PayPal: Where $1 Cash Back For Every $20 Spent Is Less Than 5%

Since last July, the value of PayPal stock has fallen by about 75%. While many analysts are discussing the company's "fundamentals" and suggesting at what price to purchase the stock, I'm staying away for a different reason -- because they often produce Mail That Fails. 

My first post about PayPal's several Fails was in 2011 when they mailed me a shoddy credit offer. There are a few more, including a recent one about a confusing and poorly targeted Venmo offer. Now, add to my list of PayPal Fails this offer of "$1 cash back for every $20 spent at restaurants." 

PayPal Cash Card Restaurant Rebate Offer
Received May 9, 2022

Scanning the headline might make you think that going out to lunch four times -- spending $25 each time with your GooglePay app to use your PayPal balance for those lunches -- would earn you $5 cash back ($100 divided by $20 equals $5). But you'd be wrong…twice. The offer requires me to first request a PayPal Cash Card, then receive it in the mail and use it at a restaurant. All within 5 weeks of first receiving the offer – some of which is spent waiting for PayPal to process my request for the card. That's a lot of effort and a short window of opportunity for a small benefit, e.g. a Fail for Offer. 

PayPal could have easily avoided this by using a rolling offer expiration date. For example, PayPal could require the customer to request the card by a specific date, but then give the customer a reasonable amount of time to use the card after activation, say, 60 days. That would be clear to explain and fair to the customer -- unless, of course, the intent is to make imply the offer is more generous then it actually is.

Which leads me to the actual offer value. I read through the disclosure text a few times, and I'm pretty sure that cash back offer is on a per-transaction basis. So, while each purchase of $25 would be worth $1 cash back and a $100 dinner might net $5 cash back, four lunches adding up to $100 would be worth only $4 cash back. If I'm right, this is a Fail for Offer and Content for being misleading. If I'm wrong, it is a Fail for Content for lack of clarity.

Another Fail for Content lies in the disclosures. It appears this disclosure was rushed and not proofread. Take this paragraph, for example:

"Eligible Purchase(s)": Eligible Purchase is defined as every $20.00 USD spent in-store or onlineusing the Card and finalized by the merchant during the Offer Period (defined below) in thefollowing category: restaurants (according to the Merchant Category Code (“MCC”) assigned byeach merchant, their processor, and the credit card networks. Only acceptable MCCs for this offerare 5812 and 5814). PayPal is not responsible for assignment of MCC codes. As a result, Reward willnot be awarded if the MCC code assigned to a particular merchant does not fall within a restaurantcategory, even if you believe that the merchant is a restaurant. Eligible Purchases do not include:(1) purchases that are marked as “pending” in your Card account as of the end of the Offer Period,(2) purchases made at eligible merchants using a third-party delivery service (3) ATM transactions,(4) gift card purchases, (5) any purchase or portion of a purchase that involves a payment methodother than the Card, or (6) in-store cash withdrawals/cash back. 

Spaces are missing between words. The punctuation is inconsistent. Some numbers in parentheses have spaces before them; some do not. There’s also a missing comma after "service" in the last sentence. 

There are references to "e-mail" in some paragraphs and "email" in other paragraphs. According to grammarly.com, both are correct as long as you use it consistently. PayPal is not being consistent.

These types of possibly misleading offers and unclear communications suggest to me that PayPal's leadership is spending their marketing dollars without full consideration of what they are doing and how they are doing it. As a stockholder, that would frighten me. As a customer, that also scares me a bit. If I can't expect to get a clean offer and clear communication, should I really be trusting PayPal to keep my personal information secure?

Lessons:

1. Clearly communicate your offer.
2. Allow your customers adequate time to respond to your offer and benefit from it's value.
3. Proofread your entire communication, including your disclosures.
4. Your customers' trust is potentially built or destroyed by every communication.
5. The debate between "e-mail" and "email" isn't over, but at least pick a side.

PayPal: Venmo $10 Giveaway Email Lacks Explanation or Focused Targeting

This recent email from PayPal trying to cross-sell Venmo merits Fails for Creative and Targeting.

Enrollment offer email, sent to long-term
Venmo customer

The email offers me a straight cash bribe (or, as we say in marketing, an incentive) to sign up for Venmo. The Call to Action is to click on the “Claim Your $10” link that will bring me to the below landing page.

Landing page
lacks explanation of Venmo product features or customer benefits

The landing page reinforces the incentive and discloses information about fees -- and allows me to sign up for Venmo and verify my phone number.

But what is Venmo? Neither the email nor landing page include a product explanation. Simply put: If someone hasn’t used Venmo -- which is, after all, the kind of person the email is targeting -- they would have no idea what it is or why they should provide their mobile number to get $10. Both the email and landing page should include benefit statements or at least some brief sales messages.

