Hidden Cost Of 'Free' Apps: How Your Data And Decisions Are Monetized
Let's be honest: 'Free' apps such as Robinhood and TikTok are everywhere, shouting out that you can get wealthy or be entertained without spending a nickel. These slick devices and mood-altering effects have fixed tens of millions of people in their shadow. But here's the truth about free stuff: nothing is free. They also profit from your data, push you towards riskier bets and costing people thousands of dollars in losses and nothing to show for it.
Whether you chalk it up to gamified trading and influencer hype, or the endless email promotions, the price of these platforms is finally sinking into the consumer psyche. Robinhood had burst on the scene in 2013, with a sales pitch about commission-free trading and a mission to 'democratize' wealth. The infinite scroll of short, addictive videos on TikTok made it a global phenomenon. Both apps are free to download and use and do not require a subscription. But if you are not paying, then you are the product.
Robinhood made $331 million in 2021 from 'payment for order flow,' a way that market makers pay to process your trades, in order to nudge you to trade more, whether or not it's a bad call. ByteDance, the Chinese company that owns TikTok, has been accused of sharing user data with advertisers that could be used to employ supremely targeted ads. A 2023 report by the Center for Digital Democracy put TikTok's data driven ad revenue above $15 billion a year.
These apps don't just accumulate information; they drown you in it. Robinhood's app is designed to feel like a game, complete with bursts of confetti when you make a trade and push notifications that encourage you to keep up with the Joneses. It's no wonder many of its users were participating in dangerous options trading as of 2022, according to FINRA, and the vast majority having zero investing experience or knowledge.
TikTok's algorithm also ensures you keep scrolling by serving up more of what hooks you, be that videos that tout 'meme stocks' such as GameStop or AMC. Social influencers are pushing these stocks which results in a buying frenzy. That was also true in 2021, when investor hype on Reddit and TikTok sent the share price of GameStop soaring before the price tumbled and retail investors got 'left holding the bag.'
The problem: real people are the ones paying the price. According to a 2021 CNBC article, Dogecoin's 26,000% surge in six months was driven partly by teens and young adults on TikTok and Reddit, many of whom used apps like Robinhood to trade. The article highlighted that inexperienced investors, often in their late teens to early twenties, were drawn to the 'get rich quick' scheme, with some losing significant sums when the market corrected.
It's important for investors to understand that the algorithms on these platforms privilege what benefits them, not what's best for you. The S.E.C. fined Robinhood $70 million in 2023 for confusingly documenting risks to users. TikTok's been sued over privacy problems, but both just keep getting bigger.
Key Takeaway: "Free" apps come with a catch. They profit from your data, attention, and sometimes your finances. Be cautious and always conduct thorough, independent research before investing, and don't let app nudges or influencer hype drive your decisions.
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USA Today
6 minutes ago
- USA Today
They returned used toilets and dirty rugs to Costco. Then came the backlash.
Shoppers pushing the limits of Costco's famously lenient "risk-free 100% satisfaction" return policy by getting full refunds for sagging sofas and stained mattresses are dividing the internet. Evelyn Juarez is a proud card-carrying executive member of Costco. She jokes it's the only black card she owns. Every week, her heels click up and down the warehouse aisles as she hunts for new deals, stocks up on groceries and grazes on samples. In nearly two years, Juarez never returned a purchase, even when her newly purchased rug began to fray. But then her 2-year-old daughter smuggled a bucket of slime into the living room and slopped the blue goo on her ivory-colored rug. Juarez was about to chuck the stained rug when a friend urged her to take it back instead. 'I was like, girl, are you trying to embarrass me?' replied Juarez, a 29-year-old mother of two and social media influencer from Dallas. But then she got to thinking. 'You know what? I have been spending thousands of dollars. I just bought my couches from Costco, too. I don't think $150 will hurt them.' She was nervous as she approached the return counter but minutes later, Juarez walked out of the warehouse with a full refund. The next day, she bought a replacement rug from Costco. 'After that, I am going to keep my membership forever,' she said. 