CompUSA forced to honor rebates.

[Shockeye]

A happy 21st birthday goes out to CompUSA!

CompUSA settles rebate complaint
Friday, March 11, 2005 Posted: 4:17 PM EST (2117 GMT)
 
WASHINGTON (AP) -- CompUSA has agreed to settle a government complaint over how it handles rebates.

The federal government says the Dallas, Texas-based company deceived people who bought computer products, but failed to receive promised rebates from $15 to $100.

The Federal Trade Commission (FTC) ordered CompUSA to overhaul its rebate programs.

The deal announced Friday also requires CompUSA, for the next 20 years, to ensure all manufacturers of products sold in its stores pay rebates promptly.

The FTC's settlement also made CompUSA responsible for unpaid rebates on behalf of one of its manufacturers.

A CompUSA spokesman declined comment.

The settlement requires rebate payments for any eligible consumers that CompU-S-A can identify through its records, and for any eligible buyers who contact CompUSA or the FTC over the next 75 days.

Since I avoid mail-in rebates like the plague, does that fact CompUSA has to honor and unpaid rebates from one of its manufacturers retail industry standard or is this a very heavy-handed judgement?

[Samwise]

In-depth writeup of CompUSA's crooked rebate policies.

[Trippy]

In-depth writeup of CompUSA's crooked rebate policies.

I don't see anything crooked about those policies.

[Samwise]

I'd say it's fairly crooked to list items by their after-rebate price and then invalidate the rebate in the fine print.  I've actually run into that very problem; I bought a bunch of wireless network cards from CompUSA a while ago that were the cheapest ones on the shelf... after the hypothetical rebate.  Thanks to the one-per-household fine print, the actual price ended up being about twice as much as what was listed on the shelf, since I'd bought five items and the listed price only applied to one of them.  Of course, you don't find that out until you get home and start filling out the rebate form.

Good for the FTC, sticking it to them like that.  Assholes.

[Trippy]

I'd say it's fairly crooked to list items by their after-rebate price and then invalidate the rebate in the fine print.  I've actually run into that very problem; I bought a bunch of wireless network cards from CompUSA a while ago that were the cheapest ones on the shelf... after the hypothetical rebate.  Thanks to the one-per-household fine print, the actual price ended up being about twice as much as what was listed on the shelf, since I'd bought five items and the listed price only applied to one of them.  Of course, you don't find that out until you get home and start filling out the rebate form.

Good for the FTC, sticking it to them like that.  Assholes.

Okay maybe I'm just used to it having shopped at places like Fry's Electronics for a long time but have rebates for these sorts of things ever *not* been "limit one per household"?

[Samwise]

Could be.  I generally avoid buying things with rebates because I hate having to fill out crap.

[Murgos]

I avoid buying things with mail in rebates just because the whole premise is a scam and I don't like to reinforce that kind of behavior.  The whole idea of a mail in rebate is that most people are not actually going to fill out the paper work and request the rebate.  I'm sure there is a table somewhere that lists % of rebates requested for units sold and I am sure its favorible to the seller.  Plus there is generally a hassle with trying to return something that you requested a rebate for, usually you can't return it.

[Sobelius]

I avoid buying things with mail in rebates just because the whole premise is a scam and I don't like to reinforce that kind of behavior.  The whole idea of a mail in rebate is that most people are not actually going to fill out the paper work and request the rebate.  I'm sure there is a table somewhere that lists % of rebates requested for units sold and I am sure its favorible to the seller.

Well, the only place I do rebates from is Fry's -- and only because they provide everything I need for the rebate -- the form, the extra receipt copy, etc. right at the moment I purchase. It's one of the only reasons I'll shop there when I go to a brick and mortar.

  Plus there is generally a hassle with trying to return something that you requested a rebate for, usually you can't return it.

This is necessary, otherwise you WILL have people scamming the company by getting both a refund for the item and then the rebate (i.e. free cash). To avoid this, I try to avoid rebates that give me less than 2 weeks from date of purchase to submit. I'll usually know if I need to return something within 2 weeks.

