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Court Upholds Federal Ban On Gun Sales To Medical Marijuana Cardholders

A large number of states have legalized marijuana use for medicinal purposes, even as the federal government continues to maintain that pot is as dangerous and addictive as heroin. However, even though you can’t currently be prosecuted by the feds for properly obtaining medical marijuana in a state like Nevada, your status as a confirmed marijuana user could be used to prevent you from buying a gun.

Federal laws regarding firearms sales include a prohibition against selling guns to fugitives, convicts, “mental defectives,” and anyone who is an “unlawful user of or addicted to any controlled substance” as defined by the Controlled Substances Act.

As mentioned above, not only does the DEA consider marijuana a controlled substance, but lists it as a Schedule I controlled substance, meaning the agency considers it to be highly addictive, dangerous, and having no legitimate medical application.

Back in Oct. 2011, a Nevada woman attempted to purchase a gun from a firearms retailer outside of Carson City. The owner of the store knew the customer and knew she had recently obtained a medical marijuana registry card from the state.

Only days earlier, the Bureau of Alcohol, Tobacco and Firearms had sent out a notice to all licensed gun sellers clarifying that medical marijuana use, in the eyes of the federal government, still constitutes an unlawful use and “you may not transfer firearms or ammunition to” these potential customers.

The customer need not even admit to being a marijuana user or card holder. If the retailer is aware that a buyer has a medical marijuana card, explained the ATF, “then you have ‘reasonable cause to believe’ that the person is an unlawful user of a controlled substance.”

So even though the Nevada customer did not note on her paperwork that she had the card, the gun owner refused to complete the transaction because he knew she was a cardholder.

Two weeks later, the woman filed a federal lawsuit alleging that this refusal to sell her a firearm violated her First and Second Amendment rights, along with the Equal Protection and Due Process Clauses of the Fifth Amendment. She subsequently claimed that the ATF notice that clarified the legality of selling firearms to medical marijuana users violated the Administrative Procedure Act by effectively making new rules without going through the necessary processes.

In March 2014, a District Court in Nevada granted [PDF] the government’s motion to dismiss the case, noting that while the Second Amendment does protect American’s right to bear arms, that protection is not unlimited.

Additionally, unlike some of the other categories of those barred from buying guns — convicted felons, people who had been previously committed to a mental institution — the lower court noted that drug users can get around this prohibition by ceasing to take the drugs.

The Nevada woman had also argued that the law was overbroad because it could have the effect of barring a vast number of otherwise innocent citizens from owning guns. Again, the court was unconvinced, explaining that “Whether nearly half of the U.S. population engages in conduct that is illegal under federal law does not affect the illegality of that conduct.”

The customer appealed the lower court’s dismissal and today, the Ninth Circuit Court of Appeals issued its ruling [PDF] upholding the earlier decision.

First, the appeals panel found that the Nevada customer lacked standing to challenge the particular part of the law barring gun sales to “unlawful user[s]” or addicts because she never admitted to being either of those things. In fact, notes the court, she has previously stated that she obtained the card but had never used it to acquire medical marijuana.

However, she is allowed to challenge the portion of the law that prohibits firearm or ammunition sales based on “reasonable cause to believe” that the buyer is a drug user.

The appeals court acknowledged that this law — along with the ATF’s interpretation in the notice it sent to gun sellers about medical marijuana — does indeed restrict the plaintiff’s Second Amendment rights, but that the burden is “not severe” because it limits only her ability to acquire new firearms, not her right to possess any she might already have.

The Ninth Circuit noted that the plaintiff “could have amassed legal firearms before acquiring a registry card,” and the laws she’s challenging “would not impede her right to keep her firearms or to use them to protect herself and her home.”

Additionally, explains the court, she could have purchased firearms “at any time by surrendering her registry card, thereby demonstrating to a firearms dealer that there is no reasonable cause to believe she is an unlawful drug user.”

In an effort to counter the plaintiff’s argument that the rules unfairly burden largely non-violent medical marijuana cardholders, the government pointed to studies indicating a link between violent behavior and the use of illegal drugs.

However, the appeals court chided prosecutors for “conflat[ing] registry cardholders with unlawful drug users. While these two categories of people overlap, they are not identical.” Since the plaintiff only has standing to challenge the “reasonable cause to believe” prohibition, any studies about the behavior of known drug users and addicts is not immediately relevant.

That said, the court found that it was reasonable to see a connection between this particular prohibition and the aim of preventing gun violence.

“The connection between these laws and that aim requires only one additional logical step: individuals who firearms dealers have reasonable cause to believe are illegal drug users are more likely actually to be illegal drug users (who, in turn, are more likely to be involved with violent crimes),” explains the court, which conceded that some small number marijuana cardholders may only have the card for expressive purposes, while also concluding “it is eminently reasonable for federal regulators to assume that a registry cardholder is much more likely to be a marijuana user than an individual who does not hold a registry card.”

