Consumers: approach cash back offers with caution

Consumers urged to approach cash back offers with caution

The Commerce Commission is urging consumers looking to purchase personal computers and printers to be cautious of cash back offers.

A cash back is an offer made by a manufacturer to pay back some of the purchase price for a product once certain conditions are met by the consumer. Cash back offers are becoming increasingly prevalent in the New Zealand retailing industry, particularly in the sale of computers and printers made by respected manufacturers through a number of large retail chains.

The Commission has received a significant number of complaints from consumers who have had a lot of difficulty receiving the promised cash back. In most cases, consumers have received the cash back, but this has often occurred only many months after the consumer has made the claim.

The Commission's Director of Fair Trading, Adrian Sparrow said, "We can see a pattern developing in computer retail where consumers are enticed by cash back offers but then find that the terms and conditions of the offer force them to jump through hoops and wait months to receive the full cash back amount. Consumers, influenced by the advertised cash back offers, appear to believe the redemption process will be a relatively simple one, which is often not the case."

"While we haven't yet detected any breaches of the Fair Trading Act, we are cautioning retailers selling computers and computer manufacturers that they are pushing the boundaries, and if we do detect a breach we will take enforcement action," said Mr Sparrow.

"In the meantime, consumers influenced by the cash back offer must be conscious of the terms and conditions of the offer and should consider the package as a whole when making a purchasing decision," said Mr Sparrow.

Mr Sparrow said there is also a message for retailers using these cash back promotions. "The Commission has found that a number of retailers have denied responsibility for the problems that consumers are experiencing with cash back claims, on the basis that the offer is made by the manufacturer. The Commission considers that it is simply not good enough for retailers to distance themselves when consumers have problems getting the offers honoured. If retailers are using the manufacturer's cash back offer as an inducement to buy computers in their shops, and probably selling a higher volume because of the cash back offer, then they have a responsibility to ensure consumers receive the cash back."

ENDS

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