[eldaec]

Single best thing about European sales law ever, and single most annoying thing about buying anything at all in the US ever, is that in Europe the law says if the sticker has a price on it, then that is what you pay to the cashier.

No fucking about with tax, rebates, or any other asstardary. If it is money that you give to the store, you put it on the sticker.

[Samprimary]

Single best thing about European sales law ever, and single most annoying thing about buying anything at all in the US ever, is that in Europe the law says if the sticker has a price on it, then that is what you pay to the cashier.

No fucking about with tax, rebates, or any other asstardary. If it is money that you give to the store, you put it on the sticker.

I like it.

I'm standing here with a cut-out UPC and a rebate form from Comp USA, so I really like it.

[Calantus]

That's always baffled me as well. I remember reading a comic that often dealt with how people would always ask what it was with tax and I couldn't help but wonder why it wasn;t factored in already. If I buy something here, what is listed is what I pay. If it is $100 plus $5 rebate it is listed as $100 with $5 rebate, not $95. Crazy system you guys have.

[Roac]

I couldn't help but wonder why it wasn;t factored in already.

Because the lower price on the sticker encourages people to spend more, since they don't have to stare their choice in the face.  It's the same reason that pricing something $19.95 will sell noticably more units than if you charged $20.00.  And of course, everyone wins with laws being this way (except the consumer); with more purchases there are more sales taxes going to the state, and more sales going to the store.

[UD_Delt]

I avoid buying things with mail in rebates just because the whole premise is a scam and I don't like to reinforce that kind of behavior.  The whole idea of a mail in rebate is that most people are not actually going to fill out the paper work and request the rebate.  I'm sure there is a table somewhere that lists % of rebates requested for units sold and I am sure its favorible to the seller.  Plus there is generally a hassle with trying to return something that you requested a rebate for, usually you can't return it.

I buy things with rebates for just about the exact reasons you mention Murgos. Because it is somewhat of a scam they can offer things cheaper than a normal sale knowing that most people will fail to mail in the rebate. For most computer hardware I've found things to be cheape by using SalesCircular.com and hunting rebates than to buy from a place like NewEgg or some other online retailer. The only exception to that so far is my video card.

I've only ever been denied a rebate once (from Maxtor and Best Buy) and it was a total scam. They claimed I sent the rebate in too late but I keep detailed notes and knew that was not possible. A quick email to customer service and every executive email I could find online for both companies detailing the notes I kept resolved that one REALLY quick. I got the rebate about 3 days later.

Rebates are definately worth while if you are on the ball about them. If you half-ass them then you will get screwed which is the reason the diligent can find the good deals.

[UD_Delt]

Fuck... Nothing like finding a two week old double post... Sorry about that.

[HaemishM]

It's become a pretty common practice among most computer/electronics sellers I've seen in the last few years. Fuck, Dell's doing the exact same thing as Best Buy or CompUSA. List the price AFTER rebates. The slick/crooked part of it is when they limit the rebates to one per household, but don't limit the amount you can purchase. That's asking for the consumer to get screwed, get pissed and the company to then get sued.

I hate the advertising that uses "after rebate" prices as the sticker price. It's intentionally misleading. Not to say I don't take advantage of the rebates when I do purchase, because I'm usually looking for the cheapest price anyway.

[Sky]

No fucking about with tax, rebates, or any other asstardary. If it is money that you give to the store, you put it on the sticker.

I like it, too. It's fun on grocery day, keeping a seperate stack of goods that I'll have to pay tax on, so I can correctly calculate my register total, even without this rebate nonsense. Last week alone I filled out over 20 rebates (I was on vacation, had some free time, heh) from /grocery shopping/. $1 and $2 crap.

One was vaguely insulting: get a few bucks off a twelvie of Killian's Red...if you submit a receipt showing you also bought corned beef. That got me reading more packaging, and I realized Killians isn't even an Irish beer, just cashing in on the Irish part of the brand name. Fuckers. I drank some Guinness instead (with my corned beef).

