Big percentage cashback deals, why?

I was looking at a camera deal the other day.

£300 cashback on £1300, so you pay £1300 & then you claim the £300 that goes back on your card. At least that is my understanding.

But why do it like that? Why not just sell it for £1000? The deal in this case was from OM so is it so the shop is bypassed for the hassle and paperwork?

Good way of manipulating your sales figures?

A number of reasons

1) you’ll get an increase in people buying, cos they think it’s a good deal,

2) most people don’t get around to claiming the cashback, so buy at full price

3) a combination of 1 and 2 means double-bubble for the retailer

4) the cashback is probably priced into the offer price anyway.

I assumed it was because the shops already had stock of that model, and had paid the manufacturer for them based on being able to sell them as RRP or near enough.

So if they don’t sell quickly, they pile up on the manufacturer’s shelves, and they can’t force shops to discount them as the shops don’t want to lose money.  So the easiest way round that is to just offer cashback to get stock moving.  Then once the deal’s over reduce the trade price to the shops for new stock.

That or they just made claiming enough of a faff that enough people never bothered.  I’ve had phone deals where the cashback had to be claimed in 3 cheques, by sending in paperwork between certain dates over 2 years.

Manufacturer of said equipment/tech/toy might not allow retailer to sell it for £1000, selling for £1300 with £300 cashback gets round this.

i did this once on a laptop.

I got it – but it convinced me enough to never do it again.

Fortunate i had a job at the time that had enough dead time to chase them down.

Om have done the same deal twice in the last 4 months and it’s precisely because of the perceived hassle that I have not bought it.

The deal was definitely from OM as all shops were doing it. Oh well there’s and my loss.

Annoying though, I still want the camera! Just how much though!

For people buying through companies/self-employed?

A nice bookable receipt for £1300; £300 quid in the back pocket no-one will ever know about.

I bought my camera direct from Canon. The £400 cash back came through easily and promptly.

I also never admitted to the price, just kept repeating £400 cashback each time I was asked.

Probably doesn’t crash second hand values either.

Probably doesn’t crash second hand values either.

Absolutely correct. Some bizarre pricing with some shops selling second hand above the discounted price whilst the offer was on

All the above is true, but its a US thing driven by public companies too – Revenue numbers are important. If you want to shift the units then you can either discount to retailers who pass that on, but that hits your revenue, or you sell to retailers at the normal price, but offer the rebate. That way you collect the full value of your revenue and write off the rebate as a marketing expense. For whatever reason this keeps the market happy as they’re obsessed about revenue numbers not necessarily profitability.

Some bizarre pricing with some shops selling second hand above the discounted price whilst the offer was on

They know the offer is limited time only, so they don’t faff about with their prices and reduce their profit (significantly) for a temporary offer.

The biggest used dealer are regularly priced higher than bezos supermarket on some lenses.

snotragFull Member
Manufacturer of said equipment/tech/toy might not allow retailer to sell it for £1000, selling for £1300 with £300 cashback gets round this.

Which would be price fixing, and quite naughty

Designed to compete with grey market items.

Whilst keeping the ticket price at local prices.