Yes, admits the Ninth Circuit, enforcing this prohibition on all cardholders will inevitably result in some people who do not use marijuana being barred from buying guns, but points out that “the Constitution tolerates these modest collateral burdens in various contexts, and does so here as well.”

Regarding the plaintiff’s First Amendment claim, the appeals court agreed that obtaining a medical marijuana card is indeed a form of protected free expression. It, however, took issue with her allegation that the ATF’s 2011 medical marijuana notice was part of an organized federal campaign to stamp out state laws legalizing medicinal use of the drug.

“[A]ll the federal government would have needed to do to ‘crush’ the medical marijuana movement would have been to enforce the federal laws prohibiting marijuana possession,” explains the ruling.

Even if you take the plaintiff’s speculation as true, notes the court, it does not “demonstrate that the Government targeted [the plaintiff’s] expressive conduct of acquiring a registry card.” In other words, the court is saying that the gun law does not stop anyone from getting a marijuana card.

“The production, distribution, and use of medical marijuana are not protected by the First Amendment,” explains the order, “and efforts by the Government to impede – or even eliminate altogether – the production, distribution, and use of medical marijuana are not evidence of any conspiracy against free speech.”

Though the Ninth Circuit has affirmed the dismissal of the plaintiff’s case, she still has the option to petition the Supreme Court, though SCOTUS is not obligated to hear the matter.


by Chris Morran via Consumerist

Aeropostale Receives A Bid That Would Keep At Least 229 Stores Open

Aeropostale, a teen-focused clothing retailer, filed for bankruptcy earlier this year, and since then its continuing existence has been in question. Its business assets are up for auction this week, and the retailer reports that a bid has come in that would keep the doors open and the jeans flowing onto store shelves.

The bidder would be a joint venture between two real estate trusts that are prominent mall owners: Simon Property Group and General Growth Properties. The venture would keep the retail chain in business as a “going concern,” with at least 229 stores and perhaps more surviving the change in ownership.

Sycamore Partners, the lender that Aeropostale accuses of using its control over one of the chain’s suppliers to cut off credit lines and push it into bankruptcy, is eligible to use Aeropostale’s debt against it to bid in the bankruptcy auction. The company fought this in court, but the judge ruled that Sycamore should be allowed to bid, and that Aeropostale has to accept the highest bid.

You may recall that a similar post-bankruptcy deal is why there are still RadioShacks around: lender Standard General bid using RadioShack’s debt as currency over the objections of other creditors, keeping less than half of the chain’s stores open.

If the going-concern deal falls through, the ever-present liquidators Hilco and Gordon Brothers, along with Authentic Brands Group, would buy the inventory and fixtures, holding liquidation sales in the traditional manner.

At the time it filed for bankruptcy, Aeropostale had about 800 stores in North America.

Aeropostale Gets Going Concern Bid to Keep 229 Stores Open [Bloomberg]


by Laura Northrup via Consumerist

Let’s Review: You Will Never Have To Send $6K In iTunes Gift Cards To The IRS

When you owe money to the Internal Revenue Service, they don’t call you up. Instead, they send letters through the mail. Yet people send thousands of dollars every day to scammers in faraway call centers who claim to represent the federal government. If you don’t know that the call is a scam, it can be super scary to be threatened with seven years in prison over the phone.

A woman in Idaho wants everyone to use her story as a cautionary tale, and recounted what happened to TV station KTVB. She received a phone message in a robotic voice telling her that she owed the IRS a large sum of money, and called the number back.

“I should know better,” admitted the victim, a single mother who immigrated to the United States from Japan 14 years ago. “But by the time my head was already frozen, and scared and feared because they threatened about my kids and all that.”

giftcardsThe fake IRS instructed her to withdraw almost $6,000 worth of cash from the bank, then go to a store and purchase iTunes and Toys-R-Us gift cards. She was to read the gift card numbers to them over the phone.

Why gift cards? They’re portable, accessible, and easy to re-sell, but one reason why scammers have shifted to gift cards is that wire transfer companies are on to them.

A few months ago, NPR’s Planet Mone interviewed an employee at MoneyGram whose job it is to explain to scam victims, mid-scam, what is happening to them.

An almost-victim explained that she felt like she was “in a trance” and fearful of the fake IRS, and holding two phones that offered her two different realities.

In summary: the IRS doesn’t leave threatening voice mails, and they don’t want your gift cards. Tell your friends and family. Perhaps soon, stores that sell gift cards will begin flagging people making massive gift card purchases in cash.

Woman loses thousands in IRS scam [KTVB]


by Laura Northrup via Consumerist

CBS Will Let You Watch New Star Trek Show Without Commercials… For $4/Month More

As CBS prepares to put bona fide original content — like the upcoming online-only version of Big Brother and next year’s new Star Trek: Discovery series — on its $6/month All Access streaming service, the network realizes that hey, maybe people will pay a bit more to avoid having to watch all those flippin’ commercials.

