Before Bitcoin: The Rise and Fall of Flooz E-Currency

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iStock

In the late 1990s, Silicon Valley entrepreneur Spencer Waxman was in Morocco on holiday when he heard an Arabic slang term for money—flooz—that stuck with him. In the dot-com boom taking place back in the United States, URLs with obscure etymology were popular. When Waxman and partner Robert Levitan decided to co-found a novel way of disrupting the online commerce industry, calling it Flooz.com was almost a foregone conclusion.

What Levitan and Waxman envisioned was a virtual gift certificate that would drive business to participating online retailers, give consumers some sense of security over their private information, and make shopping for stubbornly gift-resistant recipients easy. Rather than merely offering cyber currency, this was a service with purpose.

Unfortunately, it was also one that was doomed to fail.

A screen capture of Flooz.com
Flooz.com

Non-cash currency has been with us since the Chinese used cowry shells to sort out debt for goods and services more than 3000 years ago. In the 1960s, credit cards became an alluring alternative to saving and carrying paper bills. When online retailing exploded in the 1990s, it was only natural that startups would begin to explore virtual payment methods.

At the time, digital transactions were perceived by many consumers to be a near-guarantee of identity theft. Handing a card to a vendor in a closed-loop retail environment was one thing, but the thought of hackers seizing their information once it was entered into the borderless environment of the internet kept many away from online shopping.

As it turns out, that paranoia would turn out to be justified in our current climate of constant data breaches. It was also good for businesses hoping to turn their apprehension over credit card security into a monetized solution. Flooz.com debuted in 1999, just one year after another currency-based URL, Beanz.com, had garnered press. Beanz were a kind of earned points system, with approved transactions gifting customers with redeemable gift vouchers. Flooz took a different approach: Customers would sign up to Flooz.com and purchase gift certificates for specific retailers, which they could then use themselves or pass along to a gift recipient via email.

For businesses, it was a way of driving traffic to sites; for consumers, it was a way to keep credit card transactions limited to one vendor; for Flooz.com, being the intermediary meant taking a 15 to 20 percent cut of completed transactions on the selected retail sites, which ranged from Godiva Chocolates to Barnes & Noble and Tower Records.

To help Flooz.com cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and Flooz.com money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using Flooz.com.

Whether it was Goldberg’s pitch or the concept itself, Flooz.com met with a receptive audience. The company debuted in the fall of 1999, and had opened 125,000 accounts by January 2000. That year, roughly $25 million in Flooz.com money was purchased and used. (In a nod to the impenetrable vocabulary of the internet at the time, the media loved to point out that Beanz could be used to purchase Flooz.)

Bolstered by the attention and early success, Flooz.com was eventually able to raise $35 million in venture capital. Consumers could meet their gifting obligations by emailing a code to their gift recipient without having to waste time shopping. For a time, it appeared Flooz.com would become a leading method of payment for online transactions.

Actress and Flooz.com spokesperson Whoopi Goldberg is photographed during a public appearance
Paul Hawthorne/Getty Images

But it didn’t take long for the seams in the Flooz.com model to show. While gifting vouchers to family and friends was convenient for the gifter, the giftee was stuck with a very limited number of vendors that took Flooz.com as payment. If Amazon, for example, had a deal on a DVD or book that Barnes & Noble didn’t, Flooz users were out of luck. Shopping for a bargain wasn’t possible.

The second and most crippling detail was one Flooz.com was forced to make in order to strike deals with vendors. The company guaranteed its transactions, meaning that it would make good on orders even if Flooz dollars had been purchased via fraudulent means. By the summer of 2001, that commitment became a tipping point. Agents from the FBI informed Levitan that they suspected a ring of Russian hackers had purchased $300,000 worth of Flooz in order to launder funds from stolen credit cards.

This created a paralyzing cash flow problem: As their credit card processor withheld funds until Flooz.com could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for Flooz.com to reimburse them. Suddenly, customers trying to pay with Flooz were greeted with error messages that the site was down.

Those issues, coupled with the fact that corporate clients had already started to move away from gifting employees with Flooz dollars, forced Flooz.com to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. (Beanz.com was also a casualty of the dot-com bust, when participating retailers processing the points steadily went out of business.)

