code posted to several bargain Web sites gave shoppers a $25 discount on every item in their carts, not just the routers and other Netgear brand products it was intended for. The discount, which was only supposed to be used once per customer and only on a $100 Netgear purchase, wound up giving scads of shoppers hundreds of dollars in discounts on digital cameras, camcorders and even sonic toothbrushes.

One shopper who goes by the name of Creasemonkey on the bargain site FatWallet.com wound up with two Calphalon saucepans and a Netgear Ethernet switch for $2 after rebate. And coupons are just one area ripe for abuse. Some shoppers exploit retailers’ gift-card policies, using gift cards online and then running out to a brick-and-mortar store to use them again the same day, before the system catches up to the first purchase.

Blink and you’ll miss them
Those cashing in on these types of deals say it’s like snapping up a mistagged product in the store. But industry analysts say it’s a whole new ballgame now, because shoppers can snap up thousands of dollars in free merchandise at all hours of the day and night with no one to recognize them. And unlike buying in a brick-and-mortar store, online shoppers can have multiple identities, with multiple e-mail addresses and credit cards.

“There’s a tremendous amount of technology out there, and people know how to use it,” said Gary Heck, a Chicago-area technology and marketing consultant who works with retailers on these issues. Indeed, Heck said, while the rest of us scour the Net and our mailbox for coupon codes, many resellers figure out a retailer’s algorithms for generating coupon codes and spit out hundreds for their own purchases, or to sell on sites like Craigslist and eBay.

Ironically, it is the biggest retailers who are the most vulnerable and feel more pressure to uphold these questionable deals. Most are hesitant to discuss the online scams perpetrated by their shoppers, either because they are afraid of giving people ideas or because they are embarrassed by how easily they can be ripped off. Moreover, analysts say, they are afraid if they rein in some of the deals, they will alienate their free-spending customers.

Nevertheless, Mulpuru said, the upshot of these online tricks is less lucrative coupons and bargains for all customers. “The offers aren’t as rich as they used to be.”

The devil in the details
Amazon.com declined to discuss the Netgear deal, other than to say that it cancels orders once it catches those kinds of mistakes. Indeed, on the Netgear promotion, the retailer began canceling new orders a day after the mistake was discovered. But often, analysts say, shoppers can accumulate hundreds or thousands in free merchandise shipped before a retailer discovers the problem. Kansas City, Mo.-based Hallmark Cards, for example, was ripped off last November when it sent out $10 off coupons for any $10 purchase from its floral delivery service. When shoppers found out it could be used anywhere on the site, they charged hundreds of dollars in $10 fancy soap sets, gourmet candy tins and other gifts for which they were never charged a penny.

One shopper bragged about his coup, scoring $700 worth of merchandise for only $16 in shipping. Another customer who took advantage of the deal said it was Hallmark’s fault because it “applied the coupon incorrectly.”

Hallmark confirmed the incident but declined to talk further about it.

Some of the biggest targets for these kinds of scams are electronics retailers, because of the hypercompetitive nature of that business. Some shoppers will buy a high-ticket item online, where it is cheaper, and then return it to their local store to make money. “They will get more in store credit than what they paid,” Mulpuru said.

Others will take advantage of a store’s price-matching policies by making up phony ads to get the store to pay them 110% of the difference. Minnesota-based Best Buy has classified these unprofitable rogue shoppers as “devil customers” and estimates they make up about a fifth of its entire customer base. The company said it is working to tighten its return policies and “close loopholes,” which have allowed some customers to get away with so much.

For example, the company has changed some of its rebate systems, so that customers can’t return a product for full price if they have gotten a rebate. “There were some transactions going on that we wanted to avoid,” said Best Buy spokesman Jay Musolf. And, to make up for some of these costly shenanigans, the company is working even harder to court its “angels,” or customers who spend the most and drive the company’s profitability. It has also begun tightening its return policy, charging a restocking fee for some expensive items.

Illegal or unethical?
Still, judging from the numbers of shoppers bragging about their exploits on sites such as FatWallet.com and SlickDeals, these procedures aren’t stopping some shoppers from cashing in.

One, known by the handle Kensat30 on FatWallet.com, shared his advice for getting free gift cards from Best Buy. He buys products online that come with free $10 and $20 gift cards, then he selects in-store pickup and never retrieves the item. The order is canceled, but he keeps the gift card when it comes in the mail. He has no illusions about the financial impact of his actions. “2000 Fat Wallets x $10 gift cards = ouch,” he says on one of that Web site’s forums.

Analysts say many of these scammers have a bad case of “stick-it-to-the-man-itis,” after having a bad customer service experience at a store. Others simply have a sense of entitlement, said Mulpuru, believing they should be able to get products for next to nothing if a retailer is lax enough to allow it. The feeling among these shoppers is, catch me if you can, since many of these practices aren’t necessarily illegal, just unethical. No government watchdog agency appears to be looking into these deceptive transactions. Retailers are simply working to combat them on their own.

Retailers fight back
One of the most common tactics, Mulpuru says, is registering multiple times under multiple e-mail addresses to get first-time customer discounts such as free shipping or 20% off. “That is a huge opportunity to scam.” Indeed, many customers register hundreds of sub-e-mail addresses from their main account to get loads of these discounts, and then sell the codes on Ebay for $5 to $10 apiece.

People who want a discount on a Dell laptop and can’t find a coupon on their own can simply turn to eBay and purchase one of these coupons, which were generated in amounts far greater than the computer maker intended. The Round Rock, Texas-based retailer said it expects some sharing of coupon codes. However, the company does investigate and take “corrective action” if it finds abuse, said Dell spokeswoman Jennifer Davis.

Massachusetts-based Staples, Heck said, has begun making its coupons specific to a customer or specific region, so they can’t be disseminated as widely. However, some online shopping maneuvers don’t involve coupons or discounts at all, just methods to put other customers at a disadvantage when it comes to finding discounts.

Computer language “scripts” employed by some hackers can pull the best deals from an online site within seconds of their addition. The script puts items in a shopper’s cart and checks out automatically. That means some tech-savvy buyers are able to get first crack at systems for under $400 from Dell’s online outlet -- deals most people would never see.

An online technological race
While Dell outlet tricks are a popular topic on FatWallet.com's forums, FatWallet.com President Tim Storm says they are closely monitored by Dell employees as well. Storm won’t take responsibility for the retailers’ problems or take down any post that isn’t illegal. “We didn’t create the bad situation,” he says of his site, which posted 1.7 million users in December. “We just amplified it."

Still, he said, moderators have on occasion pulled a topic or “thread’ from one of its forums that crossed the line. Last year, under pressure from a trade group, the site pulled a thread that told shoppers how to translate the SKU numbers on a coupon, which often allowed reimbursement on a greater range of products than the coupons language specified. “We talked about where that line (for cheating) was and decided codes were not a promise to the consumer, the words (on the coupon were),” he said.

Still other retailers just shrug off these incidents as the unavoidable cost of doing business. Photo-developing Web site Shutterfly.com, for example, doesn’t blink when customers try to stack five different coupons to get 120 free 4x6 prints, worth more than $22.

“Oh, I thought you were going to say they were getting 1,000 prints,” said spokeswoman Bridgette Thomas “That’s really not a problem.” Especially, she said, if it makes customers come back again.

And while the scams are more sophisticated these days, analysts say they are nowhere near as widespread as they were eight to 10 years ago when retailers were first learning the ropes of selling on the Web. The average transaction cost per online order has gone down from $30 to about $7, Mulpuru said, partly because of tighter site security and lower marketing costs. Retailers now have more people than ever combing their sites and purchases for errors and canceling orders before companies feel the full impact of any mistake. They also are “blacklisting” or blocking orders from certain e-mail addresses that have been shown to be problems in the past.

But for the legions of young, underemployed tech-savvy shoppers out there, that technique isn’t much of an obstacle, Heck said. The same customers who can write code can create hundreds of e-mail addresses and generate dozens of credit card numbers. “What you are looking at is a technology race retailers are having with (some) customers.”