Why eCOST Sucks

As always, Black Friday brings all the shady web retailers into the spotlight for a day as they each try to vie for cheaper deals on TV’s, Hard Drives, Flash Drives, Computers and Monitors.  I decided to entirely skip my annual pilgrimage to Staples for cheap hard drives, as they were more expensive than the standard online prices by a long shot!

I was looking around for online deals this morning, and ran across the eCOST hot sheet in my inbox.  I immediately saw a 500GB eSATA drive for $39 after rebate, a free 8GB flash drive and a cheap 16GB drive.

The 500GB was a VOX drive, regular price of $79, with $40 in mail-ins.  Seems reasonable enough.

I decide that it’s a great deal, add it to cart and then think about checking on the rebates:

First Rebate

First Rebate

Second Rebate

Second Rebate

So I start reading through their rebate terms, and I first run into “Purchase must have been made between 11/27/08 and 11/28/08 firsthundred customer” – then I find “Only the first 200 customers purchase EXSA-35C-500G7K on 11/27/08 to 11/28/08 are eligible to redeem this rebate”.  So I decide to call them and figure it out.

I called up their customer service, which, to their credit answered in about a minute with no hold.  I also got a guy who actually speaks English, so they’re ahead when compared to any normal retailer customer service already – however I asked him about the rebates.  He checks it on his computer – “Hello sir, we have 618 of that item left”.  So I again asked him about the rebate and whether they were metering product sales or if they were just selling products.  He said they sell until the stock runs out.

So we have at least 618 hard drives they will probably sell, at $79.00 each, with 200 getting $40 off.  The manufacturer eats $8000 in profits, yet will profit by $16,720 on the remaining 418 drives.  I can’t imagine that eCOST only had 618 HDD’s to start the day, I would imagine they buy in larger units than that.

Of course, you also have to consider that “. . . for the typical rebate sizes that you see, the [actual rebates submitted] range is from, two per cent to about 50 per cent.” ( http://www.cbc.ca/consumers/market/files/money/rebates/marketing.html ).

So now if you take the first 200 people who purchased this HDD, and only 50% who are eligible will actually fill out and return the rebate.  Now you further have disqualify people who purchased more than one or are ineligible for other reasons and you have that $8000 in loses chewed back down to <$4000, not a bad racket.

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