Levitan rebounded, founding the Pando file sharing network and selling it to Microsoft in 2011 for $11 million. Meanwhile, Flooz.com remains a barely-remembered footnote in e-currency, though it would be hard to chart the rise of digital funds like Bitcoin without it. Like with so many other good ideas, timing is everything.

A Gory Toy Story: The Horrible History of the Evilstick

iStock.com/EKramar
iStock.com/EKramar

When Nicole Allen bought a gift for her 2-year-old daughter the week after Halloween at a dollar store in Dayton, Ohio in 2014, there was little indication Allen should have inspected it prior to letting her child play with it. The toy was a princess wand topped with flower petals, with a cardboard package that featured a smiling female heroine and a suggestion that it was suitable for ages 3 and up. The back of the package promised buyers that the toy “Can Send Out Wonderful Music.” It appeared to be little more than a cheap trinket—the kind customers passing through a discount store might glimpse and toss into their cart without much thought.

Allen didn’t notice that the toy’s playful graphics obscured a somewhat malevolent name. At the top, in a juvenile font, was the official name of the product: Evilstick.

It wasn't until Allen got home that she found out why.

Instead of playing “beautiful music,” pushing a button on the wand’s handle activated a maniacal laugh—one made all the more disturbing by the product’s cheap, tinny speaker. Pressing the button also made the toy’s flower top light up, illuminating a piece of foil that was made transparent to reveal a horrifying image of a woman with pupil-less eyes miming the act of slitting her wrists.

The image would be alarming regardless of context. Stuck in a child’s toy and coupled with a light and sound show, it seemed like a cruel prank. Allen’s subsequent complaint made local news before going viral.

Four years later, the questions remain. Who made it? Was this macabre toy an accident of negligent bootleg manufacturing, or was it something more sinister? And why did an amateur sleuth close to uncovering its origins suddenly disappear from view?

 

For years, discount retailers have stocked inventory shelves with goods manufactured in China. The country’s notoriously economical labor costs can undercut most other wholesale suppliers, particularly when low prices are paramount.

But that tidal wave of product has a key and chaotic consequence: a lack of quality control. It’s virtually impossible for U.S. customs officials to inspect containers and single out counterfeit goods or items that infringe on a company’s intellectual property, leading to a significant problem with knockoff merchandise. Earlier this year, MGA, maker of the successful L.O.L. Surprise! dolls, filed suit against distributors of lookalike toys that were being sold for a lower price. It’s an uphill battle—with a Byzantine supply system, locating companies and pursuing legal remedies across countries and continents is a costly and frustrating process. While MGA has successfully held 81 dealers responsible for the fake dolls, dozens more continue to proliferate.

A photo of the Evilstick toy wand with the gruesome image visible

Mike Mozart, Flickr // CC BY 2.0 // Model photo courtesy of Butcher Ludwig

It’s this complex artery of distribution that presumably allowed Dayton Dollar Store owner Amar Moustafa to purchase a supply of princess wands dubbed Evilsticks in 2012. The “princess” appearing on the package was a character named Sakura Kinomoto, star of the late '90s animated series Cardcaptor Sakura and a popular manga protagonist in Japan. In a nod to Pokemon, fourth-grader Sakura has to retrieve a series of magical cards she accidentally unleashed on the world. While she didn’t wield a wand on the show, the package illustration had been altered so that she was holding one like it.

Speaking to news outlet WHIO in Dayton, Moustafa said he had been at a retailer’s convention when he made the deal for the inventory and that he didn’t recall who sold him the wands. They apparently remained in the store unnoticed until 2014, when Nicole Allen contacted WHIO to report her daughter had been troubled by the image hidden behind the foil wrap. For his part, Moustafa pointed out to WHIO that the “name on it was Evilstick,” and that should have been a tip-off. Allen argued the toy was placed on a rack adjacent to Barbie knockoffs and other kids' items.

Matt Clark, a freelance writer and Dayton resident, didn’t quite buy Moustafa's explanation either. Clark caught mention of the Evilstick via WHIO’s coverage and decided to see it for himself. “I knew where the Dollar Store was and basically made up my mind to go try to get one,” he tells Mental Floss.

