Having done like lots of people do at this time of year. Been shopping.
One of the tactics that electronic product companies are using to seemingly make us buy is this "Cash Back".
Now i don't know about you but personally if i walk into a store to buy a camera or a phone or similar item and it's £300 and then i'm told that if i buy that one i can redeem £50 from the manufacturer. It puts me off the whole thing and i walk away.
What is the point of me spending time filling out a form to reclaim cash that in my view i shouldn't be spending in the first place. Why don't they sell it for £250 and have done with it.
Can any blogger reading this, who has a financial bent please tell me where the logic is of this stupid (in my opinion) trend lies. I cannot understand where the benefits are to either party. I may be just thick but i won't buy a product that does this pitch and so we both lose out.
Well, for starters the store's sales figures show a sale of £300 instead of £250, so that's massaged the books up by 20% for that item. That's handy when the shareholders want to see the balance-books.
ReplyDeleteThen there's the fact that somebody else is making a bit of interest on the £50 until you claim. That's interest that you've lost.
Plus it keeps more money circulating around the economy. I suppose that helps in the battle against inflation.
And there's a chance that it'll help with brand-loyalty - some brands will offer you deals on accessories etc. as an alternative to returning the cash.
In short, it's a way of cooking the books and fleecing you hair-by-hair. That, or you get scalped big-time if, for some reason, you don't bother with the redemption process.
BTW, I've no financial bent, I'm just tight!
Hi BG
DeleteIn the end shareholders are interested in profit and dividends. As they say, 'sales are for the vane, profit for the sane'. Inflation, if affected at all, would tend to rise with increase in money supply and, in any case, the same result would be achieved by the retailer reducing the price by £50 quid or whatever.
It's a crackpot scheme but you have to think that there is some sort of business reasoning behind it. I can't think what it is though! It puts me right off.
Thanks Stef, i appreciate to the point comments. I wonder how Comet have gone to the wall then? But that's another story.
ReplyDeleteIt adds a valid contact name and address for the manufacturer - they then use it for marketing / advertising purposes.
ReplyDeleteI agree, it's messy but it worked for me when I bought my Lumix G3.
Like you, I'd rather just have the £50 off at the point of sale and leave them with my contact details. Saves the faffing.
JJ
Hi JJ,
DeleteWhat worked? What benefit did you personally gain. Shopping is a chore i want over and done with. I don't need added conflicts.
I ended up getting my G3 for £309 when taking into account the £50 I got back from Panasonic (that arrived in about 2 weeks).
ReplyDeleteThe price of the camera varies between £350 - £400 (Jessops, Currys, John Lewis etc).
Although it was a faff I still ended up with a better deal than I would have otherwise.
Interestingly I haven't had any sales / promotional stuff from Panasonic....yet!
I'm a bit like you - when I go shopping it's for something specific. I go in, buy it, and then get out as fast as I can.
Unless it's beer.
JJ
Nice one JJ
DeleteI loathe all kinds of administrative paper work one has to do, so I do not want to generate any more of that stuff! So needless to say, this kind of offers do not please me and exactly like you, I may even choose not to buy.
ReplyDeleteA Finn called Per-Erik Lönnfors wrote a book called Pelastakaa maailma - polttakaa taloustieteen oppikirjat in 1999 (it translates into Save the world - burn all the books on economics). I haven't read the book but I kind of like its title!
Brilliant. Thanks Maria.
DeleteHi Alan
ReplyDeleteIn addition to the other points mentioned, it helps the store's cash-flow. Like you I just want the price at the retailer reduced.
For me to go down this road the product would have to be a really good bargain. Otherwise i walk away. But if it's a bargain price then i don't see any point in this sales tactic.
DeleteThere has to be something in it for me as well as the store and charging me £50 over it's value and then having to claim back what i shouldn't have paid in the first place is potty.
I agree. Completely daft Alan.
DeleteAs a further point, how many people just plain forget or don't bother claiming the cashback. I would guess it's a number > 0 so for every one that doesn't claim it they make £50 more than they would have selling at £250.
ReplyDeleteI would guess that you would have to be well off not to claim back the money. Thanks for the comment David.
DeleteEarlier this year I nearly bought what, as it turns out, would have been a bad choice of camera. Not a bad camera, just a not very well thought out purchase at the time. I intend to write something about this in the future, so anyone looking for a magic cure for insomnia might soon be in luck.
ReplyDeleteAnyway, to get back to the point, this camera started life at around £330 less £35 cashback, dropped pretty quickly to £300 less £35, and then fell in increments as it became less of the latest thing from that particular manufacturer. It's now available for a whisker under £200; straight deal, UK supplier, no cashback.
That just about says it all. Cheers for that.
DeleteWell, this post and the responses so far prompted me to do a bit of research into the phenomenon.
ReplyDeleteI've trawled through many tomes by financial experts, I've read much about the history of spending habits around the world and I've been party to think-tank sessions at various institutions* where matters of such high import are discussed freely and without bias.
The going has been hard, as there was much to get my head around and there's been little time to do so, but at last I have found the reason for this apparent financial tomfoolery.
It's actually an ongoing field-test, designed and implemented to find out if people can be classified according to their buying and spending habits.
Alan, I've been in touch with the folk that analyse the findings. They've fast-tracked your case and have kindly authorised me to confirm to you that your Scottish passport is in the post.
:-) :-) :-)
(* The Anchor, The Sycamores, The Red Lion)
Stef,
ReplyDeleteIt must have been a very wet think tank.
Thanks for the research, i hope you enjoyed it. It certainly made my day considering the week we have had.
They do it all the time with insurance and other stuff too.
ReplyDeleteBloody ridiculous.
I just trawl around T'Internet, until I find the same deal for direct purchase without all the shenanigans.
It strikes me it is a bit like £4.99.
"Listen mate, that's £5.00 init"
Me thinks that most of these marketing buggers think Joe public is stupid.
Big news, chaps, "We Ain't. Well not all of us!" Look at the sales figures.
Mind you, there must be some out there that think it is some sort of mega deal. [ Not you JJ ;-) ].
Right, I'm orf fer a lie down.
I think you are right Andrew. I find it such a frustrating tactic i emphatically won't buy it. I cannot be alone.
ReplyDeleteObviously financial bods are also finding it difficult to understand the logic as none have commented. Says it all.
Enjoy your lie down and all the best to you and the family for 2013.
I was an accountant Alan. I have the same attitude as you to 'cashback' offers. I suppose they may work for some, but I can't get my head around them so I go elsewhere for a similar deal without that unnecessary feature.
ReplyDeleteGood to hear Martin.
ReplyDeleteHappy New Year to you and the family.