You Get What You Pay For

A quick follow-up to my post on third-party marketing partnerships:

Apparently several Portland-area businesses were taken in by the free-gas scam from Florida. The short version is that the Florida company sold vouchers that were supposedly redeemable for rebates on gas purchases. In turn, they gave out these vouchers to customers as part of a gift-with-purchase promotion.

By all accounts, the local businesses were not intending to deceive anyone — they thought this was an on-the-level promotion. But the most fascinating point of view was from Jeff Garcia of Fidelis Marketing. Garcia purchased the vouchers — paying $10 for each $100 voucher — and then re-sold them to a couple of car dealerships.

Garcia said that while the deal sounds fishy — $100 cards for $10 each — it’s a common marketing equation. Like others, he said, the deal had enough hoops to clear that it’s assumed not everyone would follow through, meaning it was still possible to make a profit.

Which brings up an interesting question. Let’s assume, for the purposes of this exercise, that this wasn’t a scam, and that the company on the other end was willing and able to redeem the certificates.

If you make an offer to your customers that contains so many “hoops to clear” that many either can’t or won’t take advantage of it… how do your customers now view you? What will they tell their friends about your business? What will they post on internet message boards and forums?

What’s your word-of-mouth worth?


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4 thoughts on “You Get What You Pay For

  1. We were looking for a coffee grinder a few months back – Linens n Things (when it still was) had sold out; we went to Kitchen Kaboodle and asked them to sell us the same model/color for the same low price: This was their stated policy. After a 30-minute wait, we were told we could only get the $10 savings IF Linens ‘n Things had the unit in stock…we bought the coffee grinder at Starbucks.

  2. Gift cards, rebates and vouchers are all kind of a scam in my opinion. They are all designed with a certain failure rate. Whether the failure is caused by the recipient losing it in the wash the cost of the voucher to the business is less than the value of cash.

    Gift cards are particularly bad in my opinion. Why people are convinced that buying a gift card to a particular store is better than giving cash that can be used in countless different ways is beyond me. Add to that the limitations and fees that are placed on some gift cards and I’m left scratching my head.