'I am not sure if it's out of guilt or out of amazement.' From low prices on quality products to the wildly popular $1.50 hot dog-and-soda combo, Costco knows how to worm its way into shoppers' hearts and pantries. One of its most popular perks is the no-questions-asked (or few questions asked) "risk-free 100% satisfaction guarantee" return policy that fills shoppers with buying confidence and their carts with splurges. Costco gives its customers who pay annual membership fees of $65 to $130 an unlimited grace period to return most purchases for a full refund. But the liberal policy has become a touchy subject as eyebrow-raising returns go viral, from toilets still sloshing with dirty water to Christmas trees returned after Christmas. Shoppers regularly square off online over what should – and should not be – returned. The online fury reached a fever pitch in 2024 when a Seattle woman got a full refund for a 2 ½-year-old couch because she no longer cared for the color. Why Costco returns are controversial Rampant abuse sets off fears that the warehouse club will roll back its generous return policy, said Addison Marriott. Marriott, 24, who works in advertising, took some heat when she and her husband returned an air conditioning unit they bought to weather the sweltering summer months in their one-bedroom Los Angeles apartment and then posted about it on TikTok: "We broke married kids love your return policy." 'People were nervous that if the video blew up, Costco would find out and restrict their return policies,' Marriott said. Parker Seidel, a 26-year-old YouTube creator from Orange County, got blowback when he tested the limits of Costco's return policy with a series of stunts, getting his money back for a half-eaten chicken bake and three-week-old flowers he never put in water. Next up: Returning a Vincent Van Gogh Sunflowers Lego set after completing it. 'I was getting so much hate. I was like, 'Oh my god, I was not expecting this at all,'' Seidel said. For Juarez, what she calls 'carpetgate' blew up on TikTok, where she has 2.4 million followers. 'You are so classless,' one person commented. 'Girl what, your kids stained (the rug) and now you are making it Costco's problem?' 'You are paying for the perks of having products that you can buy and products that you can return,' she told USA TODAY. 'It's a really good way that they hook you in. I am sure that they make way more money off of us purchasing stuff than they lose from returns.' Return policy is coveted Costco perk Costco did not respond to requests for comment on its famously lenient return policy but David and Susan Schwartz, the husband-and-wife team behind the 2023 book, 'The Joy of Costco: A Treasure Hunt from A to Z,' say it dates back to the company's origins. When they interviewed Jim Sinegal, the Costco co-founder and former CEO told them about a call from a store manager asking if the store should let someone return an unusual and expensive item. 'Jim Sinegal said, 'What are you calling me for?'' Susan Schwartz said. ''Take it back.' And they did.' That laid-back attitude has stood the test of time and industry headwinds – with an exception here and there. In 2007, Costco limited most consumer-electronics returns to 90 days after returns of flat-panel TVs squeezed profit margins. "Our view is, even with these changes, we still have the best return policy in the retail industry," former chief operating officer Richard Galanti told the Wall Street Journal at the time. A lenient return policy is even more important for today's inflation-weary shoppers, said Anna Brennan, principal analyst for club and specialty retailers at marketing data and analytics firm Kantar. 'It all ties back to reducing some of that stress and risk on the shopper and members' part, especially in an environment like the one we're in today, where every purchase feels particularly weighted,' Brennan said. 'I think that really helps the member make some purchases maybe they wouldn't have otherwise.' How Costco hooks you Come for the hot dogs, stay for the gold bars That was the case for Troy Pavlek, a 31-year-old software developer from Edmonton, Alberta. A Costco executive member since 2012, he says he pays to shop at Costco for 'the confidence that anything you buy in the store, the store will stand behind or your money back' and he has rarely had to return anything. While remodeling his house, he splurged on two $900 toilets. When the manufacturer refused to replace a cracked plastic piece that joined the lid to the toilet on one, he returned the other one unused and still in the box — minus the lid. Should I return this to Costco? Ethics debated According to Ayelet Fishbach, professor of behavioral science and marketing at the University of Chicago Booth School of Business, an ethical dilemma drives the spirited controversy over Costco returns: 'Should people follow the letter of the rule or the spirit behind it?' Fishbach got an inkling of where most people stood when she surveyed hundreds of consumers on whether they would return lightly worn clothing. About 40% said yes, but that number dropped significantly when they were asked if they would do it repeatedly. 'It seems many people are comfortable occasionally bending the spirit of a policy, and may even find it amusing, but hesitate to make a habit of it,' she said. Take Susana Rodriguez, a mother of seven from Henderson, Nevada. She returned a canopy used by her small business, Cocos Frios El Primo, after the wind tore it apart in less than two months. But Rodriguez, 45, said she draws a line for returns after a certain amount of time. Costco told her she could return a TV that was a few years old. 'I didn't do it," she said. "It lasted what it lasted.' Behind the Costco returns counter Costco employees on the returns front lines have seen it all, from dirty and stained mattresses to half-eaten trays of cookies. Then there are the shoppers who rent from Costco. Televisions bought before the Super Bowl and returned right after. Chairs and tables purchased for an event and wheeled in the next day. A couple of the staffers spoke with USA TODAY on the condition of anonymity because they feared they could lose their jobs. While they wish people wouldn't take advantage, they say the return policy does exactly what it was intended to do: It breeds loyalty, drives sales and entices new members. 'It's great because it gives members peace of mind,' one Illinois employee told USA TODAY. 'I'm sure that works in our favor all the time, because people buy things and then they decide they love them and it's worth keeping.' While most returns are accepted, some repeat offenders get flagged, a Connecticut employee said. One shopper kept returning lighting fixtures purchased nearly a decade ago as she remodeled her home, lightbulbs and all. After a few months, the store turned her away. 'That is pretty common,' the employee said. 'People will remodel their homes and they will literally pull up their flooring and return it.' In rare cases, when the return policy is 'really abused,' Costco revokes memberships, the employee said. But for most shoppers, she said, 'we'll take anything.' The store tries to donate as much as it can, she said, but some returns go to waste. Returned food that needs to be temperature controlled, for instance, gets tossed in the trash. She estimates her warehouse throws away 'a few hundred dollars' worth of food every day. But the policy usually benefits Costco, the employee said. She recalled one instance where a customer was torn between a Costco vacuum and a cheaper model from Macy's. 'I said, 'Well, what if you have to return it? Are they going to accept your vacuum return six months down the road? Probably not. But we will.' So she spent the extra couple hundred dollars and got it from us,' the employee said. Could abuse end Costco returns? Increasingly, retailers are under pressure to ditch anything-goes policies as fraud and abuse erode profit margins. Of the $685 billion in merchandise returned in 2024, $103 billion was lost to fraudulent and abusive returns and claims, according to a recent report from Appriss Retail. In 2018, L.L. Bean traded in its lifetime return policy for a one-year limit, noting that some customers expected returns for heavily worn products or items purchased at yard sales. Duluth Trading Company made a similar switch in 2019. Retailers have also begun charging restocking fees or for return shipping to recoup losses. Not Costco. It can afford to absorb the losses because it relies on a membership business model, analysts say. Last year it earned $4.8 billion in revenue from membership fees alone. Returns are an important part of keeping those members happy, said USC Marshall School of Business marketing professor Kristin Diehl. Research shows that shoppers often base purchases on how hard or easy they think it will be to return something. More than half of consumers decided not to buy from retailers due to restrictive return policies and almost a third of consumers stopped shopping at stores due to negative return experiences, according to a recent report from Appriss Retail. On the other hand, 7 out of 10 consumers say they made at least one additional purchase because of a positive return experience. Costco members are less likely to abuse the privilege because returns are tied to their membership and they don't want to get blacklisted, Diehl said. They also consider themselves part of the Costco community. The return policy fosters a sense of belonging and good will, something Costco has in bulk. It's also 'great word of mouth,' said Neil Saunders, a retail analyst at the research and analytics firm GlobalData. That's why it's here to stay, he said. Whatever "miniscule cost' from return policy abuse is worth it to Costco. 'It's one of the magical things people like about Costco,' Saunders said. 'There are certain things in Costco that are pretty set. The price of hot dogs is one of them, the return policy is another.'
Business Insider
7 minutes ago
- Business Insider
I grew my career at TikTok from intern to global product marketing manager before quitting. Here's what working there was like.
