May 28, 2009 11:00 am US/Eastern
Pink Slip Protection: Too Good To Be True?
Large Companies Seek To Help Out Unemployed Customers
NEW YORK, NY (CBS) ―
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Walgreens is one company offering its customers pink slip protection.
CBS
As consumer spending is slowing, businesses are offering customers "pink slip protection" in an effort to get them to spend again, CBS station WCBS-TV reports.
But business consultant Michael Silverstein said consumers should be careful before dealing out the dollars.
"Companies are reaching out to consumers and saying, 'We can help you. We understand your concerns,'" Silverstein said. "It's basically become a cascade."
The concept of pink slip protection first started when leading carmakers promised to step in and help unemployed customers make auto payments. Homebuilders have also embraced the strategy, with some promising their protection on their mortgage payments in the event of a layoff.
Virgin Mobile USA has also offered its unemployed customers pink slip protection. Virgin said it will pay someone's cell phone bill while that person searches for work.
Clothing store giant Joseph A. Bank recently developed the concept of a risk-free suit, which costs just under $200. Men that have purchased the suit can then get their money back, and keep it, if they find themselves laid off.
"I think it's a great idea," one New Yorker said.
Pink slip protection also provides entertainment and travel deals.
The Minnesota Timberwolves of the NBA are offering season ticketholders who lose their jobs refunded money for any unused seats.
JetBlue travel spokeswoman Noreen Courtney said the company is trying to keep Americans mobile in these troubled times.
"If you book air travel with JetBlue or one of our JetBlue getaway vacation packages and you lose your job, we'll refund your money," Courtney said.
Silverstein said Americans need to spend money intelligently, even with the pink slip protection deals out there.
"There is a buyer beware," Silverstein said. "You really do have to read the fine print … You do have to understand what the terms and conditions are."
Sliverstein said most deals have deadlines and specific requirements. They also require customers to prove they are out of work.
The following is al ist of companies that offer pink slip protection:
Cabelas
Virgin Mobile USA
Jos. A. Bank
Walgreens
JetBlue
Hyundai
Saturn
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