The company announced today that All Access users can “upgrade” to the commercial-free tier of the service for $9.99/month, which is $4/month more than the current rate.

All Access is CBS’s answer to Hulu, the streaming venture jointly owned by the parent companies of NBC, ABC, and FOX. That higher-profile streaming service offers a bigger library of shows and movies than All Access, and also produces original content.

Meanwhile, All Access had basically just been a way to either watch Big Brother feeds or spend more NCIS time with on-demand Mark Harmon. The network is hoping that the service’s first real online-only content will bring in new subscribers — who they hope will ante up for ad-free streaming.

That includes Big Brother feedsters. While the live feeds from the BB house are constantly interrupted for “awesome” competitions, not to mention every time an addle-brained houseguest sings a copyrighted song, the network does not break up the monotony with ads.

However, CBS recently confirmed that the new original content on All Access would have up to 12 minutes an hour of advertising. We’ll have to wait to see whether that holds true for all 24 hours of the day for the Big Brother live feeds, or if the service will concentrate those ads during the hours when the hamsters are actually awake in the house.

The big question is whether $6 or $10 a month is worth the investment just for one or two original shows and access to a bunch of old CBS crime procedurals.

[via AVclub.com]


by Chris Morran via Consumerist

Explosion On Truck Carrying Takata Airbags Not Caused By Improper Shipping

On Aug. 22, a truck carrying potentially volatile airbags made by auto parts company Takata exploded, killing one person and injuring four others. Today, federal safety regulators said that the tragic incident could not be blamed on improper shipping.

According to Reuters, an initial investigation by the National Transportation Safety Board indicated the parts being shipped by Takata were properly packaged and stored.

A spokesperson for the NTSB said the agency’s hazardous material team made the determination along with the Federal Motor Carrier Safety Administration following an initial survey of shipping documents.

The NTSB hasn’t ruled out a full-fledged investigation into the issue, however, noting that it will decide in the next few weeks whether a deeper investigation is needed.

The Takata parts truck was hauling airbag parts on Aug. 22 when it exploded, incinerating a nearby home and killing a woman.

The truck, Takata said, was carrying airbag inflators and propellants containing ammonium nitrate — the explosive chemical that the company said in 2015 it would phase out of new production. It was headed from a Takata factory in Mexico to a plant in Eagle Pass, TX and was being driven by a subcontractor.

“Takata immediately deployed personnel to the site and has been working closely with the subcontractor and the appropriate authorities to investigate this incident,” the company said in a statement earlier this week.

The initial NTSB finding comes the same day as Senators Richard Blumenthal, of Connecticut, and Edward Markey, of Massachusetts, called on the NTSB to investigate the Texas explosion.

“We also seek answers on what steps must be taken to ensure other towns and communities aren’t endangered by the shipment of ammonium nitrate on our highways,” they wrote in a letter to the agency.

NTSB checks show Takata shipped properly in Texas blast [Reuters]


by Ashlee Kieler via Consumerist

American Girl Dolls Will Soon Be Available At Toys ‘R’ Us Stores

When I was but a young Consumerist, the only way to get your hands on an American Girl doll — once parents had been successfully harangued into purchasing the pricey toy — was by mail order. Since then, Pleasant Company, now a subsidiary of Mattel, has 20 stores around the country dedicated to selling the dolls as well as a website. Times are changing yet again: starting next month, the dolls will also be available at Toys ‘R’ Us stores.

Not all dolls will be available in the new deal, however: Toys ‘R’ Us will sell American Girls’ new line of $60 WellieWisher dolls (as seen in the above photo) at all of its 870 stores starting next month, reports the Associated Press.

In late October Toys ‘R’ Us will open 700-square-foot American Girl shops inside about 100 of its stores, which will sell the WellieWisher line and American Girl’s signature Truly Me dolls, which come with a $115 price tag. Mattel says it’s planning to work with the retailer to open more American Girl shops within stores in 2017.

Toys “R” Us Global Chief Merchandising Officer Richard Barry said the company is “focused on finding new, exciting ways to bring our stores to life,” the Wall Street Journal reports, pointing out that the new partnership is just in time for the holidays.

Mattel could use the help: last year, American Girl sales fell 8% from the previous year. To that end, Jefferies analyst Trevor Young said in a note to clients reported by the AP that the deal “bodes well” for a turnaround, with sales expected to rise by the end of 2016 or early next year.


by Mary Beth Quirk via Consumerist

Can You Tell Your Exotic Foods From Your Science Fiction Characters?

If someone says “Would you like a strawberry?” you know exactly what they’re talking about. But what if someone asked for your opinion on Dulse: Would you understand that they were referencing an edible form of red algae, or maybe they’re talking about a character from Babylon 5?

If you think you can tell the difference between a Manioc and a Mentat, go ahead and take our quiz. Some foodies and sci-fi fans will ace this easily, but it might prove a little more difficult to those of us for whom Swiss cheese is exotic or who have never referred to anything using the term “expanded universe.”

