Thursday, August 19, 2010

Anatomy Of A Fail: Rise And Fall Of The Tea Party Exchange


It seemed like a brilliant idea: provide a way for tea party-conscious consumers and tea party-sympathetic businesses to join forces and, well, support their local tea party. It ended in disaster, hurt feelings and more than a few accusations of flim-flammery.

Over the past week or so, the Dayton Daily News has been cataloging the rise and fall of the Tea Party Exchange, one Ohio tea party leader's plan to use capitalism to the movement's favor. The plan was simple: tea party supporters in Ohio would obtain a "TPX-Great American card" which entitled them to discounts at participating businesses who agreed to share some of their profits with a local tea party group. The Exchange tweeted on June 20 that it was up and running. Here's how it worked, according to the paper on Aug. 13:

The TPX card is "similar to a customer-loyalty card consumers can attach to key rings -- and show it at a participating business can get a discount on the company's services. The local merchant then gives 5 percent of the sale revenue to the local Tea party chapter to help fund rallies."

The man behind the plan is Donald Hutchinson, a "human resources consultant" who said he planned to debut the Exchange system at the big September tea party rally in DC. Ohio was meant to be "the test market" for the program, according to what's left of the Tea Party Exchange website.

It appears that things didn't work out the way Hutchinson planned.

The Exchange quickly signed up 30 businesses, according to the Dayton Daily News, ranging from Evans BMW, Volvo, Volkswagen to O'Learys Pub & Grub to The Bronze Salon Tanning. At least some of the businesses were tea party-friendly ones. Greg McAfee, president of "McAfee Heating and Air Conditioning in Kettering," told the paper that he joined the Exchange after "speaking at Tea Party rallies in April 2009."

Others joined the Exchange, apparently, because Hutchinson said that signing on with the tea party would bring them lots of business.

It took more than just common cause with the tea parties to do business on the Exchange, after all -- as we would learn in AP reports later, it also took a $150 membership fee that went to Hutchinson.

Almost as soon as it opened for business, the Exchange started to have some serious problems. Number one? It turns out Hutchinson outsourced building the program's homepage to a company in India. (That's a real tea party no-no, for those playing at home.) An Ohio blog,, sniffed out the story. Hutchinson fessed up in an interview with the Daily News:

"I designed the website myself. However my programmer is outsourced," he told the paper. "Local database programmers are welcome to talk to me."

Meanwhile, local blowback caused things to break down. Democratic Congressional candidate Joe Roberts threatened to lead a boycott of Exchange businesses, telling the Daily News, "Once those businesses decided to become political they need to deal with that."

Some dealt with it by backing out of the Exchange as quickly as they could. Patti Ballachino, owner of Reiber Cleaners, told the paper, "I've had probably 60 to 80 people come to me and say they aren't going to come to me anymore." She told the Daily News she never expected customer anger to be the result of joining the Exchange after what Hutchinson told her:

"I'm not into politics a whole lot," said Ballachino, who said she was not familiar with the Tea Party when Hutchinson convinced her to participate. "He stated you could get more business, everybody in this group will come to you."

Ballachino told the paper that "since she paid Hutchinson $150 on July 1 she has had a customer use the TPX card just twice -- and both times it was Hutchinson."

"I want to apologize to my customers," she told the Daily News. "I'm here to clean their clothes, not worry about politics."

Reiber Cleaners wasn't alone. Other businesses wanted out, too, and pretty soon Huthinson's list of 30 companies was down to "just over two dozen." Within a few days, Hutchinson had canceled the 5% discount that went with the TPX card, telling the paper "it caused too much confusion about the intent of the program."

On Aug. 18 -- less than a week after the whole thing was publicly announced by Hutchinson -- the founder of the Tea Party Exchange shut the program down. It seems that Hutchinson's tea party Music Man act had run out of steam.

"I feel like I was hoodwinked," Beef O'Brady's Family Sports Club owner Bill DeFries told the Daily News. "I think [Hutchinson] was trying to make money."

Like Ballachino, DeFries found that being a part of the Exchange pissed off more customers than it impressed. He "received threats and was called a Nazi by one woman," according to the paper.

Hutchinson didn't make the same kind of public announcement when he shut down the Exchange as he did when he started it. The only evidence the dream was dead came from the Exchange website, which disappeared and was replaced by the message that's up there now: "Website and business operations are being stopped until further notice."

Business owners began to demand their $150 investment back. Yesterday, Hutchinson promised the Daily News they would get it. As for the tea party Hutchinson said he was hoping to fund with the Exchange? Things worked out for them only marginally better than they did for the businesses that participated.

Rob Scott, president of the Dayton Tea Party, told the paper his group earned all of $30 from the enterprise. Still, he said he wished Hutchinson didn't shut it down.

"It's his company. I disagree with it. I stood my ground with the Dayton Tea Party," Scott told the Daily News. "I understand in the business world you have to be a little more cautious."

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