Kardashian Kard is Kancelled! Who's to Blame?

Kardashian-Kard-KacelledI have to say, I never expected we would mention the Kardashians here on the Opus Magnum blog, but this story does bring up some interesting business ethics questions.

In early November, the Kardashian sisters took their reality TV show  “Keeping up with the Kardashians” to a new level by launching a “kiddie kard,” called the Kardashian Kard.  The concept was to create a pre-paid MasterCard for pre-teens, featuring the fashionistas, and to make “Keeping up with the Kardashians” at the mall a lot easier—at least until the card must be reloaded.

According to CNN, “there’s a whole series of youth oriented pre-paid debit cards from MYPLASH picturing rockers, celebrities, and rappers.  Vampires, too, which is especially fitting.” Yet only after a few weeks on the market, the Kardashian Kard has been kanceled.

The abrupt cancellation comes after a furious backlash, slamming the card for having “outrageous fees” and scolding the reality TV family for using their celebrity status to endorse such a card.  The Kardashian Kard had an annual fee of $99.95; a $7.95 monthly fee; and a $2 per item charge when paying bills. Customers were also dinged with a $2.50 charge for every ATM withdrawal and $1.50 for every call to their service center.

On Tuesday, November 30, University National Bank of St. Paul (located here in Minnesota), which issued the Kardashian Kard to more than 250 customers (through a contract with The Revenue Resource Group, LLC), notified their customers that their cards "will be active for 30 more days, after which they will receive refunds for any balances and fees they have incurred."

The questions that arise here are who made the initial decision to gouge customers with so many fees, and who was profiting from them? Even E Online, the website of the network on which their show airs is asking, "Can Kardashians Still Get Sued for That Debit Card?" Probably not, it seems.

Because they probably had nothing to do with the business decisions behind the card—the fact that people were specifically being charged up to $99.95 to activate their cards, plus $7.95 a month after the first year. If Kim had actually dictated such terms, or made day-to-day decisions, that would be different.

Pamela Banks, senior policy counsel for Consumers Union in Washington, D.C. said: "Tying a card to someone who is famous or wealthy can get more consumers to say, 'I want to be more like the rich and famous.' But prepaid debit cards do not have the same protections that traditional debit cards have, and often have hidden fees that eat away at their value."

Kim Kardashian’s family once staged a shopping intervention for the fashionista to slow down her compulsive spending habits.  Seems fitting for the reality TV star whose “Kardashian Kard” has been kancelled!