Card Mills: Give ’em Shelter?
Supreme Court Justice Potter Stewart in Jacobellis v. Ohio famously stated that pornography was hard to define but that “I know it when I see it.” Likewise, I think I know a card mill when I see one. It is not in the least bit surprising that these companies now indicate their business methodologies are legitimate based on the fact that there is no generally accepted definition of “travel agent”.
This column has argued on more than one occasion that the lack of an industry standard definition would ensure that card mills and MLMs would continue to adapt to changes in the public relations and legal environments in order to survive.
So what is a card mill? Card mills are business entities that derive some portion of their revenue stream from recruiting people to be “travel agents” by promising discounted travel. The pitch is that since travel agents get to see the world for free or at highly discounted rates, the smart thing to do is to become a travel agent. Moreover, since no definition of “travel agent” exists, anyone can pay to become one. Upon convincing a consumer to part with an under-$500 investment (the $500 limit keeps these companies from being subject to more strict regulatory scrutiny), they wave a wand and deem the consumer a “travel agent.” An additional compensation is typically offered to recruit others to the program.
In recent months, in order to create a veneer of respectability, these companies have in some instances dropped the issuance of cards, introduced non-obligatory travel agent training programs (for a fee), or clamped down on the most egregious examples of their affiliates’ marketing efforts. Like viruses, these companies continue to evolve to the lowest common denominator that will permit them to operate under the radar of consumer protection agencies.
In reality, these companies are travel clubs. But by calling their members “travel agents” they hold out the promise of a business opportunity with exciting benefits. It is wrong, it is cynical, and bottom line, it is bad for business. Why? Firstly, because it is not honest. While some discounted travel does indeed exist in the form of FAM trips or as a result of netting out commission, the availability of FAM trips is certainly not what many of these companies represent. Further, as nebulous as the definition may sometimes appear, it is pretty certain that real travel agents book travel for third parties, not primarily for themselves. Take the gross travel boasted by any of these companies, divide it by the number of agents they have, and it is pretty obvious that most of the travel being booked through the card mill agencies is for the personal travel of the pseudo agents.
So signing on with a card mill does not make one a travel agent and certainly does not guarantee discounted travel. But each time a consumer hears this message they are told otherwise. The “anybody can be a travel agent” message denigrates the professionalism and the hard work of the traditional travel agent community. A quick estimation is that over 500,000 people carry pseudo-agent identification. That is a sizeable chunk of the population removed from the market for traditional travel agents by the false representations and promises of a few companies, representing far more than a billion dollars in travel. At the geometric rate that the card mill companies and their recruits are popping up, this number is certain to grow unless steps are taken to arrest the deceit being perpetrated on the public.
Who are these companies? Try this experiment. Google the phrases “travel like a travel agent” and “savings on your own travel”. Then, look at the websites of the companies returned as results. Use your own judgment and decide if any given company is basically telling consumers they can travel the world on the cheap by paying a small fee. If so, it’s a card mill in the humble opinion of this editorial. Spend time on their sites and see if you feel their representations to the public are honest.
And one other thing – see if any of the organizations to which you belong, or the media you read, are giving card mills shelter – a cloak of respectability. If in your research you find one of your industry organizations or media giving these companies shelter, ask your leadership “why?” There may be a perfectly good reason why a company you think is a card mill also has a membership with one of the organizations to which you belong or why a travel club is elevated to the position of “travel agency” on a “power list” in a media’s list of the top travel agencies in the country. But ask about it – you have a right to answers – you have a right to know if your leadership is properly protecting the interests of the traditional travel agent. Your associations, consortia, host agencies, and the industry media have decided who they will promote and do business with, and who they will provide with their approval as “travel agents.” You are not out of line to ask for an explanation when such actions run counter to your own best interests.
TRO is not exempt from criticism. If you feel that in any way we ever deviate from our mission to enhance the professional life of traditional travel agents, make us explain ourselves.
One final point that puts TRO at odds with other patriots in this fight: it is not the responsibility of suppliers to monitor your ranks. Travel agents need to set the standards and decide who is and who is not a travel agent, not suppliers. Suppliers have one concern – selling their products. This is your industry and your fight. Take it on.
ASTA, IATAN and TRO are sponsoring a webinar on March 25th. You can register here.
The webinar will give a brief history of the card mill phenomenon. It is not intended to be a fair fight. No card mill representatives will be given a spot to explain their position. However, traditional travel agents will be provided with the tools they need to effectively battle the card mills at the local, grassroots level. The next time one of your clients tells you they are thinking about paying $495 to become a travel agent, you will have a website to send them to where industry experts, state consumer agencies, judges and consumer advocates will explain the fallacy of these business opportunities. You will be provided with press releases to use in your local communities and a PowerPoint presentation to show at speaking opportunities.
It is time for the traditional travel agency community to protect their turf in a logical and rational way. Too much of the conversation up to this point has been wrong-headed and unprofessional. It is time to be much more calculating. Card mills recruit on the basis of emotion and greed – they depend on an emotional buy from consumers. If you slow their sales cycle, their success rate will fall dramatically. Present consumers with logic, with facts, and with evidence, and they will better understand that $500 and a website does not make a travel agent.
Flush them out. No shelter. It’s your industry and it’s time to take it back.