Business ethics and T shirts

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I’m not going to tell you what I think of this. I want you to tell me what I should think.

As some of you may know, Right Reason has merchandise. There’s a link to our store over on the right. The link is http://www.cafepress.com/rightreason. The store is hosted by Cafepress, who provide a service that enables people to design and sell their own merchandise. I’m going to describe a recent experience that I had with them, and I’d like your feedback on whether or not you believe they conduct themselves ethically in the matter I am describing.

I add a pretty modest mark-up to what I sell. Here’s an example: I’m selling a pretty sweet Right Reason baseball jersey. The base price (what Cafepress charges) is $17.99, and I add $5 to that as profit on each sale (although Cafepress takes a small portion of that too). The total price: $22.99. Check out the snippet from the product editing screen over on the left.

When a user sets their store options, they have the option of excluding their products from the general marketplace at Cafepress. If you select this option, then people won’t stumble on to your products when browsing Cafepress. They would have to come to your store at Cafepress to find them. I figured – Hey, why not just leave my products visible in the general marketplace. More visibility means more sales, and at five bucks a shirt, it may even start to add up, right?

So far everything seemed to make sense. Cafepress told me the base price, I decided the profit level, and I made my stuff available for people to buy either in my store or at the general Cafepress website.

At this point it is worth noting that when Cafepress give you the option of excluding your products from the marketplace, it’s just a checkbox, and there is no mention of price.

Here is the part I want you to think about. Recently I bought one of my own products for somebody (this baseball jersey actually). After buying it, Cafepress sent me a link to this product, suggesting that I share it with my friends. Great idea, maybe somebody else will see it and want to buy one. So I posted the link on Facebook. I wondered, What will my friends see if the click on this link? So I clicked on it. Here is what I saw, in the picture on the right. That’s right folks, just $34.99, reduced from $38! Bargain! Wait a minute, I thought. I’ve added the price incorrectly! I went back to my store to edit the price – No, it was correct: Base price of $17.99, mark-up of $5, total price of $22.99. What was going on here? I emailed Cafepress to find out. I didn’t want people to think I was charging that much. They emailed me back and pointed out that although the product listing – apart from the price – looked like the one I had created, actually it wasn’t the same listing. The higher priced item was in the marketplace, not in my store, and the price was different. What? I thought. The price is different? They decided what to charge for my design? That was news to me. And since the base price that Cafepress charge is $17.99, did this now mean that I would get $17 per shirt that people bought in the marketplace? Actually I had asked them that too. Their reply was to tell me that for sales of my products in the marketplace, I would get 10%. As in, $3.49.

So here is the summary of agreed facts:

  • I created a store at Cafepress where I sell these shirts. Cafepress charge a base price of $17.99, and on top of that I make most of a $5 commission.
  • By default, Cafepress sell my products on their wider website, telling me that I can opt out.
  • When Cafepress sell this product on their wider website, they charge $12 more, and I get about $1.50 less per item.
  • When I bought one of these items from my store, Cafepress provided a link to the product for me to share, in case others want to buy it. The link was to the item outside of my store, where the price is much higher and my take is less. This link is what would have been sent to another buyer. It just happened that on this occasion I was the buyer.

Cafepress have acted legally. That is not in question. The question is: Are they acting ethically? Let’s hear your thoughts.

(For the record, the link they sent me is no longer available, as I have removed my products from the wider marketplace. They can now only be bought from the Right Reason store.)

Glenn Peoples

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{ 9 comments… add one }
  • J L Mackie August 13, 2013, 10:30 pm

    [This comment has been removed due to the blog policy on pseudonyms.]

  • Givemhell August 13, 2013, 10:34 pm

    It seems to me that they could stand to be much more transparent about how they do business.

  • bethyada August 13, 2013, 11:01 pm

    Cafepress have acted legally. That is not in question. The question is: Are they acting ethically?

    No. And good law would also make such dishonesty illegal.

  • Roy August 13, 2013, 11:21 pm

    Definitely unethical.
    1. They did not ask to use your design for profit, as from your perspective you’ve engaged them in a service.
    2. They did not ask you to promote *their* product (based on a stolen design from you).
    3. They did not tell you they would be taking some of your profits.

    disclaimer – maybe they DID tell you but not clearly enough.

