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Marketing by Text? Ask Customers Permission First|
ST. LOUIS, (SLFP.com), December 29, 2013 - Many restaurants and other businesses have found success in using mobile technology to promote their latest deals, specials or discounts.
But if you plan on using an automated service to connect with a large number of customers at once, make sure you get your customers' permission in writing before you text or call. Otherwise, you could face hefty fines - or worse, put your restaurant on the receiving end of a class-action lawsuit - under new Federal Communications Commission rules.
The FCC rules, effective Oct. 16 under the Telephone Consumer Protection Act, require restaurants and other businesses that send text messages or make phone calls through automated means to obtain "prior express written consent" on paper or electronically from the customers who will be receiving the communications. Previously, businesses just needed to meet the looser standard of obtaining "prior express content" from recipients.
Under the new rules it isn't enough to simply ask customers to sign up for a mailing list or to offer them an option to opt out of receiving messages, said Wilson Barmeyer, an attorney with Sutherland in Washington, DC . You'll have to make it very clear to customers how their cell numbers will be used.
"Prior express written consent is a very specific standard for what kind of consent you need before you can do any mass text," Barmeyer said. "The customer's permission has to be in writing, and signed. They must give their cell number. They can't be required to consent as a condition of purchase, and the customer has to expressly consent to be called or texted using an automatic caller or dialer."
The potential liability for failing to get express prior written consent can be severe, ranging from $500 to $1,500 per message. The numbers add up quickly, and the potential profits from pursuing violators have caught the eye of plaintiffs' attorneys. Barmeyer notes that there have been many lawsuits over the years about auto-texting or auto-dialing without consent, but that these cases could escalate now that the rules for getting consent just got stricter.
The rules only apply to texts sent via automated means, said Lewis Wiener, also an attorney with Sutherland. "It's when you're using auto-dialing (without a live person making the calls), predictive dialing (a form of automated dialing that connects agents to answered calls), a blast text, a blast phone marketing campaign," he said. "If you have someone actually dialing the numbers, that's a safe harbor."
This isn't to say that restaurants shouldn't use text messages for promotion. But operators need to plan carefully to avoid potential risks. Keep these tips in mind if you plan on marketing via text:
Don't work from a list you collected before Oct. 16, 2013, when the rules went into effect. The regulations require explicit consent, not implied consent. You couldn't claim that a customer consented to be contacted simply because they supplied their number, Barmeyer said. However, he added, mobile technology industry groups have asked the Federal Communications Commission to clarify whether consents obtained before Oct. 16, 2013, are still valid. The FCC has not decided yet
Consider incorporating consent into the sign-up process for a loyalty or customer-reward program. "Some restaurants have loyalty programs," Wiener said. "When you ask somebody to sign up, you can say 'By providing us your cell number, you consent to allow us to contact you. Check here if you want to opt out.'"
You can get consent online, but not by phone. It's impossible to get written consent over the phone, but you could potentially incorporate it into your online ordering system via electronic signature, Barmeyer said.
Interest in Mobile Payment Methods Continues to Grow
ST. LOUIS, (SLFP.com), December 29, 2013 - Interest in mobile payment methods among customers and businesses continues to grow.
According to National Restaurant Association (NRA) research, restaurant guests are showing strong interest in utilizing a mobile payment system. A third of all adults and more than half of 18- to 34-year-olds say that they would use mobile or wireless devices to pay restaurant tabs at full-service restaurants if given the option, and more than half of full- and limited-service restaurants planned to increase spending on smartphone apps and other mobile technology in 2013.
Payment is only one part of the mobile commerce picture, which has the potential to drastically change the way restaurants interact with their customers. But even with the growing business and consumer interest in mobile commerce, significant hurdles remain before the payments component of mobile becomes a viable, efficient, and sustainable reality.
The U.S. payments system, which is dominated by the Visa and MasterCard brands has not seen significant innovation since the 1970s and is long overdue. Mobile commerce provides a tremendous marketplace opportunity for innovation to be realized as long as legacy payments systems don't create barriers to new market entrants.
The Federal Reserve recently published a paper on the future of the payment system, "Payment System Improvements," in an effort to identify key gaps and opportunities in the current system. The Federal Reserve offered possible objectives aimed at improving privacy and security and the value of payments, and diversifying consumer and business choice. The National Restaurant Association submitted comments on the paper as part of its work to ensure that the transition to emerging payments, including mobile commerce, leads to a more competitive, innovative and efficient payment landscape.
"The U.S. is lagging behind the rest of the industrialized world in data security and payments system innovation," said Liz Garner, NRA director, commerce and entrepreneurship. "The old system is not cost efficient, it's not secure, and we've seen very little innovation in the last 40 years because the system is basically a duopoly. We're encouraged by the role the Federal Reserve can play as a facilitator as we move the payment system into the next century."
The NRA said will stay engaged with the Federal Reserve and other stakeholders as discussions of mobile commerce progress. "Restaurants absolutely need a seat at the table when the future of payments, and particularly mobile commerce, is being discussed," Garner said. "Restaurants and other retailers are the ultimate point of interaction with the customer who wants to use their phone in one of our establishments. It would be short-sighted to leave us out of the process as new systems are developed."
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