Entering the store, Clark encountered Moustafa and asked where the toy was. “He seemed to know exactly what I was talking about and pointed to the back,” Clark says. There, Clark found a peg full of Evilsticks. Peeling away the foil that obscured the image of the suicidal woman to buyers, he found that not all of them featured the grisly photo. “There was one zombie-type character, but most of them were straight cut-out pictures from manga or anime, pretty cartoony and not scary at all.”

It was an intriguing discovery. The Evilsticks seemed to consist of an assortment of images, with the troubling photo placed at random. Whether or not you got one seemed as though it would be the luck of the draw.

Clark eventually found one bearing the notorious photo, bought it, then went home to make a brief 11-second YouTube video showing off the toy’s light-up feature and cackling laugh. “I actually just made it to show a buddy in Cincinnati,” he says. “I didn’t think it would be shared.”

But it was. The next morning, Clark’s snippet had 100,000 views. That led to a longer video review of the Evilstick that garnered 1.3 million visits. Clark had an otherwise unremarkable YouTube presence; the handful of other videos he made had garnered just a few thousand hits each. But with his introduction to the Evilstick, the internet had found a new obsession.

In the rapidly expanding comments section, Clark and his viewers began exchanging theories about the toy’s origins. They determined the image of the woman taking a knife to her wrists could be traced to a horror photographer named Butcher Ludwig, who posted the image on his website and on Facebook years prior. Taken in 2002, it was part of his “Macabre Muses” series, which depicted a vampire ready to feast on her own blood for sustenance.

“[The model] was about 20 at the time of the photo,” Ludwig tells Mental Floss. “I’m not even sure she knows she’s been so well-known.”

Ludwig did not give permission for his photo to appear on the toy. When he was notified of its existence, he says he was shocked someone had “massacred” his photo. Someone had taken his original image and given the model a pair of demonic eyes. Though it’s protected by copyright, it’s almost certain someone involved in the toy’s production saw his image online and downloaded it without his consent.

But who? Clark and his commenters tried searching to see if the barcode—the only real identifying mark on the Evilstick package—led anywhere. It did. “I tracked it down to a factory in China,” Clark says. “I contacted them through [online wholesaler] Alibaba and they said, yes, they made it. I wanted to see if I could talk to someone involved.”

Clark posted on his YouTube page that he appeared close to solving the mystery. People waited. He suddenly went quiet and never made another video again.

 

Quickly, speculation turned to the possibility of the Evilstick being a cursed object—one that had punished Clark for his curiosity. His last message, which mentioned he had things nearly figured out, resembled the words of someone who had flown too close to powers he couldn’t understand.

The reality was a little bit more mundane. “People were saying I had been killed by the curse of the Evilstick and that’s why I never made another video,” he says. “I found that hilarious, and it kind of made me not want to do anything more.”

The Chinese factory—Clark doesn’t recall the name—stopped responding to his emails asking for clarification, and the trail went cold. The alternative speculation was that it actually wasn’t a knockoff item at all but a deliberate act of product tampering. Like the poisoned Halloween candy legends of years past, it was conceivable that someone planted a gory image in a young child’s toy to be a nuisance or maybe to spin a new urban legend. After all, Allen and Clark were the only two documented people to have purchased the spookiest variant of the Evilstick.

A look at the image hidden in the Evilstick
Mike Mozart, Flickr // CC BY 2.0 // Model photo courtesy of Butcher Ludwig

But that doesn’t explain Justin Sevakis. The commercial home video producer had actually uncovered an Evilstick back in 2008, six years before the Dayton discovery. Sevakis was living in New York City at the time and came across the toy while shopping with a friend. Highly familiar with the anime industry—his company, MediaOCD, compiles Japanese-language series for U.S. releases—he recognized Cardcaptor Sakura on the packaging immediately.

“It’s actually a very well-known property,” Sevakis tells Mental Floss. “There was an American dub of the cartoon called Cardcaptors that aired on Fox Kids.” Taking the toy home, it sat in his living room, a perfect blend of Japanese anime iconography and a highly misguided sense of appropriateness. To Sevakis, there was nothing exceptionally sinister about the Evilstick. It was yet another consequence of bootleg manufacturing and a lack of attention to detail.

