In the eternal tug-of-war between the consumer and the retailer, the latter has two very effective weapons.
The first is inertia – the tendency of all of us to let things continue as they are. It applies to things like gym memberships, streaming subscriptions and magazine subscriptions. This is why there is always a nudge from the retailer to tick the auto-renewal option.
Then there are the ubiquitous gift cards, vouchers for spa treatments, or weekends at luxurious resorts. I often wonder how many of these end up unused in someone’s “must get around to” folder.
The other weapon is complexity – private health funds and electricity retailers have got this down to a fine art.
Just before Christmas I received my annual private health insurance premium and decided to see what else was on the market. After a day of research I gave up and opted to stay with the provider I already had.
The next week the electricity contract came up for renewal and once again I made the effort to do the research.
Then, armed with what I thought was a good knowledge of the electricity industry, I called my provider to negotiate my new contract.
It was then I found that while the discount offers vary between companies, some of those that offer a big discount charge a higher rate per kilowatt hour. Once again, I gave up.
Last week my wife and I were browsing in Harvey Norman and were attracted by a handsome new Nespresso machine by Breville. It looked great, but what sealed the deal was the $80 cashback offer. Given the retail price of $199 it was irresistible. But you guessed it – there was a catch. They don’t simply deduct the $80 from the purchase price; you have to go online to apply for it. The sales assistant assured us that was quite simple.
The first challenge was finding the website to request the refund. We tried Breville and initially it did look promising. The problem was we had to find our new machine from the list shown and quote the “promotion code”. We could find neither.
So we phoned Harvey Norman and spoke to an assistant who said that she had just spent over an hour on the phone helping another customer sort it out. She promised to talk to her manager and ring us back.
This she duly did, which eventually led us to the Nespresso Promotion site, where we could enter all our details to apply for the refund.
There was just one further challenge – we were required to download a photo of the docket as part of the application process. I duly took the photograph and emailed it to myself, but this created a file with the extension .rtfd. When I tried to upload that the system would not accept it: the file, it now revealed, must be a .jpg or a .pdf.
Fortunately, I remembered that my iPad has a scanner, which enabled me to scan the invoice and email it to myself as a PDF document. Just three hours after I started the process I was excited to discover that I’ve finally submitted the application for the $80 cashback promotion. That’s the lowest hourly rate I’ve earned for many years!
I found the whole process extremely frustrating and time-consuming.
I also wonder how a person who was not particularly au fait with technology would have been able to cope.
I would love to know how many cashbacks are actually claimed – I reckon most consumers would give up after the first frustrating hour.
- Noel Whittaker (firstname.lastname@example.org) is the author of Making Money Made Simple and numerous other books on personal finance.