We couldn’t decide whether to end this lead-in with a quote from Andrew Zimmern or Philip K. Dick, so we’ll just politely suggest that you take the dang quiz already:


by Chris Morran via Consumerist

Kmart Holds ‘Grand Re-Opening’ For Millennial-Focused Illinois Store

What do millennials––a generation loosely defined as “anyone younger than Consumerist’s senior staff”––want from the physical stores that they still visit? Discount chain Kmart hopes to solve that mystery, re-opening an existing store near its headquarters as a “revitalized and refreshed” concept store intended to attract younger shoppers.

Department store chains like Macy’s are investing in experiences like blow-out bars and salons, and grocery chains like Whole Foods, Aldi, and even dollar stores know that young adults like to shop there for low prices on basic items.

What about that new Kmart, though? The store is in Des Plaines, a town between Chicago and the suburban headquarters of Sears in Hofmann Estates, IL. The grand re-opening even had a celebrity guest for no obvious reason: Chicago Bulls legend Scottie Pippen showed up at the ribbon-cutting event.

What does the store actually have to offer the younger customers that it wants to attract, though?

The Des Plaines store is trying new things out, including:

  • A customer service desk rebranded as the “Happy to Help Center,” with a store for kids where they can shop with parents’ points in the Sears Holdings Shop Your Way rewards program.
  • A personal shopping service called Shoparazzi, where customers can give Kmart a shopping list and pick up their purchases later.

    This feature includes the improbable promise that employees will go to another store and pick up any items on your list that Kmart doesn’t carry.

  • A selection of items at low prices, some as cheap as $1, in a section called the “Aisle of WOW!” which sounds a lot like Target’s One Spot.
  • A section with fresh groceries and a selection of candy from local companies.

Will these changes roll out to a Kmart near you? If the Des Plaines experiment works, these could be great new features for a discount store, and especially fun for children. If nothing else, the grand re-opening ceremony reminded local shoppers that Kmart is still there.

Kmart Unveils ‘A Whole Lotta Awesome’ At Des Plaines Store [PR Newswire]
Does Des Plaines’ Kmart reopening offer hope for Sears Holdings? [Daily Herald]


by Laura Northrup via Consumerist

Amazon No Longer Marketing Private Student Loans To Prime Members

Just a month after Amazon announced it would partner with Wells Fargo to offer Prime members a discount on private student loans, nearly all traces of the criticized program have disappeared. 

With the exception of news releases announcing the partnership, there is no sign of the Amazon/Wells Fargo student loan discount option on either company’s websites.

When reached for comment by Consumerist, a rep for Well Fargo would only say that the “promotion for Prime Student members has ended.” The bank declined to explain the reason for ending the program or say whether the offer was supposed to be so short-lived. Amazon has not yet responded to our request for comment on this story.

Previously, Wells Fargo hosted an entire page dedicated to the promotion, touting the ability for eligible college-aged Amazon Prime members to received up to a 0.75% interest rate discount on new loans.

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That page, http://ift.tt/29Rg7cC, now redirects to the bank’s regular private student loan page.

Screen Shot 2016-08-31 at 1.16.25 PM

We’ve reached out to both Wells Fargo and Amazon for information on the current state of the partnership. We’ll update this post when we hear back.

The Institute for College Access & Success (TICAS) applauded the end of the program Wednesday.

“We congratulate Amazon for deciding to stop promoting Wells Fargo’s costly private education loans,” Pauline Abernathy, executive vice president for TICAS, said in a statement. “Private loans are one of the riskiest ways to pay for college, with none of the flexible repayment options and consumer protections that come with federal student loans.”

Under the partnership, announced July 21, Amazon Prime Students were eligible to receiving a 0.50% discount on new loans, as well as an additional 0.25% interest rate discount offered when they enrolled in an automatic monthly loan repayment plan.

The discounts were available only for new student loan applications received on or after July 21, 2016. That means borrowers who had current Wells Fargo student loans are not eligible for the discount.

At the time, the head of Wells Fargo’s Personal Lending Group called the Amazon cross-promotion a “tremendous opportunity to bring together two great brands.”

However, the program was roundly criticized by consumer advocates for touting private loans over more affordable options with better protections.

While saving 0.75% on your student loans might seem like a great deal, many advocates say it really isn’t when you consider most students headed for college are eligible for less costly federal student loans.

Private loans like the one previously touted by Amazon and Wells Fargo don’t offer the flexible repayment and discharge options found in federal student loans.

Other warned that the Wells Fargo/Amazon offer could mislead consumers into thinking they were getting a good deal when they might not be.

For example, federal student loans currently have a fixed interest rate of 3.76%, while private loans can reach as high as 13.74%.

Additionally, the fine print for the program included a notice that Wells Fargo “reserves the right to modify or discontinue interest rate discount program(s) for future loans or to discontinue loan programs at any time without notice.”

screen-shot-2016-07-21-at-12-50-35-pm

That means that while you might receive a discount when taking out the loan, it wasn’t guaranteed to stick.