“Dollar stores are drenched in bootleg anime stuff,” he says. “Sailor Moon, Gundam.” While the gory photo was unusual, a cobbled-together knockoff was part and parcel of the counterfeit trade. “It even had a cheap feel,” Sevakis says. “Like you’d been handling fireworks.”

Sevakis’s earlier excavation of the Evilstick means aftermarket tampering is unlikely. The fact that so few people have come across the wand with Ludwig’s image means it probably appeared in just a small selection of the stock. Yet someone still went through the trouble of altering Ludwig’s photo to be even more upsetting. And while Moustafa was correct in that it was transparently named an “Evilstick,” nothing else about the toy or its material communicated it was a horror-themed novelty. It seemed calculated to disarm parents or children until it was taken home: In order for the sound and light to work, a tab protecting the battery had to be pulled first—a task most people wouldn’t bother with until after it was purchased.

Clark has since lost track of whom he was communicating with back in 2014. Ludwig, too, says he was able to locate the company via the barcode and exchanged emails with someone who said they could do nothing about his intellectual property rights complaint. Today, the barcode doesn’t appear to trigger any company of origin. The Evilstick seemed to swoop in, terrorize a small group of children, and then disappear without a trace.

Sevakis no longer has one. Clark rebuffed several offers to buy his before “renting” it out to an episode of the syndicated series The Doctors, which was eager to report on the morbid toy. He subsequently sold it to a buyer in Canada. “Obviously,” he says, “she’s been cursed, too.”

When Bloodthirsty Batman Readers Voted to Kill Off Robin

DC Comics
DC Comics

Denny O’Neil kept thinking about Larry the Lobster. O’Neil, who served as the group editor of the Batman family of comic book titles for DC Comics in the 1980s, was at a writer’s retreat in upstate New York in 1988 when he and other staffers began discussing the best way to address growing reader dissent with the current incarnation of Robin. Batman’s newest sidekick—a street urchin named Jason Todd—was sullen and moody, a sharp contrast to the gleeful energy of former ward Dick Grayson. Fans called him whiny and petulant. Measures needed to be taken.

During the conversation, O’Neil suddenly remembered a 1982 skit from Saturday Night Live in which cast member Eddie Murphy threatened to boil a lobster named Larry on air unless viewers phoned in and begged for clemency. Or, Murphy told them, they could dial a separate 900 number to cast a vote for his death. The following week, Murphy announced the lobster had earned a stay of execution. He ate it anyway.

O’Neil wondered if the same gimmick could be applied to comics. If fans hated Robin so much, O’Neil thought, then perhaps they should feel culpable for killing him.

 

Death in comics was nothing new. Saddled with decades of continuity and running the risk of repeating themselves, comics writers often turn to tragedy to shake up the status quo. Comic book covers of the 1950s—the clickbait of their time—often hinted at a demise inside, though it was usually a case of misdirection. In 1973, Marvel allowed Spider-Man’s girlfriend, Gwen Stacy, to plummet to her death during a scuffle with the Green Goblin. (In the next issue, the Goblin, a.k.a. Norman Osborn, met his maker.) In the 1980s, one iteration of Captain Marvel succumbed to that most human of weaknesses: cancer.

DC had enlisted the Grim Reaper, too, killing off the Flash and Supergirl during their 1986 Crisis on Infinite Earths crossover that attempted to sort out the publisher’s confusing timelines.

It was the clean slate of Crisis on Infinite Earths that allowed O’Neil to improve upon Jason Todd’s origin story. Originally introduced in Batman #357 (1983) as a trapeze artist whose parents fell to their death, Todd’s background was a virtual carbon copy of Dick Grayson’s, who had first appeared as Robin back in 1940. After more than 40 years as the Dark Knight's sidekick, Grayson came into his own and adopted the mantle of Nightwing, another player in the DC Universe. Which left a spot open for a new Robin. Enter Todd who, under O'Neil's supervision, was first discovered trying to liberate a wheel from the Batmobile. Impressed with the kid’s courage, Batman enlisted him to bust a child crime ring. After a bit of superhero training, he became an official costumed sidekick. 

Batman holds an injured Robin in a DC Comics illustration by Jim Aparo
DC Comics

Jim Starlin, who had recently come on board as writer for the main Batman title—and who had killed off Captain Marvel for Marvel—had never particularly liked any version of Robin; he preferred to depict Batman as a troubled loner. While Starlin had advocated for Robin’s demise as far back as 1984, this latest iteration was especially grating to him, as Todd often ignored orders and brooded incessantly. When DC floated the idea of having one of their characters contract HIV, it was Starlin who repeatedly suggested giving Robin the virus.

The publisher didn’t go for that, but O’Neil’s idea to have readers cast their own votes gained momentum within the company. Starlin needed no convincing and wove a four-issue plot, “Death in the Family,” in which Todd discovers his biological mother is alive and working in Ethiopia. He travels to see her, but realizes she has been recruited by the Joker to sell stolen medical supplies. Todd's only choice is to confront the iconic villain—a showdown that sees him beaten nearly to death with a crowbar and left to die in an explosion.

An ad at the conclusion of the issue breathlessly told readers that Robin’s ultimate fate was in their hands. “Robin will die because the Joker wants revenge, but you can prevent it with a telephone call,” it read. Dialing one 900 number cast a vote for his survival; dialing another would help seal his doom. Each call cost 50 cents.

The lines were only open for a 36-hour period on September 16 and 17, 1988. Approximately 10,614 calls were received. Of those, 5271 backed a second chance, while 5343 threw dirt on Todd’s face. Robin would die, executed by a margin of just 72 votes—though that may not have represented 72 people. At least one anti-Robin activist admitted to calling in four times to cement the sidekick's death.

In Batman #428, which hit stands that October, the Dark Knight finds a bloodied Todd in the rubble. (Two endings had been prepared by Starlin and artist Jim Aparo; the winning conclusion was the one rushed to press.) To make matters worse, Batman discovers that the Joker has been named an ambassador to the United Nations by the Ayatollah Khomeini and now has diplomatic immunity.

Starlin got his wish. So did the majority of fans. But DC wasn’t prepared for what happened next.

 

With the mainstream media not quite hip to the fact that death is often not a permanent condition in comics, hundreds of headlines that fall ran with the news that Batman’s perennial sidekick had perished. “Holy Hearse, Batman!” read the Arizona Daily Star. Press calls flooded into DC’s offices. O’Neil gave interviews for three days straight, and was eventually cut off by a concerned DC public relations employee who feared that all the attention was reflecting poorly on the company.

For most of the public, the “Robin’s Dead” notices were scanned without much regard for which Robin died—it was the aloof Todd who had met his maker, not the beloved Dick Grayson. DC’s marketing arm was jolted, as thousands of lunchboxes, shirts, and toys were now doubling as memorials for Batman's deceased sidekick. (For better or worse, Robin was not a part of Tim Burton’s Batman, which was set to arrive in theaters just seven months later.) Starlin later said, perhaps only half-jokingly, that O’Neil took credit for the idea until executives grew annoyed, at which point Starlin became the man who killed the Boy Wonder.

Batman stands in front of the Bat symbol in this book collection illustration
iStock.com/neilkendall

Batman #428 and the other connected issues sold out, with the issues going for $20 to $40 apiece in the collector’s aftermarket. DC would later use the death trope to even greater effect with their 1993 “Death of Superman” saga, selling millions of copies, some of them bagged with a black armband for proper mourning.

Superman returned, of course. So did Todd. He was later revealed as the Red Hood, a Batman nemesis who is slated to appear on the DC Universe streaming series Titans alongside original Robin Dick Grayson. Still, Todd's death seemed to teach O’Neil a lesson about the enduring appeal of comic mythology and the responsibility that goes along with it.

“It changed my mind about what I did for a living,” O'Neil said. “I realized that, no, I am in charge of post-modern folklore. These characters have been around so long and so ubiquitously that they are our modern equivalent of Paul Bunyan and mythic figures of earlier ages.”

Just because it was O'Neil's idea to let fans decide Robin's fate doesn't mean he was in favor of his demise. During the brief window the phone lines were open, O’Neil picked up his phone. He dialed the 900 number in support of saving him.

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