Monday June 11, 2012 : DON'T BET ON THIS MARKETING STRATEGY LASTING
Yipiii’s popularity with High Street retailers may be short lived.
A Daily Mail expose on a popular High Street retail store marketing strategy that involves an element of gambling has triggered a withdrawal by many top companies involved in the scheme.
The system involves the Malta-based affiliate marketing website Yipiii.co.uk, operated by a Malta-registered company called Yippiii Gaming, which encourages shoppers to make GBP 1 wagers on the spin of an online wheel of fortune in the hope of obtaining products for free or promotional discounts.
The scheme includes offering customers various incentives to gamble more, and little in the way of precautions against underaged or problem gambling.
The expose has resulted in a major row, with around 150 top High Street retailers accused of "preying" on their most vulnerable customers during difficult times by directing them to the Yipiii website. The furore has prompted many of the participating companies to withdraw from the scheme or order investigations into its operation.
In testing the scheme, the Daily Mail team found that shoppers lose GBP15 on every GBP100 they gambled. Shoppers using the stores' own websites to buy everyday items were told they have an ‘unbeatable way to win anything you want'.
They are urged to open an online account with the gaming company which they can fund as often as they like. This allows them to browse through the stores' catalogues. When they find an item they want, they can choose to ‘play' or ‘shop'.
"If they click on ‘play', GBP1 is deducted from their account and a roulette wheel pops up. If it lands on red, the user has won the item. If they don't win, they are not required to buy the product. But they are encouraged by various incentives, including discounts on future purchases and up to 25 ‘free plays', to spin the wheel again," the Mail's investigating team reports.
Yipiii told investigative journalists that the odds of winning vary according to a complex mathematical formula, but that 85p in every GBP1 spent is returned to prize winners, with the remaining 15p used to cover profit and costs.
Mail on Sunday reporters put some of the company's claims to the test, gambling a total of GBP162 on the site in an attempt to win household goods from well-known outlets. But 161 of the 162 bets lost….and the only win was a GBP19.99 fish-bowl toy.
"The site lures customers with promises of ‘free' goods worth up to GBP30,000 and a pledge that ‘with Yipiii, you never lose'," the team reported.
Software additionally presents the Yipiii wheel of fortune every time a customer logs on to one of the participating retailers' websites.
Yipiii users are encouraged to keep gambling by a variety of incentives, including the promise of discounts on future purchases and special offers of free spins of the roulette wheel. Another ruse to keep customers on the site as long as possible is to compensate for a failed bet by offering free entry to online competitions.
By the time InfoPowa went to press Sunday morning, Marks and Spencer, Asda, Debenhams, Comet, Sainsbury's, Boots, Dixons and Selfridges had all confirmed they were withdrawing from the scheme.
The politicians were getting involved, too; Business Secretary Vince Cable said he was ‘disturbed' to hear of the scheme, saying: "Gambling is quite rightly highly regulated because of the damage it can cause and it's clearly unacceptable to blur the boundaries between gambling and retail shopping. I am pleased to hear that responsible retailers are moving away from this."
Yipiii founder Chistoph Klingler, an Austrian businessman, told The Mail on Sunday he thought his scheme would work well in this country because the British are ‘confident' with online shopping and ‘love a flutter'.
His company is run from an office in the Maltese capital, Valletta, and is not subject to UK regulation or supervision. It is licensed by only one body, the Lotteries and Gaming Authority of Malta, and, as a foreign firm, does not at present have to register with Britain's Gambling Commission.
A UK Gambling Commission spokesman confirmed: "You do not need a licence from us to run a remote gambling service if all of your remote gambling equipment is located outside Britain."