The Commerce Commission’s recent warning over cash back offers in computer retailing has cast a shadow over the marketing practice. While major vendors and retailers acknowledge the redemption process can be lengthy, they say complaints have been relatively few.
HP is one vendor that regularly offers cash back deals on its own branded PCs and Compaq models, as well as on printers.
Personal Systems Group marketing manager Warwick Grey says the company has had very few problems with the offers. “Considering how many thousands we do, very few get escalated.”
According to HP’s website, a current HP cashback offer on Compaq Presario notebooks bought with HP or Compaq monitors requires buyers to allow 75 days from verification of the cash back claim to take receipt of the money.
Grey says HP defines in its terms and conditions how long a cash back claim will take. “The printer and PC ones can be different, but we are certainly clear on how long they can be expected to take.”
The vendor’s claims are processed by a third party company, whose service levels are reviewed regularly, says Grey. “They do them as quick as they can – it can be three to six weeks, but we are constantly reviewing their response times.”
Grey believes a key issue is that customers may not understand how long the claims can take, if retailers or resellers have not explained this. “It is really important they take a bit more time to explain that the cash back will take X amount of time.”
Issues also arise if customers are not told to keep copies of receipts, as these can go astray in the mail. “Generally when there are issues, it is when [customers] say they sent it and our company says they didn’t get it.”
An Acer promotion for buyers of one of its Aspire models says up to eight weeks should be allowed for the ordinary mail delivery of the cash back cheque.
Acer country manager Mark Dalton says the vendor requires up to this amount of time to ensure cash backs are not claimed on returned products, and that the cheque can be raised and sent.
Acer gives retailers three weeks to send product return information, which is then cross-checked against cash back claims.
Customers also have to cut the barcode from the product packaging to eliminate the risk of fraud by store staff printing new barcodes and claiming the cash back.
“Nothing we ask people to do is unreasonable, it’s not us being hard or anything,” Dalton says.
Customers are made aware of the conditions of such offers through in-store promotional fliers, while Acer’s website also has the cashback details.
There have been some complaints, but these have typically resulted from customers registering incorrectly and the process not being completed within the allowed registration time, he says.
Any complaints are logged and ‘escalated’ to Acer’s cash back team, he says. “We don’t force [complaints] back to the retailer.”
Epson general manager Greg Skinner agrees with the Commerce Commission that customers should not have to wait several months to receive their cash back.
“I am aware there are other vendors who are taking months to pay back. Our position is that we process all our claims locally and do this every fortnight.”
Skinner says he doesn’t think any Epson claimants have had to wait more than a month, saying the process is seamless if the claim is correctly filed.
The company’s cash back offers place no additional burden on retailers or resellers, as Epson takes care of all claim processes itself, he says. “The benefits of the cash back offers we communicate very strongly to our resellers, but the actual process does not involve our retailers.”
However, Epson does provide retailers with information detailing its claims process to ensure consumers are given accurate advice, says Skinner. “Without any doubt we have good information going through to our channel. Because we do process claims every two weeks, they can tell customers confidently that Epson’s process, compared to some other players in the market, is very quick.”
Skinner says cash back offers are more popular than other marketing campaigns, such as competitions or providing free “value-adds” with a purchase. “I believe that cash backs will continue for the time being, because they are successful. To us, they are an acceptable form of promotion and they have proved popular with consumers.”
JB Hifi general manager Bruce Thierbach says his company has only had one complaint over cash back offers in the six months he has been there. He says it wasn’t an issue the chain was concerned about prior to the Commission’s warning.
However, it has been holding meetings about cash backs with some of its major suppliers.
“We are going to be working very closely with these major manufacturers on these promotional offers. The concern is as a brand and as a retailer, we will get affected by other people promising certain things and we’re definitely addressing that. We’re looking at how the process can be made a bit more efficient.”
Thierbach says his personal opinion is the cash back process can take a bit too long.
He says JB Hifi customers get details about cash back offers at the point of sale.
Reseller News also sought comment from Dick Smith Electronics and Toshiba, but this was not received prior to deadline.