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[16 comments]

General Mills requires coupon users to give up right to sue

April 18, 2014

General Mills must have some pretty valuable digital coupons. In its newly updated privacy and legal policy, the Cheerios manufacturer requires individuals who want to download offers to agree not to sue the company. The same rules apply for any person going on any General Mills-owned website or for participants in sweepstakes or contests created by the company.

Those who want the coupons agree to go through an arbitration process should they have a problem with the company's products. By engaging in arbitration, the company avoids dealing with costly class action lawsuits, minimizing monetary damages and public relations issues (case related documents are not made public) even in cases when it loses.

General Mills has had some costly legal run-ins of late. The company settled a class action suit for $8.5 million last year after it was accused of making false claims about the health benefits associated with its Yoplait Yo-Plus Yogurt. In 2012, it agreed to remove a picture of strawberries from its Strawberry Fruit Roll-Ups packaging after it was discovered the product didn't contain the fruit as an ingredient.

Last month, a judge ruled against General Mills when the company sought to have a suit, accusing the company of false advertising, dismissed. In this most recent case, General Mills is accused of labeling its Nature Valley products as "100% Natural" when they contain genetically modified organisms and processed ingredients.

The New York Times, which initially broke the story, pointed out that by signing the agreement, even parents of children with peanut allergies would be unable to sue the company if a packaging mistake was made and their kids ate a food that contained trace amounts.

FINANCIALS:     [NYSE:GIS]

Discussion Questions:

Will General Mills' new legal policy affect consumers' perceptions of the company and its business? Do you expect this type of policy to become commonplace with other CPG companies?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Do you approve or disapprove of General Mills' new legal policy?

Comments:

If they wanted to avoid public relations issues, this was probably not the way to do it. It would be interesting to see if the disclaimer stands up in court.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

Really? I have mostly thought of General Mills as a fine, upstanding company, and very buttoned up when I visited their offices on numerous occasions. But this just doesn't seem to be the right thing to do. They must know that 99% of us never read these legal and privacy policy updates (or there wouldn't be time left to do anything else). So, it pretty much says to the consumer, "Hey, we're General Mills and you're not!" Which, IMO, is not a great thing to do in this age of ubiquitous social media.

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Al McClain, CEO, Founder, RetailWire.com

 
11

I know this isn't PC...but is America becoming an increasingly sad, fearful and angry place? Now you can't even enjoy Cheerios without it being a litigious experience; so much for the "cheer" part. "Cheerios" for goodness sakes! In education, politics, public safety, environment, industry, etc. etc. we seem to be driven by anger, fear, ego, greed, or whatever other bullet we can shoot into our own foot.

There are such possibilities in this country and we are wasting them through our own foolishness. If we would ever align all our energies and focus them on our highest possibilities we'd be unassailable.

Happy Easter all.

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Ian Percy, President, The Ian Percy Corporation

General Mills, like most companies, is trying to limit its legal and therefore financial exposure. Whether or not their latest move achieves that goal is yet to be seen. Unless it fails immediate challenge in the courts, I expect that other companies' lawyers are pouring through the General Mills legal language and devising ways to copy it. Trial lawyers are probably doing the same, looking for ways to challenge and/or pierce this shield.

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Max Goldberg, President, Max Goldberg & Associates

All right, first, I have to say that it is worth reading The Atlantic article's comments, which actually start out debating the legal merits in a somewhat informative and non-rancorous way, and devolve into arguments about whether loving mothers feed their children Cheerios or not.

Whether it is enforceable or not (and that seems to be the subject of a lot of the debate - that it may actually BE enforceable), what a public relations nightmare. People (like me) who have Nature Valley granola bars in my pantry and yet were completely oblivious to class action lawsuits about whether they are advertising falsely by using the word "natural" when the product contains GMO ingredients, are now hyper-aware that General Mills cares more about keeping their lawyers happy than caring about their customers.

Again, legal arguments aside, I think companies need to watch how much of a PR fiasco this turns out to be before deciding whether to follow in General Mills' footsteps. This gets right to the heart of customer engagement - is the company I do business with genuine and interested in taking care of me? Or are they in it for themselves? That was why Unilever ended up downplaying their fantastic campaign for Dove Real Beauty, in the face of Axe, their other brand, effectively standing on the street corner and shouting lewd comments and making lewd gestures as the Real Beauty girls walked by. Being true to Axe's brand image completely undermined everything the Dove brand was trying to accomplish and it was just too hypocritical to last.

Saying that you care about your customers' health (as a food company should), but then running into all kinds of trouble with "healthy" claims that you apparently (allegedly) shouldn't be making, smacks of the same hypocrisy as Axe vs. Dove, and with the amplification that social media provides, I just don't think it's going to stand very long in this day and age.

Today it's lawyers - 1, consumers - 0. But those pesky consumers may yet get their revenge.

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Nikki Baird, Managing Partner, RSR Research

Part of the problem is that digital and print coupons are increasingly seen as the same thing, in the eyes of customers. Younger consumers who are not newspaper readers are less likely to be "coupon clippers" and more likely to respond to online or mobile offers as time goes by. In that context, how does General Mills differentiate legally between a print coupon user with a product liability claim, and somebody using a digital coupon? Either way, I agree with my fellow panelists that this is not a well-considered PR policy, outside of the legal firewall that the attorneys are trying to create.

