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Phonecards

February 17, 1996


Issue 20


Phonecards On-Line is written and distributed by Alan Cohen


News and Views

Classic Fiasco

This article is being reprinted with permission of the author, Kurt Kemmling of KEMCO Enterprises

When does $10.00 = only $6.40?
When you buy a $10.00 MLB Phonecard from Classic, that's when. I bought 2 cases of these cards when they came out, direct from Classic. I just decided to use one of them today, to confirm what an irate customer of mine told me. I called the 800 # on the back of the card, entered my PIN, and was told I have 16 units of time left. That would equate to 62.5 cents per minute. Just to confirm this rate, I called the 800 customer service number on the card, which connected me to Frontier Communication International. I was told they show that I have $6.40 cents on the card, which is 40 cents per minute. I told them the card has a face value of $10.00. She said that only $6.40 of time was assigned to these cards, and there rate was 40 cents per unit, and these cards are 16 unit cards. When I asked her why these cards have a $10 face value, she told me that these cards are marketed as collectibles, and that, "We don't actually expect anyone to use the time on these cards." I told her that this is clearly deceptive, and that I and my customers are upset about it. She told me I should contact Classic and take it up with them.

This is just another example of the direction the phonecard industry is going in this country, down the tubes! I refunded the $10.00 that my customer paid for the card, and will have to eat the loss. I wonder how many more of these cards will come back to me? Not only that, but I sold the card, so the guy is mad at me, NOT Classic! Even though I refunded him his money, and apologized to him, I don't think he will be back. I also know that one unsatisfied customer will tell 100 others about his experience, whereas a satisfied one will only tell about 10. (this is an idiom told me by a business associate of mine, which seems to be true, at least in my experience) It really pisses me off, that I have lost a good customer through no fault of my own. Had I known about this rip-off, I would never have sold these cards. No where on the packaging does it say how many units of time come with the card. I know these cards are not sold primarily for usage, but Classic and Frontier should get the rates straight before they put these cards together.

If you look at the Coke cards from Classic, you can see that the $2 cards are for only 2 minutes. This way you know how much you are paying in advance of purchase. I would hope that anyone buying a card for a buck a minute, is not buying it for usage. This is a card that is clearly marketed as a collectible.

When I figure out what I paid for these cards from Classic, I even paid more than the 40 cent per minute rate quoted!!! Talk about a double rip-off! I will make my feeling known to Classic, and will probably no longer support or carry their products. I still have lots of product from Classic that I must sell. I have a lot of cards in my personal collection from Classic. I am really at odds with myself as to what I should do. I like a lot of the cards Classic put out. Should I sell all of the Classic cards in my collection? This is too bad, as I thought Classic was doing the phonecard industry a favor by getting into the market heavily and helping to expose the public to PC collecting. The only ones Classic was doing a favor for, was themselves. What really irks me is I have no recourse, no one I can go to complain.(that is why you members of this forum get to be my sounding board) Since prepaid cards are not regulated, I am stuck with these cards, and have to sell them to my customers so that I can continue to stay in business. I am not at all happy with this situation, and wonder how the rest of you feel about this. Am I way out of line? Should I just shutup and not hurt the industry that I am a part of? Am I over-reacting, since these are "not really usage cards"? Do you think that Classic is being deceptive by marketing a $6.40 card as a $10.00 card?

The thing I am most upset about is when a card says it is a $10 card, it should have $10 worth of time on it, irregardless of what the per minute rate happens to be, NOT $6.40 worth.

I would not be upset if I called Frontier, and they said that I had 10 bucks worth of time on my card, and the rate was 62.5 cents per minute. At least they would be being honest, as that is what the face value of the card is. There has to be some standard set in this industry, or it will destroy itself, instead of continuing to grow. It is no wonder there is such a small used card market in the U.S. At these rates, how many of us will use the time?

My Take

I agree with Kurt on this, I see this as being a clear cut case of fraud. It really is a bad move on the part of Classic, the least they could have done was work something out with Frontier. I would not be as upset if the phone time was 62.5 cents per minute. A very high rate, but considering the collectibles nature of the card, and the high fees charge by the MLBPA (Major League Baseball Player's Association) it might be justified (Although I did not buy this card) However, when someone calls the number and finds out that there is only $6.40 worth of phone time on there are 40 cents per minute, it makes the dealer look deceptive and untrustworthy.