Now, in fact, I know all about Venmo. I’ve been using it for a long time, long enough for Venmo’s parent PayPal to know that I am an active customer. That is why I give this a Fail for Targeting. There is no value in sending a new customer acquisition offer to a long-term active customer like myself. Communications like this can make customers question the strength of a brand.

Speaking of brand, why doesn’t PayPal put its name behind Venmo -- at least on this marketing email? For customers who haven’t heard of or used Venmo (like the ones targeted by the offer), including phrasing such as “backed by PayPal” or “a PayPal service” would at least lend some credibility to the product.

This isn’t the first time PayPal has offered me an incentive for something without explanation. Last year, PayPal sent me an offer for Honey that lacked a product value proposition. Nor is this the first time that PayPal has demeaned its brand with shoddy marketing communications. These communications can implicitly send a message to customers that PayPal doesn’t have its act together, which could lead to decreased trust and decreased use. Is this a company to trust with cryptocurrency purchases?

Sometimes marketing managers are so obsessed with their products, they forget the basics. That’s why they need to take a step back, review lessons like the below, and avoid sending Mail That Fails.

Lessons:

1. Explain what it is you are selling and why it is beneficial.
2. Extend your new customer offer only to potential new customers.
3. If selling an affiliate service, consider explaining the relationship with the affiliate.

PayPal: Selling Honey Without the Other Ingredient

A couple weeks ago I wrote about an email from PayPal selling Honey without communicating a value proposition. Over the weekend, I received this email:

PayPal explains Honey in one sentence, "Install Honey in just two clicks so when you shop online you can automatically get some of the best prices from over 30,000 online retailers." That is a well-worded product value proposition. 

Where the prior email encouraged immediacy but lacked a value proposition, this email includes a value proposition does did not encourage immediacy in the call to action. As I draft this post, the $5 bonus offer appears to still be active. Perhaps they have not reached the limit of 40,000 new customers eligible for the offer they mentioned in their first email.

Here's an idea: Combine the value proposition and encourage immediacy in a single communication by explaining the product then closing with a $5 bonus offer. The email could be summed up in a few sentences:

"Install Honey in just two clicks so when you shop online you can automatically get some of the best prices from over 30,000 online retailers. Hurry -- the first 40,000 people to install Honey and make a purchase of $10 or more will receive a $5 bonus."

Will you get that $5 bonus in addition to shopping online with Honey? I don't know, but you should make sure your email isn't a Fail. Act now!

Lesson:

Communicating a value proposition is important, but so is giving the customer a reason to take action now.

PayPal: Selling Honey Requires a Key Ingredient

   This recent email from PayPal merits a couple Fails for Creative. 

 

The email includes a Subject Line of "Get a $5 bonus for shopping smart with Honey." The headline reads "Give Honey a try. Spend $10, Get $5." Below that is a gif of a small box parachuting into a celebration, followed by a message reading, "When you add Honey to your browser for the first time, create an account, and spend $10 or more with PayPal, you'll get a $5 bonus. That's just the start of the savings. Honey members save over $126 annually." Below that are step-by-step instructions about how to install and use Honey, and a disclosure.

There is a clear Call to Action and an incentive for the customer to take action now. The email was sent on September 25 with an offer expiration date of October 4, so immediacy is encouraged. 

But, what is Honey? Why would I add it to my browser? How do honey members save money, and compared to what? None of these questions are addressed in the email.

Based only on the email, one might guess that Honey is a rebate program or online savings account. In actuality, though, it is an online coupon provider. According to their home page, "Honey helps you find some of the best coupon codes on 30,000+ sites." That is Honey's value proposition, and it is missing from this email.

The other Fail is less important, but worth mentioning.  According to the disclosure and the detailed Terms & Conditions found on Honey's site, only 40,000 customers are eligible for the award. Once that limit is reached -- even if before offer the expiration date -- the reward will no longer be available. This type of restriction is fairly common in direct-to-consumer marketing. I've included number-of-customer limitations in several campaigns to ensure the product is not oversold or to cap potential incentive liability. When I did, I would use this clause to my advantage by communicating it in the body of the email. PayPal could do this by including above the Call to Action a message along the lines of...

Be one of the 40,000 people to get your $5 bonus by October 4th. Bonus must be used by October 31st.* 

or ... 

This exclusive bonus offer is limited to the first 40,000 people to take action by October 4th. Bonus must be used by October 31st.* 

This type of messaging approach not only makes the in-house lawyers happy by clearly communicating an offer restriction; it also communicates scarcity, which is a known factor to drive immediate action and increase response -- and that makes your manager happy.

