The secret costs of cash giveaways: the case of Temu’s £50 promotion

Since the Covid-19 pandemic, there has been an explosion in e-commerce platforms like Shein and Temu. The appeal of these sites is certainly not their reliability, ethics, environmental policies or customer care but rather the obscenely low prices of the products they sell. 

Nonetheless, the cost of living crisis in the UK has led many of these sites to ramp up the pressures on consumers even further, adopting all kinds of new marketing tactics to get people to sign up and spend. 

Last week consumers were raising questions about Temu, the prolific Chinese e-commerce company, and the terms of their viral £50 cash giveaway. Upon a closer look, the terms of their promotional offer suggest that there is another product that they are looking to capitalise on – personal data, including biometric data like your face and voice! 

In this article, we take the case study of Temu to reflect on how cash giveaways and other promotions should be regarded with caution by consumers. 

Who are Temu and how are their products so cheap?

You may be wondering – who are Temu? This Chinese e-commerce giant was founded in 2022 and is headquartered in Boston. Their tagline claims they want to help you “shop like a billionaire” – and they do this by offering more than 25 million items at prices so low you would almost never hesitate to press purchase. 

Temu’s website and app stock a vast array of products – from toys and technology, to fast fashion and homeware. In January 2024, the app had been downloaded almost 47.8 million times. 

The way that Temu can sell such a huge amount of products and so cheaply is via a controversial and increasingly pervasive selling scheme known as drop-shipping: products are listed by third-party sellers and then shipped directly from manufacturers (mostly based in China) to shoppers (mostly based in Europe and North America). 

This model keeps overhead costs extremely low – all products are made and shipped by the manufacturer so there is no need for the company to rent a warehouse to store products or pay employees to manage the shipping or customer service.

Cash giveaways and promotions: fantastic perks or flimsy incentives?

In fiercely competitive online markets, e-commerce sites will incentivise consumers to shop with them. Cash giveaways are an increasingly common tactic to tempt consumers into making purchases they otherwise wouldn’t. 

Temu’s recent cash giveaway offered new customers 24 hours to get others to sign up via a shareable link. The company promised that each would receive a cash reward of between  £40 and £50 – to be paid into their Paypal account or given as Temu store credit. 

The promotion quickly went viral on social media with thousands of people eager to cash in. However, it started becoming subject to closer inspection. Specifically, the terms of Temu’s promotional offer sparked concern among consumers as to what they were inadvertently granting the company in exchange for cash. 

Across X (formerly Twitter) users shared screen grabs of the campaign’s usage and publicity rules. They showed how the terms of the promotion meant that consumers had to agree to permanently hand over considerable amounts of personal data – including biometric data.

In the section that received the most scrutiny from consumers, Temu asks participants to give the company consent to use and publish their “photo, name, likeness, voice, opinions, statements, biographical information, and/or hometown and state” for advertising or promotional purposes. Not only this – the terms further state that this can take place in any media worldwide and “in perpetuity” – with no fixed end date.

Many users pointed out that under these terms not only could Temu sell their data but they could use people’s biometric data – such as facial likeness and voice – to create deepfake ads.

Consumer concerns and challenging companies

Facing a barrage of concerned consumers and wide press coverage, Temu has denied all accusations that they are trying to extract and sell personal data for these purposes. However, thanks to the consumers who raised red flags about these dodgy terms, Temu has also “tweaked” their T&Cs so that the clauses in question have been removed. 

Rather than allaying consumer concerns, this U-turn suggests that consumers may have been on to something – and should continue to be vigilant in future when it comes to cash giveaways and to challenge companies directly on these issues. 

The initial terms of the giveaway would have contradicted UK data protection rules, whereby users’ consent must be freely given, specific and able to be withdrawn in order for it to be relied upon as a reason for data processing. Following the outcry on social media, the Information Commissioner’s Office (ICO), which acts as a data watchdog, has been called on to investigate consumer concerns about the offer. 

How can you hold on to your personal data?

Apps collecting a lot of data from users – often more than they actually need – have become entirely commonplace. As well as cash incentives, the long, complex and sometimes impossible-to-decipher privacy policies and terms and conditions, can make it really difficult to decide whether we should surrender our data to use a service.

Lisa Webb, a consumer law expert from Which?, states that “consumers should definitely consider whether they are comfortable giving this sensitive data away” when offered promotions.  

While navigating these new marketplaces can be hard, we’ve pulled together some key tips if you want to keep your sensitive data safe when entering promotional offers:   

• Be aware! Try to stay mindful of the permissions requested by a promotion and keep track of what data you are being asked to grant a company access to. Prior to downloading an app, make sure that you review the permissions it’s requesting. When signing up for a promotional offer carefully review the terms and conditions regarding data privacy and security.  
• Only share what you are comfortable sharing. Most companies will give multiple options for how much and what specific data you are happy to share. Certain data collection can be optional when first downloading. Always decline the options you are not 100% sure about sharing with a company.   
• You can change your mind. You have the right to withdraw your consent at any time. If you change your mind about sharing data, you can immediately decline any app access through your phone settings:  
  • For iPhone go to settings > scroll down to apps > tap on app > turn off permissions/tracking. 
  • For Android go to settings > apps & notifications > click on app > tap permissions > turn off permissions/tracking.  

• Do your research. By doing some research on the organisation, company or platform you’ll have more of a picture of their legitimacy and whether your personal information will be handled securely. 
• Ensure any promotion complies with data protection regulations. You can check  gov.uk/data-protection if you are unsure about data protection regulations.  

If in doubt ask yourself – how much of your data is going to be collected, how it is going to be used, and are you comfortable with that. 

Remember, these companies would never give away free money: they are paying for you and your data, so make sure you have a think about whether it’s a great deal for you or for them.

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk.