🚀 go-pugleaf

[trimmed misc.forsale.computers.memory from newsgroups, added
misc.consumers]

In article <6ojsbk$2o7$1@nnrp1.dejanews.com>, ablang@post1.com writes...
> Here is the story Teri Aitkins was working on to expose the evil CompUSA
> mail-in rebate program:
> 
> 
> Hi all...
>         Okay, it finally made air!  The CompUSA story we've been working
> on for months now, has finally been show on the SF Bay Area NBC station!
> Thanks to all, especially to John Buen for bringing to our attention,
> Ron Ablang, for posting it on dejanews and forwarding email to me, and
> Mark Welch & Marc Katz for agreeing to our on-camera interview.  We hope
> it'll help others who are having problems, and that it'll also help
> consumers who are considering buying a product that offers a rebate.
> I'm also emailing the following script to my friend at Dateline NBC, in
> hopes that the problem will get national attention!  Thank you all again
> for all your help and for your patience!!
>                                         Teri Aitkins
>                                         Producer, KRON-TV
>                                         1001 Van Ness Avenue
>                                         San Francisco, CA  94109
>                                         aitkins @ kron.com


[script snipped]


Reading over that piece, there were 2 things that bothered me.

First of all, the assumption that companies weren't "out to get" the
consumer.  Why should that assumption be made?  What they failed to 
mention is that Iomega was recently forced to pay a multimillion 
dollar class-action settlement due to not making good on rebate 
offers.

Secondly, the assumption that the reason for the surge in popularity
in rebates is because it's "an attempt to make their prices more
competitive" and to gather marketing information is in my view just
poorly supported speculation.

The easiest way to make a price "competitive" is simply to LOWER it.
All manufacturers and retailers want to have attractive prices, the
question is, how do you do it and maintain your profit margin?

The answer is offer a rebate instead of a price-reduction because 
it doesn't take a rocket-scientist to figure out that only a small 
fraction of the actual purchases will actually have rebate claims
submitted.  Therefore the vendor and retailer gets the marketing
message of "Cheap" but the manufacturer doesn't have to lose as 
much profit as the "discount" (and I use that term loosely) would
imply.

E.G. if a normally $100 item is discounted 30 "real dollars" the
manufacturer loses $30 right off the top in profit on each item.
If the same item is marketed with a $30 rebate, and only 10% of
the purchasers submit a rebate claim (or 50% submit claims and
the vendor comes up with some way to invalidate the other 40%),
the manufacturer in effect only loses THREE dollars per unit 
due to all the unclaimed rebates.

The idea that the manufacturers "don't plan on how many responses"
they're going to get is pretty ridiculous too.  They know d*mn 
well how many units they sell, don't they?  If they're so 
pathetically useless at making a simple estimate such as that, 
I'd find it amazing that they'd have a fraction of the skill 
necessary to manufacture a computer item in the first place.  
And such is life with a rebate program - unlike a simple 
wholesale price reduction, you never really know who's going 
to take advantage of it.  But of course, if you don't provide
for full usage, it's like a bank that doesn't have enough cash
on hand to cash checks.

Bottom line, I view the piece as a lukewarm consumer message, 
throwing responsibility into the hands of the purchasers, and 
further sullied by heavy apologizing for highly-questionable 
industry practices.

It's about time these rebate scams are exposed, and while this
is an OK start, there needs to be a far more hard-hitting 
attitude if there is going to be much benefit to the consumer, 
IMHO.



Phil

-- 
Philip J. Koenig             Computers & Communications             [see below]

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