Financing one’s higher education can be a difficult and information-packed endeavor. And with nearly two-thirds of students who take out student loans unprepared for the financial obligations associated with the debt, advocates advise that they should look at all options available to them.


by Ashlee Kieler via Consumerist

Judge Dismisses Lawsuit’s Claims That Dr. Dre, Jimmy Iovine Cheated Early Beats Partner

After Beats Electronics and Music scored $3 billion when it became part of Apple, not everyone was happy. A former partner of Beats executives Dr. Dre and Jimmy Iovine, for one, who sued the pair in 2015, claiming they’d swindled him out of money that should’ve been his. A judge has now dismissed key claims in the former partner’s lawsuit.

Los Angeles County Superior Court Judge William Fahey issued a summary judgment that ties up the main part of the double-crossing case, the Los Angeles Times reports.

Noel Lee, founder of video and audio cable maker Monster, was an early partner of Beats co-founders Dr. Dre and Iovine, holding a 5% stake in Beats as part of a partnership between his company and the headphone makers. He alleged in the lawsuit that his former pals worked out a “sham deal” with HTC in 2011 that effectively ended Monster’s alliance with the company, and Lee’s stake in Beats was cut to 1.25%.

He eventually sold off the rest for $5.5 million in late 2013, claiming in his lawsuit that Beats executives assured him that the company wouldn’t be sold in the immediate future — but then in May 2014, Beats announced that Apple was buying it for $3 billion.

His former 1.25% stake could’ve reaped more than $30 million, Lee’s suit claimed, and his original 5% would’ve netted about $150 million.

Judge Fahey found, however, that Beats’ actions were allowed under the contracts that Lee and Monster had entered into as sophisticated investors. He also dismissed Monster’s claims alleging misconduct by HTC America and a Beats investor and board member.

The case was scheduled to go to trial next week, but will now be limited to Beats’ efforts to force Monster to pay its attorney fees and other costs.

Apple declined to comment on the ruling, and Monster attorney did not respond to the LAT’s requests for comment.

Beats wins in case that accused Dr. Dre and Jimmy Iovine of double-crossing investor [Los Angeles Times]


by Mary Beth Quirk via Consumerist

Rejoice! You Can Now Zoom In On Instagram Photos, Videos

How many times have you looked at an Instagram photo on your smartphone and instinctively tapped the picture to get a closer look at the details captured, only to be reminded that the photo sharing site doesn’t support zoom? Countless. Well, that’s about to change, finally. 

After five years of making users squint and hold their smartphones within inches of their faces to decipher what’s in the background of pictures, Instagram announced it will add a zoom function to its set of tools.

Instagram shared a video on its — what else? — Instagram account unveiling the new feature, noting iOS users can start zooming in today, while Android users will have to wait a few weeks.

Instagram Photo

“Starting today, you can pinch to zoom on photos and videos in feed, on profiles and on Explore,” the announcement states.

While the social network doesn’t say exactly how long it’s been working on the feature or why it wasn’t included in the original platform, Instagram says the tool is just the latest innovation it plans to add to the service.

“And as things change, we’re still focused on improving the core parts of Instagram,” the company says.

Of course, adding the functionality comes with one drawback: pinching photos, videos, and profile photos puts us all at risk for inadvertently liking things we shouldn’t be looking at.

[via Mashable]


by Ashlee Kieler via Consumerist

Samsung Delays Galaxy Note 7 Shipments After Reports Of Explosions, Fires

Following Korean news reports of the batteries in some new Samsung Galaxy Note 7 phones catching fire or exploding, Samsung says it is delaying shipments of the device pending additional quality control testing.

“Shipments of the Galaxy Note 7 are being delayed due to additional tests being conducted for product quality,” the company tells Reuters, with a similar statement going to the Wall Street Journal.

South Korean news agency Yonhap was among the first to report that Samsung had halted its shipment of the Note 7 to wireless providers in the company’s home country. That report says there are at least five claims thus far of the device exploding while being charged.

A quick search of the U.S. SaferProducts.gov database didn’t turn up any stateside complaints about the Note 7, but does show that a number of Samsung customer have previously complained about their previous model Galaxy phones allegedly catching fire or smoking while plugged in for charging.

What Samsung has not made clear in its statements regarding the Note 7 is how the delays will impact the global rollout of the product. The Note 7 is set to release in Europe this week, and reportedly in China next month. A company official declined to tell the Journal which specific markets were affected by the halt in shipping.


by Chris Morran via Consumerist

Transatlantic United Airlines Flight Diverted After 12 Injured During Severe Turbulence

A United Airlines flight from Houston bound for London was diverted to Shannon Airport in Ireland, after extremely bumpy skies injured 12 onboard.

Airport officials and the airline at first said 14 passengers and two members of the flight crew were hospitalized for injuries sustained during the flight — including cuts, bruises, and minor head injuries— but University Hospital Limerick later confirmed that 10 passengers and two crew members were admitted, and 11 people discharged so far.

