The number of complaints received about cash backs is “holding pretty steady” since the Commerce Commission issued its stern warning about the marketing method in October.
The Commission’s director of fair trading, Adrian Sparrow, says the Commission has received 126 complaints about cash back offers, 45 of them since it issued a warning on 6 October.
In October, Sparrow told RN the Commission had received between 40 and 50 cash back complaints in the previous six months, before it warned potential PC and printer buyers to be cautious of such offers. The Commission had been alerted by consumers to long delays and supposed administrative hiccups in the redemption process for cash back offers on PCs and peripherals.
“Sometimes when we issue a press release there is more activity as people respond,” says Sparrow, “and sometimes there’s a waning in activity as sellers take heed of what we had to say.” However, in the case of cash back offers, the number of consumer complaints has to date more than doubled since the Commission alerted the public, suggesting consumers are getting wise to the dubious merits of cash backs in general.
Anecdotal evidence suggests global redemption rates on cash back offers vary between as little as two and 60 percent, meaning companies profit from such schemes to the tune of millions of dollars as a result of breakages – where consumers fail to mail back coupons, barcodes or receipts for redemption – and slippages, where customers lose or forget to cash the cheque.
Meanwhile, the Commerce Commission says its “industry-wide” investigation into whether the terms and conditions of cash back offers are being met continues.