That said, I did get several hundred bucks off my tv set, so they aren't all bad. Of course, an honest business would just knock the price off at the register, but hey, it is a capitalist nation, after all. Honesty isn't even on the list of priorities of capitalism.

[Krakrok]

I sent this rebate in a few months ago for a DVD burner and finally they sent me two emails on it. I wonder if the FTC thing had anything to do with expedite it.

-----
Your rebate submission for $50.00 for the EPO $50 Rebate at CompUSA has
been received. Please allow 10-12 weeks for processing.
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Your rebate submission in the amount of $50.00 for the EPO $50 Rebate at
CompUSA has been processed. Your check will be mailed shortly. Please
allow 2-3 weeks for completion.
-----

[Calantus]

10-12 weeks to process? 1-2 weeks for completion? Do they pay interest on that money? I'll assume not and thus go on to say that is a bald-faced scam even above the normal rebate scam.

[Shockeye]

Best Buy to End Rebates, Reports Earnings

By Joshua Freed The Associated Press
Published: Apr 1, 2005
   
MINNEAPOLIS (AP) - Best Buy Co., the nation's biggest consumer electronics chain, said Friday its fourth quarter earnings rose thanks to a February sales surge but offered a disappointing forecast for this quarter. It also said it will phase out using mail-in rebates over the next two years, bowing to customer complaints. Its shares fell more than 5 percent.

With mail-in rebates, customers pay a higher price but get money back - sometimes hundreds of dollars - by mailing in copies of receipts and a form.

"Our customers are telling us they just hate the process," General Merchandise Manager Ron Boire said during a conference call to discuss the earnings report.

He described that process as "they send it in, they remain aggravated until they get their check."

The rebates have aggravated regulators, too. Wisconsin consumer protection officials last year looked into the rebates after 89 consumers complained, and Ohio Attorney General Jim Petro sued Best Buy in August in part over complaints about rebates.

Boyer said the phase-out would happen over the next two years, as Best Buy shifts its promotional spending to programs like its "Reward Zone," where customers pay an up-front fee but earn points toward future discounts.

For the three months ending Feb. 26, Best Buy earned $572 million, or $1.69 per share, up from $469 million, or $1.40 per share, a year ago. Excluding a gain on the disposal of its Musicland division, the retailer reported earnings from continuing operations of $522 million, or $1.55 per share. That matched the consensus of analysts surveyed by Thomson First Call.

Revenue was $9.22 billion, up 9 percent from $8.45 billion a year ago and about even with analyst expectations.

The sales surge included growth in low-margin products such as digital music players, movies, and laptop computers.

Best Buy shares fell $2.78, or 5.1 percent, to $51.23 in midday trading on the New York Stock Exchange.

The earnings had been delayed from Wednesday because the company wanted to incorporate a ruling that gave it a $50 million tax benefit on the disposal of its Musicland division.

For the full year, Best Buy reported net income of $984 million, or $2.94, up from $705 million, or $2.13 per share, a year earlier. Revenue rose to $27.43 billion from $24.55 billion reported in 2004.

For the first quarter of fiscal 2006, the company said it expects to earn 27 to 32 cents per share. Analysts were expecting 38 cents per share, minus a nickel per share for stock-based compensation. That would put the high end of Best Buy's guidance a penny below analyst expectations.

For the full year, Best Buy said it expects to earn $2.95 to $3.10 per share.

The company also said it would convert all of its U.S. Best Buy stores to its "customer centricity" model of focusing on certain customer segments within three years - faster than previously planned. Chief executive Brad Anderson said 170 to 220 stores would be opened or converted to that format during fiscal 2006.

Best Buy said it was expanding its customer centricity idea because of strong revenue gains at test stores. Comparable-store sales gains for the fourth quarter were 8.4 percent at the test stores, versus 2.3 percent at other U.S. Best Buy stores. But the conversion squeezed profits at the test stores; Best Buy said it expected that to be temporary.

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On the Net:

Best Buy: http://www.bestbuy.com

AP-ES-04-01-05 1240EST