Lessons:

1. It is not enough to have a call to action and encourage immediacy in your direct-to-consumer emails. They should always include a value proposition.
   
   
2. If your offer is limited to a specific number of customers, do not bury that restriction -- use it to your sales advantage.

PayPal: Still Shoddy After All These Years

Four years ago, I received a shoddy-looking letter from PayPal informing me that I had been preapproved for a PayPal credit account. I wrote about it in a previous blog post, expressing concerns about overall effectiveness and dilution of PayPal’s brand equity.

Still Hard to scan + Still Hard to read
+ Still Hard to understand = Still Hard to believe

Last month, I received a similar mailing with a similar style -- blind outer envelope, full-justified copy, black-and-white printing that appears to have been printed on a faded mimeograph, and nearly the exact same copy. Even the first mention of the word “on-line” is hyphenated while the second mention of “on line” in the same paragraph is two words.

The only significant differences appear to be the brand name change from Bill Me Later to PayPal Credit and that PayPal VP Carolyn Groobey no longer associates herself with this solicitation. The signatory is an impersonal “PayPal Credit.”

I find it interesting that PayPal Credit has continually optimized their online tools -- including engaging responsive design and making many of their tools mobile friendly -- yet they continue to use the same shoddy, cheap direct mail solicitation. The quant in me would like to presume that PayPal has run extensive A/B tests and learned that this approach is the most effective. But the right side of my brain is yelling, “How can this cheap creative that looks like a bureaucratic form letter with typos and everything be effective? And how can PayPal allow its brand to be cheapened for so many years! How?!? Why?” 

Is there a lesson here? Perhaps this letter isn’t a Fail for Creative. Maybe the appearance of a poorly created form letter is optimally effective for reaching a credit-worthy (but credit-needy) target market. If so, this is my lesson learned. Or perhaps this is a low-end marketing program that falls under the radar at PayPal headquarters and the lesson is to review your creative content, keep it relevant, don’t let it look lousy, and test it from time to time.

Perhaps the lesson is that, even in the mobile age and at the most tech-forward of companies, there remains a use for direct mail marketing.

PayPal: Great for payments, Fail for mail

Blind envelopes sometimes offset lack of known brand to improve open rate

I recently received a letter in a blind outer envelope. The only hint of the mailer is the postage indicia from "LFS, Inc." The inside of the letter describes my opportunity to pay for some purchases over time with Bill Me Later® because I am a "Continental" customer. 

This letter has several Fails for Creative:

• Copy is full-justified, making it difficult to read.
• All copy is the same font size, including the 9-line disclosure. The only use of boldface is for required legal copy. This makes the letter impossible for a customer to scan.
• The entire letter is one color, with a logo that appears to be produced on a dot matrix printer.
• The call to action is difficult to comprehend. Is it to request an account as mentioned in the first paragraph, place an order with a merchant as mentioned in the third paragraph, or go to their website?
• The word "on-line" is hyphenated. While this is grammatically acceptable, it isn’t a stylistically common usage in consumer communications, potentially distracting readers.
• The offer is good through "December 05, 202011." A date before the 10th of a month should not have a zero in it, and "202011" is not a real year. Proofread your materials!
• Every mention of Bill Me Later® includes a registered trademark in superscript. Legally, the registered trademark is required only in a company's first mention in body copy. Also, superscripted text interrupts eye flow and should generally be avoided.
• Some of the copy is pedestrian. For example, in the third paragraph the customer is asked to place an order for "an amount not exceeding your pre-approved amount." Huh?
• The letter has a signatory but no signature. This further suggests that it is an impersonal form letter and the company is not caring of the customer.

Hard to scan + Hard to read + Hard to understand = Hard to believe

On the whole, a letter like this will fail to inspire consumer confidence or interest in Bill Me Later. It is a challenge to believe that something is "convenient and safe!" when the sales letter is poorly written and has errors.  Even letters from the federal government look better than this.

PayPal could improve a one-page solicitation letter in many ways, including:

• Adding color to the package.
• Positively branding the envelope as from PayPal, a trusted brand, with the PayPal logo.
• Using balanced and varied typeface sizes.
• Adding a Johnson Box.
• Including subheads before paragraphs.
• Italicizing relevant URLs.
• Not going into detail about why I was preselected, or at least being correct about the company name.
• Using full dollar amounts and avoid decimals, e.g. "$5,000" rather than "$5,000.00".
• Including a signature with the signatory.
• Proofreading lettershop samples and verifying data field formats.

Lesson: There is so much wrong with this solo letter package that the lesson here is simple. Don't waste a valuable brand to send poor mail like PayPal did.