“All have since been discharged, except for one of our flight attendants,” United said in a statement.

Flight 880 was diverted due to a “medical situation,” a Shannon Airport spokesman told NBC News, resulting from “severe and unexpected turbulence.”

One passenger told the news station that things were flying “all over the cabin and kitchen area.”

“One attendant [cracked] the side of her head and was bleeding,” he said. “My shoulders are really really hurting from grabbing onto the armrest during those altitude declines.”

Another passenger told The Telegraph that there was a “sudden huge drop.”

“People who didn’t have their belts on flew out of their seats, all the TVs and the lights went off and people were screaming,” she said. “Some people were walking around and it was mainly them who were injured, but we were all terrified. For a moment I thought I was going to die.”

This is the second report of extremely bumpy skies this month: earlier in August, 24 JetBlue passengers were injured during severe turbulence on a flight from Boston to Sacramento.


by Mary Beth Quirk via Consumerist

Amazon May Or May Not Be Trying To Overtake UPS And FedEx

When you see a UPS or FedEx truck in your neighborhood on a weekday, or a U.S. Postal Service truck on a Sunday, they’re probably there with some kind of delivery from an online retailer, and that retailer is likely to be Amazon. As more of our everyday shopping happens online, someone will need to bring those items to our doorsteps, but it may not necessarily be the carriers we’re used to.

Amazon is taking over more of its own delivery functions. Is the retail giant trying to put its partners out of business? No, Amazon representatives say, as it adds cities and drivers to its Flex package delivery service.

In a Bloomberg Businessweek cover story this week, though, we learned about the big picture of Amazon’s delivery projects in the context of its global ambitions and future projects.

In a public interview at this year’s Code Conference put on by Recode, tech journalist Walt Mossberg asked Amazon founder and CEO Jeff Bezos about the growth of white Amazon vans in some metropolitan areas, and specifically about whether Amazon wants to replace existing delivery services.

“We will take all the capacity that the U.S. Postal Service can give us and that UPS can give us and we still need to supplement it,” Bezos explained.

Yet in the United Kingdom, Amazon now delivers about half of its packages itself, insisting that the Royal Mail doesn’t have the capacity to handle all of the packages that Amazon customers are ordering up. Royal Mail representatives dispute this, but Amazon went ahead and created a delivery network in that country anyway.

Its home country is bigger and sprawls more, though, and here Amazon used the exact opposite tactic, paying the U.S. Postal Service to make Sunday deliveries and carry more of its packages from a final distribution point to customers’ homes.

When discussing Amazon, its delivery partners, and their future together, Christmas 2013 is a key date: while the carriers appeared to be unprepared for an onslaught of packages, carriers’ complaint was that Amazon dumped more deliveries than expected on them at distribution centers, leading to a backlog that disappointed gift recipients and

Will Amazon Kill FedEx? [Bloomberg Businessweek]


by Laura Northrup via Consumerist

Dropbox Breach Affected Logins For 68 Million Accounts

Last week, Dropbox asked longtime users to update their login credentials after learning that their information may have been compromised nearly four years earlier. At the time, the file-sharing site didn’t say just how many users were affected by this breach, but a new report shows that more than 68 million accounts were involved.

Motherboard reported Tuesday that it was recently able to obtain a selection of files containing 68.6 million email addresses and passwords for Dropbox accounts.

An employee with Dropbox confirmed to Motherboard that the data it received was legitimate and tied to the previously disclosed breach.

Motherboard reports that the hacked passwords would have been nearly impossible to decipher. Nearly 32 million of the compromised credentials include passwords secured with a strong hashing function bcrypt, while the remaining passwords include a random string — called a “salt” — added to the password process to strengthen them.

Patrick Heim, head of Trust and Security at Dropbox, maintained that no accounts were improperly accessed following the 2012 breach and that the password change prompt issued last week covered nearly all of the affected users.

“Even if these passwords are cracked, the password reset means they can’t be used to access Dropbox accounts,” Heim said in a statement. “While Dropbox accounts are protected, affected users who may have reused their password on other sites should take steps to protect themselves on those sites.”

Heim goes on to suggest users enable two-step verification and make strong, unique passwords for their accounts.

Hackers Stole Account Details for Over 60 Million Dropbox Users [Motherboard]


by Ashlee Kieler via Consumerist

When Is A Cooler Too Cool? When People Keep Stealing Them

When you think of designer goods that are prime targets for thieves, you might think of stuff like handbags, jewelry, and clothing, perhaps. But coolers? Really?

Yes, really, there is one specific brand of cooler popular among the outdoorsy set that keeps getting stolen, reports the Wall Street Journal: it’s made by Yeti, a company that has a super popular line of luxury outdoor gear. The coolers are especially prized, with prices starting at $250 for the smaller models and up to $1,300 for a version that can hold two tuna or three dressed elk.