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Dick Seesel, Principal, Retailing In Focus LLC

This is almost too bizarre to understand. I can imagine the management meeting at General Mills...the chair of the meeting opens with the following statement, "How can we continue to lie to our customers without getting sued?"

Obviously, telling the truth is not an alternative.

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Gene Detroyer, Professor, Independent

First of all, let's add a few facts. Customers have the right to "opt out" of the new policy, essentially preserving their right to sue. It isn't easy to find, but it's possible.

Now, the company has been lambasted in the press for attempting to put itself above the law. How could this be good for "consumers' perceptions of the company and its business."?

I think other companies would love to adopt this policy (who wouldn't want to make it hard to sue them?), but I think the blowback would just be too much.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

The consumer sits squarely at the intersection of a company's brand image (how it wishes the consumer to perceive and value it) and its legal policies (designed to protect its intellectual property and reduce future business risks). When those two are in conflict, something will suffer. It takes years to create and nurture the brand image, but it can be quickly devalued through actions (and inaction to specific events). While General Mills must believe this latest update to its privacy and legal policy is a necessary step to protect the company, it may not have been properly vetted inside the company.

Will other CPG companies follow suit? This will be a wait-and-see approach for any consumer backlash (already vocal). Companies have to seriously consider what they are asking consumers to give up when they reach out and ask them to engage with the brand (like us on Facebook) or take a few cents off a box of cereal or get recipes from Betty Crocker website. This is "buyer beware" on steroids.

Late last year, General Mills was sued by Minneapolis residents over pollutants (TCE) in the soil, so maybe the company's legal team has new marching orders to get aggressive on limiting class action suits. I wonder how this latest announcement will go down in the land of 10,000 lakes?! (Here are some early reactions.)

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

General Mills has clearly blown it here - and I can imagine easily how the corporate bureaucracy of lawyers could cause things to end up this way.

YET... I think we also have to admit that there are very serious problems in the market with issues like these.

Seeking out issues and suing companies as a result is now big business. While the perception is generally an Erin Brockovich righteousness, companies have to fear organized profiteers at every corner who make their living extorting companies on issues like the word "natural" on a box. Really? Did the person who buy it truly believe it was natural or was it an opportunity for a group to attack General Mills?

What concerns me is that the consumer marketplace has become a place where the tiny minority exercise tyrannical control over corporations.

So General Mills blew it, but that doesn't mean there isn't an important problem buried here.

Solutions? I confess I don't have them. Just the sense that we need to find them. Let's just hope this bobble by General Mills doesn't hurt efforts to bring back some sanity on these issues.

Doug Garnett, Founder & CEO, Atomic Direct

This move makes me think that you should be more scrutinizing of General Mills' products before buying them. I doubt that is the result they were going for.

'RetailRetell'

All of a sudden GM decides to "bullet proof" itself. I wonder why they don't realize the bad press this can create. But wait, they are now "bullet proof."

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

General Mills clearly did not consider the backlash in the media. Look at the reaction on RetailWire, plus the bad image of GM in the consumer press. It's a black eye for an otherwise smart marketer.

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John Karolefski, Editor in Chief, CPGmatters.com

So, General Mills is so frustrated with the folks who mastermind class action lawsuits that it has decided to propagate a public message of distrust toward some of its most engaged individual consumers - the ones that "like" it on social media or download and redeem electronic offers.

The asymmetry of the new bargain - "click us once and forfeit some of your legal rights for life" - is breathtaking.

No wonder the PR blowback has been swift and negative. General Mills is a smart and powerful company. It must have predicted this response, so this decision deserves the withering scrutiny it is receiving.

Class action lawsuits are certainly a nuisance for big CPG companies. They are frequently unsatisfying for the consumers they are purported to help too. An"award" of a $25 voucher toward a future purchase, for example, can be effectively worthless to the overwhelming majority of class members, especially when the damaging event took place years earlier.

But General Mills has been ineffective at stopping the class action lawyers and advocacy groups head on, so it proposes to build a list of consumers who will be legally barred from participating in future suits.

Talk about blaming the victims. I hope chief customer officers across the industry will recognize how damaging this policy can be and insist on alternative solutions.

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James Tenser, Principal, VSN Strategies

Am I the only one that thinks I understand why General Mills would adopt this position? Nikki asked: "is the company I do business with genuine and interested in taking care of me? Or are they in it for themselves?" What do you ALL think being in business is about? Many of the respondents are consultants with a different set of viewpoints (and, obviously high morals) than someone who has real experience in a B2C business. I'm not saying a company should lie about their products, and shouldn't treat their customers right. Focus on what General Mills gets right 99% of the time, and not on the percentage that makes good fodder for righteousness. The answer: I hope not for part one, and yes, for part two. PS: My comments do not necessarily represent those of my wonderful company.

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Naomi K. Shapiro, Strategic Market Communications, Upstream Commerce

On the one hand, I despise the lawsuit-happy environment in the US and think for most disputes, arbitration is a reasonable alternative. However, the fact that large corporations like General Mills clearly do not focus on the consumer but rather shareholders is disturbing, but not surprising. This attitude drives savvy consumers to walk away from the conglomerates in increasing numbers and support smaller, truly consumer-centric brands. The battle continues...I think the consumer will win in the end. General Mills and all of your brethren: watch out.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

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