How Expedia is fooling itself, its customers, and the FTC that its spam isn't spam. But it is

In response to my concern that the travel site Expedia is spamming its customers (of which I'm one) in violation of the Can Spam Act as well as in disrespectful defiance of its customers' elections not to receive solicitations for special travel deals, Expedia has finally responded with an explanation that, if you ask me, reminds me of how pathological liars end up believing their own lies. In my opinion, Expedia is spamming its customers and has simply convinced itself that the way in which it goes about doing so magically converts the company's unsolicited commercial e-mail (a.k.a. spam of the sort the Can Spam Act doesn't allow) into transactional e-mail that is exempt from the Can Spam Act.

If you missed my earlier posts on this issue, let me catch you up. Recently, I received an e-mail that told me my $200 coupon with Expedia was about to expire. What coupon that was and how I became entitled to it, I had no idea. My first post regarding this e-mail notification simply had to do with my opinion that the e-mail was incredibly misleading. At first, you're led to believe that that the $200 coupon can be applied to any travel. You're even provided with links to four destinations as "inspiration" for ways in which to apply the coupon. It isn't until later in the email, after you carefully study all the text, that the coupon turns out to only be good for those four destinations and that it only applies to trips that are five days or longer in length. Given the language and the open ended search form near the top of the e-mail into which any travel destination can be entered and searched, I found the e-mail to be incredibly misleading. In fact, I considered it to be a bait and switch.

Then, in response to that piece, a reader asked the obvious question that, until then, had completely escaped me. What gave Expedia the right to send me that promotional e-mail in the first place? The reader, who himself felt he was being spammed by Expedia, suggested the same had just happened to me. The reader suggested that I double check the e-mail preferences in my Expedia account. Sure enough, I had opted out of every possible promotional e-mail Expedia could have to offer. Yet, somehow, not only did I get this promotional e-mail from Expedia, there was no way to opt-out from future ones like it (as required by the Can Spam Act). So what the heck is going on here. How is Expedia able to get away with it?

Well, now I have the answer from Expedia itself and, sadly, its so terribly insufficient that I am imploring FTC to act and Expedia to immediately cease a very questionable business practice. In that last post, I picked up on a clue that was contained in the fine print of Expedia's e-mail. According that:

You are receiving this transactional email based on a recent purchase or account-related update on Expedia.com. You will receive this type of notification to communicate important information regarding purchases or updates to your Expedia.com account.

As it turns out, transactional e-mails are considered by the Can Spam Act to be a different class of commercial e-mail that's exempt from the law.  As I said in my last post: By including this statement in its e-mail, Expedia appears to be saying that this is a different class of e-mail than your typical "deal, special offer, or information about my trips" (all of which I had opted out of). A quick Google search turned this bit of text up on a Federal Trade Commission Web page:

A "transactional or relationship message" – email that facilitates an agreed-upon transaction or updates a customer in an existing business relationship – may not contain false or misleading routing information, but otherwise is exempt from most provisions of the CAN-SPAM Act.

So, now were down to the crux of the issue. Why does Expedia feel justified in describing this special offer  -- one that is essentially a $200 discount for a five day (or longer) trip to one of four destinations -- as a transactional e-mail? How, in the FTC's own language, did Expedia's e-mail "facilitate an agreed upon transaction or update a customer in an existing business relationship." 

According to Sylvana at Expedia whose title is Customer Service Lead and to whom Expedia's public relations department referred me, here's how. On July 8, 2006, I booked a rental car in San Francisco through Expedia. It was actually my first transaction with Expedia since 2004. So, I'm not a regular customer by any stretch of the imagination. Furthermore, Sylvana confided that when the Expedia site is used to do nothing but book a rental car, it doesn't even take a cut out of the transaction. It's simply a pass-thru. Nevertheless, as a result of using Expedia's site to book something before December 31, 2006, I qualified for the incredibly limited $200 coupon.

According to Sylvana, this qualification was not conditional upon my acceptance. Whether Expedia customers wanted them or not, the $200 coupons are automatically issued and deposited into qualifying customers' accounts. Looking at the email confirmation for that car rental (an email which I still have), while Expedia makes other offers (eg: It says "Save on hotels in San Francisco"), there is no mention whatsoever of the coupon I qualified for. Nor was the existence of a coupon in my account mentioned in a subsequent confirmation email for an intinerary that I booked after Sept 27 (for example, there was no reminder that said "Reminder: You have a $200 coupon in your account. Click here to learn how to redeem it).

While its essentially a moot point, there's also some other confusion swirling around my particular qualification for this coupon. Knowing that I booked nothing but a rental car -- a booking for which, as described earlier, Expedia simply passes the data through to the car rental company -- Sylvana said that normally, an entire travel package has to be booked. While I had investigated and searched a potential full travel itinerary at the same time, the only thing I booked was a rental car for $235.17. The second question she couldn't answer had to do with when the coupon was issued. According to her, the coupon is supposed to be issued within 30 days of the booking. However, my coupon was issued to my account on Sept 27, nearly three months after the rental car was booked.

But, as I said it was moot. As of Sept 27th, whether I wanted it there or not, I now had very limited $200 travel coupon in my account that, in its own mind, Expedia was treating as a part of my transaction involving the car rental. Therefore, in Expedia's mind, the e-mail that essentially promoted a special offer on a five day or longer getaway to one of four specific destinations was an extension of my car rental transaction. This is why Expedia has convinced itself that the unsolicted commercial e-mail that's connected to the coupon is transactional in nature and therefore, exempt from the Can Spam Legislation.

It's a trick. Expedia has manipulated its information systems and business processes in a way that extends the life of a transaction so that the travel site can spam its customers with special travel deals and offers even though its customers may have opted out from such offers. To me, it's the equivalent of rigging your car (perhaps by using bigger wheels) so that the speedometer makes it look like you're going slower than you actually are (bigger wheels = less revolutions of the axle per mile = slower speed indication) and then using that as the reason that a cop shouldn't give you a ticket for speeding. It's dirty sneaky pool and should the practice become routine for other Web sites who maintain customer accounts into which coupons can arbitrarily be dropped, the Can Spam legislation would become more ineffective than it has already been accused of being. 

For starters, Expedia has now lost me as a customer. Hello Orbitz, or some other site. Secondly, the practice must stop and the FTC must act.  Do you agree? Vote now:

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