The coolers are designed to endure the rigors of nature, like say, a bear chomping on it. To that end, Yeti coolers earned a seal of approval from the Interagency Grizzly Bear Committee, an organization dedicated to preserving grizzly habitats.

This popularity has driven the coolers to popularity not only among campers, but among thieves who have been swiping them from campers, stores, beaches, and boats all around the country, the WSJ notes.

Here’s just a taste of recently reported Yeti cooler crimes:

• Police in Mobile, AL are dealing with a suspected gang of Yeti Bandits who have been targeting store in coastal Alabama and Mississippi, stealing thousands of dollars worth of merchandise.

• Yeti thieves in Cadiz, KY made friends with their victims one night at a local eatery, then tracked the men back to their lodge and stole nine Yeti coolers worth about $2,500 from pickups and boats, the local county sheriff’s deputy said.

• Police arrested two women in Paducah, KY in July accused of stealing $500 worth of soft-sided Yeti coolers from a grocery store — with the help of two toddlers they sat on top of the loot to hide it in their shopping cart.

It’s obvious why the coolers have become a target.

“They’re expensive, man,” one man currently in jail after being accused of stealing Yetis for about a week. “I get good money for them.”

The authorities agree.

“When you have $400 coolers,” one police detective sergeant told the WSJ, “people are going to start stealing them.”

Yeti Coolers Are Hot! No Really, People Are Stealing Them. [Wall Street Journal]


by Mary Beth Quirk via Consumerist

Study: The “Better” Walmarts Are In Higher-Income, Whiter Areas

All Walmarts are, bluntly, not created equal. Some have better customer service than others and are just plain more pleasant shopping experiences. And if you’ve felt like the Walmarts in richer ZIP codes are more likely to be the nicer ones, well, one study says you’re right.

A study published this year took a look at Walmart customer satisfaction by analyzing the 35,000 total Yelp reviews for all Walmarts nationwide. And the trend the researcher found is… disquieting.

The reviews covered a total of 2.840 stores. Among them, the study found, reviews for stores in areas with a lower average income were significantly worse than reviews for stores in areas with higher incomes.

And worse: even controlling for average area income, the higher the percentage of black or Latino residents in a certain ZIP code, the worse a Walmart there would rate.

The researcher running the study didn’t just look at the numerical ratings stores got; he also looked at the words reviewers were using to describe them. Stores in areas with predominantly black residents tended to be “negative,” “nasty,” “terrible,” “unorganized,” and, mainly, “worst.” Stores in areas with mostly white residents tended to be “friendly,” “typical,” “clean,” and even “pleasant” or “amazing.”

Now, it seems incredibly unlikely that anyone at Walmart is actually sitting around twirling their handlebar moustache and trying to figure out how to make life miserable for low-income or minority customers on purpose. Still, the trend in the data is there — so what’s going on?

The researcher who conducted the study points to chronic understaffing and poor working conditions as probably causing the poorer service. In a series of interviews, he and his student-assistants talked to 89 Walmart workers around the country. Employees across the board reported a lack of support, but it seemed “particularly acute,” he writes, for employees working in low-income communities of color.

And all of that — Walmart’s ability to cut corners and generally suck while still drawing in customers — is tied to competition, the researcher suggests, or specifically, the lack of it.

Walmart is able to compete so aggressively on price that it drives other retailers out of an area and establish a local monopoly, the researcher suggests. It’s called a “monopsony”:

“Instead of raising prices and lowering product quality and quantity to increase profits, profits are increased by lowering wages and staffing levels, worker effort, and employee retention. All companies trade-off lower turnover and effort for lower wages; Walmart is distinct for the extent to which it has chosen a strategy in which low-wage workers do not stay very long, do not invest much effort, but are paid such low wages that Walmart is still making a profit.”

Walmart, of course, thinks the study is bunk. In a statement to Business Insider, a spokesperson for Walmart called it “flawed and without merit.”

“Our customer traffic and overall customer satisfaction scores have been improving and we’re focused on continuing to do better,” the representative told BI, tacitly acknowledging that the company has some pretty serious customer satisfaction problems overall.

The statement continued: “Our associates play a critical role in the company’s success and that’s why we’ve invested $2.7 billion on associate education, training and wages. We’re also proud to provide communities across the country, regardless of social or economic background, access to affordable goods and career opportunities to help them better provide for their families.”

And, as BI points out, the study itself may be flawed: using Yelp alone, though it generated a fairly high sample of reviews, can’t account for other biases or outside influences. The Yelp-using population may not be representative of the broader population, or it may be predisposed to perceive any store in a ZIP code mainly populated by people of color as low-quality, regardless of the reality.

On the other hand, the Yelp reviewers aren’t the first to notice a significant absence of staff at Walmart stores, either: staff cutbacks have led to increased crime across the board at Walmart locations.

walmart’s consumer redlining [Contexts]
A study reveals a disturbing trend about Walmart locations across the US [Business Insider]


by Kate Cox via Consumerist

We’re Spending More At Restaurants, But Not Because We’re Dining Out More

In 2015, the average household spent around $3,008 to go to restaurants and have someone else do the cooking and dishwashing for once. That’s a slight uptick over the previous year, but spending more money at restaurants doesn’t necessarily mean we’re eating out more frequently.