    This should be classed as immoral considering it breaks the thou shalt not steal and thou shalt not bear false testimony commandments.

  • Dan August 16, 2013, 4:25 am

    There are three ethical questions here. The first concerns the ethics of what substantive terms business firms may legitimately include in their clickwrap contracts. The second concerns whether they acted wrongly by breaching their contract with you and stealing your designs for their profit. The third concerns them deliberately promoting a misperception in their customers in a manner that might divert potential sales from their customers to their higher profit general marketplace.

    As to the first question, there is a ton of scholarship on the fact that consumers don’t read the terms of clickwrap contracts online. We are conditioned to click “I accept” or “Submit” as soon as we are finished filling in the boxes. In one really good article by Omri Ben-Shahar and Carl E. Schneider, (The Failure of Mandated Disclosure, 159 U. PA. L. REV. 647, 671-72 (2011) ), they relate an anecdote of a software company that for kicks and giggles included in their clickwrap agreement a promise of a $1000 reward to the first person who claimed it. The reward was claimed only after 3000 downloads. Other research suggests that firms know and depend on our propensity not to read our contracts too closely when they set their standard terms. In an ideal world, there’s no problem with firms asking for a hard bargain if customers will be fully rational and responsible by reading and understanding every jot and tittle of the proposed contract and can walk away if they don’t agree. But in light of firms’ knowledge that very few customers will read the standard terms (we rationally choose not to spend hours reviewing standard form terms that we couldn’t change anyway), is there an ethical limit on the types of terms firms may impose? I propose that there are ethical limits (imperfect rights against such terms) but that legal limits are seriously problematic except at the extreme margins.

    The second question depends on what you agreed to in the CafePress clickwrap contract. I’m going to bet that the fine print terms (the boilerplate) (1) give CafePress a license to resell any designs hosted on its site unless the author specifically opts out; and (2) provide for the different terms for the general marketplace sale. So I doubt there is any legal / ethical problem with breach of the contract itself. As a matter of business ethics — contracting issues aside — I’m not sure CafePress is acting unethically. People generally go to CafePress’s general market place, as I understand it, because it’s CafePress, a place where you can buy lots of cool stuff online. They’re generally not going because they want to look at a particular seller’s goods. So why shouldn’t CafePress charge what it wants for products sold on its general marketplace solely because of CafePress’s reputation and marketing efforts? Your own post suggests that you perceived additional benefits from participating in their general marketplace over and above selling solely through your private platform.

    The last area (a third) for an ethical fail addresses the fact that they deliberately set up the website contracting process to make it appear to you that a certain state of affairs would control, they knew that you would hold this mistaken belief unless you reviewed their terms, they knew you would rationally choose not to spend two hours reviewing and seeking legal advice on those terms, and they used this rational ignorance to their advantage by potentially sucking off potential customers into the general marketplace who would otherwise go solely to your private store.

    Best,
    Dan

  • Dan August 16, 2013, 9:43 am

    ” legal limits are seriously problematic except at the extreme margins.”

    I should clarify that I think that including a term in a clickwrap contract giving the service provider a license to profit from your intellectual property is in a grey area of those extreme margins. Really dark, charcoal grey. In fact, it’s probably over the line into unethical territory simply because it looks like something Facebook would do.

    Facebook has a similar term in its terms of service that says it owns whatever you post on Facebook and can sell that intellectual property (usually pictures and incredibly personal information about you) to third parties. In one famous case, a young woman who was a counselor at a Christian summer camp had a friend who posted her photo on Facebook. Facebook sold that photo to a singles dating website, and the website used it to promote their services to lonely singles looking for a date. The young woman was understandably upset. That’s both wrong and creepy.

  • Sven August 17, 2013, 7:41 am

    @Dan: Do you have a link to the facebook-selling-photo incident? I knew about the clause in the FB TOS, but didn’t know they were already selling user generated images.

    thanks,
    Sven

  • Glenn August 17, 2013, 11:06 am

  • Sven August 17, 2013, 10:39 pm

    Hi Glenn,

    thanks for the link — I’d expect a bit more meat on that bone to consider it seriously.

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