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I was interviewed by a hiring manager and someone I could be working with. I passed the interview and agreed to work 20 to 30 hours a week for an hourly fee. When I joined, Trump had just brought the idea of banning TikTok to life. TikTok was on a hiring freeze, but they could hire interns. I was excited about getting the job, as it's a very cool, trendy company to work at. TikTok sent me a huge welcome package I received a pair of TikTok embroidered Allbirds wool running shoes, a Parkland backpack, sweatshirts, a branded beach towel, a Bluetooth speaker, and an Owala water bottle. The office in Austin had around 600 employees. Everyone worked remotely. It was weird joining the company and not meeting anyone face-to-face. For my online orientation, I watched videos, read many internal documents, and was given a timeline of what would be achievable during my internship. As time went on, I evolved in my role I started as a technical product specialist for the ads department. I troubleshooted issues for small businesses buying ads on TikTok. If there was a product bug, I escalated it to the product manager to get it solved. I was on a team of five, but everyone else was a product marketing manager. I started to become interested in their role, and so my coworkers took me under their wing and taught me how to do their jobs. By the end of my internship, I was probably doing 50% of my hired role and 50% product marketing work. I asked my manager if I could interview for a full-time position as a product marketing manager The company was growing and needed more product marketing managers. I also asked if I could work from the New York office. I didn't need to live in New York, as I'd still be working remotely, and the New York office was under construction, but I wanted the experience. I interviewed and was offered the job. I moved to New York in August 2021 and rented an apartment with one of my college friends. I became a product marketing manager for ads I worked with the product manager to ensure that all of our products were ready to go to market. I learned a lot, and I learned quickly. If it were a launch, we'd recruit our target customers and do research with them to ensure that the product was on the right track. If the products were already live, I'd work with customers to understand their pain points and find out how we could improve the existing product. One product I helped launch was Video Insights, which shared how much engagement you had at each point in your video. I visited the office for the first time in October 2022 The view of the New York skyline from the office was amazing. During the winter months, when the sun would set early, it was the ultimate place to watch sunsets. The walls were decorated with cool murals and neon artwork by local artists. The kitchen was filled with free snacks like Kit-Kats, Cup Noodles, and coffee. Over two years, the office changed dramatically They built a giant amphitheatre, the famed pink corridor, the gender neutral bathroom with its fit check mosaic, and an entertainment room with games for when creators visited. There were yoga lessons for staff, and speakers visited often. I listened to comedian Zarna Garg and TikTok CEO Shou Zi Chew. I also joined many wine and pizza nights. We went through at least one, if not multiple, reorganizations each year One of these reorganizations involved dissolving my team, and we were moved to other teams in January 2022. I moved onto a global team. I traveled to Europe for a three-week business trip, visiting offices in London, Paris, and Berlin. I also visited the ByteDance campus in Shanghai. My job was similar, but the product managers I was now working with were based in China. Due to the time zones, it was tough to maintain consistency. Late-night meetings would pop up, and if I wasn't online when everyone else woke at night, it would make me stressed. By October 2023, we were asked to work in the office three days a week I'd now reached a point where I was sharing tips and tricks with new staff, and I met with summer interns who reached out for coffee chats. In March 2024, there were congressional hearings to see where Congress stood on TikTok. That was when a lot of people internally felt like maybe we should look around, so that's when I started to think about trying to find another job. The shutdown was in January 2025 TikTok was only banned for 12 hours, but I had left in June 2024. The previous summer, I met someone in an airport lounge who worked in tech. He ended up being the cofounder of Californian software company Emerge Tools. I now work for them remotely. I miss the people I worked with at TikTok a lot. I'd grown with them as an organization from such an early time, and I felt like I had a lot of ownership and impact on the work that I did. I thoroughly enjoyed my time with TikTok and am grateful for the opportunities I had there.
Wall Street Journal
7 minutes ago
- Wall Street Journal
Tom Hayes, Libor ‘Ringleader,' Wins U.K. Appeal to Clear His Name
Tom Hayes, the former trader who became the face of the Libor scandal, won a last-ditch appeal to clear his name, undoing one of the most high-profile cases to emerge from the global financial crisis. The U.K. Supreme Court on Wednesday quashed the landmark 2015 conviction, which saw Hayes spend more than five years in prison before he was released in 2021.