Although I was really excited when Classic first announced they were getting more involved with phonecards, I could not have been happier. As a card collector, I thought it was the beginning of the crossover from cards to phonecards. The only problem is that Classic has a very bad reputation in the card collecting community, and that now seems to be crossing over to phonecards as well. Classic has been accused of overprinting and dumping their sports cards in the past. Boxes of cards that went for $30 show up a year later for a fraction of the price. Although Classic can not really control the secondary market price of their product, the fact that it reduces so much shows lack of faith on the part of dealers. A box of Assets phonecards in late 1994 was selling for $95, and packs for $5 each. I have recently purchased a box for $30, and packs for $2. Many dealers on CompuServe report having problems selling the Classic phonecards. My new philosophy for Classic products - Wait! If the price goes up, oh well. There are tons of other products on the market. If the prices go down, and I like the product, I will buy (As with the boxes of Classic at $30, I could not pass it up at that price) Kurt has told me that Classic will be responding to him, and that will be printed when it arrives

The Crossover on Hold?

Getting back to the crossover from Sportscards to phonecards, that appears to be effectively dead. Late 1994 seemed to be the beginning of this, and I boldly predicted that most companies would have phonecard inserts by 1996. So far, Classic is the only company producing phonecards. In 1995, Stadium Club Baseball, a Topps product, had a phonecard insert. Upper Deck never included a phonecard in their packs of cards, by they created a set of 15 baseball phonecards with GTS. Classic of course, has stepped up their phonecard production. But Topps never followed the promotion in other lines of products despite claiming a successful program, and Upper Deck never inserted phonecards in packs of cards. One bright spot, Finish Line will be creating packs of phonecards, they will be out soon. Three phonecards in a pack, retail value $6, and $2 minimum phonecards. Although the rate is high (in the 60 to 70 cent range) this product is innovative and I plan on buying a box to see what they are about. This is a racing product though. Will Topps, Fleer, Leaf, Pinnacle, and other companies get back to phonecards? That is an unknown, and for now it appears they are not heading in that direction. We'll have to see what 1996 brings with the Olympics, the elections, and the developing phonecard market in North America. The key, as always, is to actually get people to USE the cards!

The Telecommunications Bill

Although I am strongly against any form of censorship by the government, which includes passing a law that makes sending something obscene over the internet a crime without really defining what obscene is, I am happy about the other part of the Telecommunications Bill. I really look forward to dumping my local cable company, who have a monopoly and have lost touch with what the customer wants. This has a big impact on phonecard collectors. There is no longer a distinction between your local phone company and a long distance company, or even your cable company. Look for phonecards from all entities, and hopefully (and I mean hopefully) at more competitive rates. Until now, phonecards from local phone companies (Pacific Bell, Ameritech) had to be used within the calling region, or those companies had to subcontract a long distance carrier to cover the time (I believe that South Western Bell used LDDS for long distance) That all should no longer be necessary. Since everyone wants your business, look for rates to decline. Additionally, I would expect to see more phonecards being produced, as there will be no regional restrictions any longer (I should be able to use my Pac Bell cards in New York) Finally, it will be interesting to see if Bell Atlantic gets back into the phonecard market. They were quite active, but then terminated their prepaid program due to the restrictions that they felt did not make them competitive under the old telecommunications laws.

Omnitel at a Sportscard Show

The current issue of Sports Collector's Digest (Feb. 23) has a story about the New England Card Show, which was held in January. While most of the article focuses on autographs and how the show went, the article ends with phonecards! Omnitel had a booth at the show, and apparently did very well selling phonecards. It is nice to see a positive article about phonecards in a sportscard publication. There was one part of the article that disturbed me though, one collector states "Some of the phonecards I bought for $5 are no worth over $100 and their prices keep rising." I would like to know what this guy purchased. While I have purchased some phonecards that have gone up in price as well, I hope that investors do not see this and decide to invest in sportscards. Investors (my definition of investor is someone who just wants to make money, they do not care about the collectible, they only care about how much it will make them when they sell) have already damaged the coin and sportscard hobbies. Not that these hobbies are dead, but it can be argued that they are not very healthy.

