Celebrity Endorsements: What were they thinking?

By now you’ve probably heard about the Kardashian sisters’ most recent win. This time, it isn’t a second hit reality show or another $2 million engagement ring. Instead, Khloe, Kourtney, and of course Kim Kardashian have secured a win in a lawsuit against them by a credit card company for which they were spokespersons.   

The drama began in January. According to Reuters, the girls and their mother, Kris Jenner, were sued by Revenue Resource Group, for forfeiting a contract to promote a celebrity debit card known as the “Karadashian Kard.”   

Initially the sisters agreed to speak positively about the card to the media and on their Facebook and Twitter pages. For their help, the girls would receive a flat fee, as well as a percentage of revenue from all the customers who signed up. But a problem occurred when the Kardashians learned that they were endorsing a prepaid debit card that was criticized for its high fees. According to the Huffington Post, the reality show stars felt they had no duty in promoting a product that might be considered unlawful.    

The judge agreed. The $75 million lawsuit against the girls was dismissed, and Revenue Resource Group was ordered to pay the Kardashians $6,825 in attorney's fees.

Interestingly enough, the “Kardashian Kard” was not the first of these celebrity credit cards that has not become widely popular. According to www.creditland.com Usher and band KISS are some popular entertainers who have formerly been the face of such a card. Currently, only a handful of these cards exist and most are phased out with time.  

Why does this happen? Prescott Perez-Fox is an expert brand developer and designer in New York City who blogs about branding at his site, Perez-Fox.com. He spoke to creditcards.com about this issue for celebrities. 

“The notion of 'member since' stamped on the front of a credit card helps customers reinforce this feeling of pride over time. Celebrities, however, exist in the here and now,” he said. “Since they go out of fashion with every changing season, most consumers aren't willing to throw away their hidden 'time equity' for someone who may be old hat by this time next year.”     

Perez-Fox continued to explain the most often, celebrities won’t agree to this sort of prepaid card contract just for the money. 

“Yes, celebs may earn a few dollars by lending their name to a financial product or service, but the damage to the celebrity 'brand' is far-reaching. It makes the celeb appear as a money-grubber, someone who doesn't value his own name and is willing to slap his face on any old thing that will sell.”

For the Kardashian girls, the bad stigma associated with wide-reaching fees from Revenue Resource Group, made them pull out of the agreement also. Luckily, their reputation was salvaged.