Instead, Burger Business reports that the 7.9% spending increase seen in 2015 is likely tied to higher menu prices, not more frequent visits.

According to data from the Bureau of Labor Statistics, households dedicated 5.37% of their income to dining out last year compared to spending 5.21% of funds in 2014.

On the flip side, consumers are still spending plenty to eat at home, just not as much as typically seen in the past.

In 2015, income dedicated to at-home food declined to 7.17%, compared with 7.42% in 2014.

Analysts believe that while we all might like a night out or a quick bite from a local fast food or fine dining establishment every once in a while, consumers aren’t exactly heading to those restaurants all of the time.

Instead, NPD Group suggests that food-away-from-home spending increased in 2015 largely based on menu-price inflation, as visits to restaurants stayed relatively flat.

Burger Business reports that both quick service restaurants — think McDonald’s and Burger King — as well as fast casual establishments — like Chipotle — saw no change in customer visits for the second quarter of 2016, while the first quarter only saw a 1% increase in patron visits.

Restaurants saw the largest decline in visits around the lunch hour, while breakfast saw a subtle 1% increase.

“Contributing to the stalled visit growth are consumers’ uncertainties about current and future economic conditions,” Bonnie Riggs, NPD Group restaurant industry analyst, tells Burger Business. “These uncertainties have put a damper on overall consumer spending. Compounding the situation for the restaurant industry is the decline in food at home inflation while at the same time restaurant operators have been increasing menu prices.”

Food-Away Spending Up; Visits Flat [Burger Business]


by Ashlee Kieler via Consumerist

Uber Driver Accused Of Robbing, Assaulting Disabled Woman

It seems every week we’re reporting on ride-share drivers accused of mistreating the passengers they’re hired to take from point A to B, and this week is no different: an Uber driver in Massachusetts has been accused of stealing from an elderly disabled woman and assaulting her in the process.

Prosecutors say a 21-year-old man went to an elderly woman’s house to pick her up on Monday night in Malden, reports CBS Boston, though she hadn’t hailed him through the Uber app. Instead, she told police, she’d called him directly because he’d given her rides before.

He said he had to use the bathroom, and went inside her home. When he came out, he allegedly said to her, “Sorry, I’m going to have to take this,” snatching her handbag and a bag of medicine, WHDH.com reports.

The bag contained several hundred dollars and credit cards, she said. When she tried stop him, police said he assaulted her by shoving her. He was arrested on Tuesday and arraigned on charges of assault and battery on a person over 60 years old and larceny over $250. He’s also been ordered to stay away from the victim and is barred from driving for hire in the state.

We’ve reached out to Uber for comment and will update this story when we hear back.

In just the month of August, we’ve had reports of a Uber drivers accused of raping passengers in Atlanta and in a Boston suburb, and a Los Angeles driver accused of sexually assaulting female passenger after he’d dropped her at her destination.

Uber Driver Accused Of Stealing From Disabled Woman [CBS Boston]
Uber driver accused of robbing and assaulting passenger in Malden [WHDH.com]


by Mary Beth Quirk via Consumerist

Fox & Hound, Champps Locations Closing After Owner Files For Bankruptcy

If you were planning on watching upcoming NCAA or NFL games at a Fox & Hound or Champps sport bar, you should call first. Dozens of locations for the bar/restaurant chains are shuttering only weeks after their parent company filed for bankruptcy protection. 
When it filed for bankruptcy in early August , the now-ironically named Last Call Guarantor LLC operated 48 Fox & Hound locations and 23 Champps bars, along with 9 Bailey’s restaurants.

Now, a company rep tells Nation’s Restaurant News that Last Call has shuttered a total of 25 locations, leaving 37 Fox & Hounds, 14 Champps, while Bailey’s only has 4 remaining eateries.

Closed locations include those in Chattanooga, New Orleans, and New Jersey

The restaurant closures came after Last Call received $5.4 million in financing from Kelly Investment Group — a private equity firm that specializes in restructuring — to keep the company in operation until a planned auction next month.

Last Call said in a bankruptcy filing that without the financing, it would “not be able to continue their business operations beyond August 30,” NRN reports.

In addition to providing needed financing, Kelly Investment Group acquired the rights to $75 million in first lien debt that Last Call had owed to Antares Capital.

Antares has pushed the bankruptcy court to convert Last Call’s filing to Chapter 7, which would have resulted in the closure of all operations.

This is the second time Last Call has filed for bankruptcy since 2013. At that time, the company filed for federal debt protection with $117 million in debts, blaming its issues on failed financial decisions.

Fox & Hound, Champps close 25 units [Nation’s Restaurant News]


by Ashlee Kieler via Consumerist

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