MCI has new series

MCI just released a series of card commemorating the 150th anniversary of the Smithsonian Institute. "MCI's Smithsonian card series designs were chosen to fit with the "America's Smithsonian" exhibit theme -- "Discovering, Imagining, Remembering." Created to appeal to adults and students alike, the first images introduced from the series are":

Teddy Bear, ca. 1903 -- The Teddy Bear takes its name from President Theodore Roosevelt. On a hunting trip in 1902, Roosevelt refused to shoot a small bear. Inspired by the story, toy makers Rose and Morris Michtom created a stuffed animal and named it "Teddy." The Smithsonian's bear was a gift of Kermit Roosevelt, the President's grandson. (National Museum of American History, Smithsonian Institution; photograph by Eric Long.)

Wright EX "Vin Fiz," 1911 -- The first airplane to make a transcontinental flight across the United States. (National Air and Space Museum, Smithsonian Institution.)

Pocahontas Quilt (detail) -- owned by Pocahontas Virginia Gay, Fluvanna County, Virginia; early 20th Century; 173 x 171 cm, wool, silk and cotton top; gift of Mrs. Edward McGarvey, wife of Pocahontas Gay's grandnephew. (National Museum of American History, Smithsonian Institution.)

"The South Ledges, Appledore" (1913) -- oil on canvas, 87 x 91.6 cm; painted by Childe Hassam (1859 - 1935); gift of John Gellatly. (National Museum of American Art, Smithsonian Institution; photograph by Michael Fischer.)

Images of these cards are available by visiting the Marketplace MCI Web site

Promotions

Ohio Phonecard
Visit the Ohio Business web site at http://www.ohiobiz.com/contest.htm and win one of 200 10 minute cards available. No idea on expiration date, an image of the card is available there or on the web version of Phonecards On- Line

Raley's Market
Raley's Market (In No. Calif) is giving a free $2.00 Pac Bell phone card. You have to buy $25.00 worth of groceries. The phonecard is attached to a small red "Happy Valentines Day" card. The phonecard has Red Roses and says "Call Someone you Love - Compliments of Raleys"
From: Cathy Ashbaugh

Gillette Update
The Gillette cards are here - although I have not seen any. They have been reported found in a variety of Gillette products all over the country, more news and hopefully a photo next week!

Garage Door Opener?
Chamberland" garage door openers is now offering a (Free) 30 min. phone card with the purchase of series # 8100, 5100, 4600, 4100 or 2100 opener. Mail in offer post marked by March 9th,1996. Must send in original coupon, UPC and receipt.
From: Robert Smith

Maxell
Get a free 10 minute Talk N Toss Maxell. The picture on the card is of the famous Maxell poster which shows a guy sitting in a comfortable chair literally getting blown away from the power of the sound coming out of the speaker in front of him. You need this original certificate filled out plus send in the UPC from a 10+2 pack of Maxell XLII-90 cassettes and the original cash register receipt. This offer is good through December of 1996.
From: Bruce Harmon

Cal Ripken Card Become a "Charter Subscriber" to the new Sports Cards Magazine by Krause, receive a Cal Ripken Limited Edition 2131 Classic Phone Card Phone: (800) 258-0929 Dept. ABAL51. This is a $5 Phonecard
From: Yours Truly

Until Next week, Happy Collecting,

Alan

Distribution

Phonecards On-Line is written and distributed by Alan Cohen. It is a weekly newsletter devoted to phonecards - Current news, viewpoints, and reviews of new issues. It is distributed free of charge, and available two ways.

1) On-Line on the World Wide Web. The address is: http://www.pcmreport.com

2) Direct e-mail. Send a message to: phoneline@cardmall.com

If you wish to be removed from this mailing list, or find yourself with two subscriptions (It does happen), please reply to the ORIGINAL message that was sent to you - This will assist me in removing your name