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  1. #1
    Senior Member pctek's Avatar
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    Default Interest Free, Cash Back and so on Cons

    My shops finance company recently offered a 6 months interest free deal. First time they have done that.
    Great I thought.
    Until I saw the spreadsheets for it.
    I checked with them to confirm my suspicions and yep I was right.

    Finance companies make their profit from the interest right? So how do you get interest free?

    The shop pays it. Well actually they don't. Like I wouldn't. Because that would kill my profit.

    I was told this is how they all work "It's all smoke and mirrors".
    Put the price up by x amount and offer interest free.

    Don't believe me?
    http://www.stuff.co.nz/4395826a28.html

    Although its illegal to have a different price for cash versus "interest free", like it says, they will often give you discount if you insist. Of course, they will, because its marked up anyway.

    And check out how cash back works.
    Fine if you do pay cash and then apply for your cash back but I bet its another magic trick if you do it on finance.

  2. #2
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    Default Re: Interest Free, Cash Back and so on Cons

    You would be rather naive to think that they are giving something away. I have always tried to purchase with cash and demand a discount of at least 10% on larger items. The interest free has never tempted me.

    If they don't come up with a good deal, then I can always pay by CC and get 1 month interest free at their expense. It also costs them a percentage for the CC instead of paying by cash.

    Another thread mentioned being charged $500 instead of $499.99 on an advertised price. Again, I pay by CC and pay the exact amount and also costing them a % loss on the CC sale instead of cash or EFTPOS.

  3. #3
    I said WHAT... dolby digital's Avatar
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    Default Re: Interest Free, Cash Back and so on Cons

    Quote Originally Posted by pctek View Post
    My shops finance company recently offered a 6 months interest free deal. First time they have done that.
    Great I thought.
    Until I saw the spreadsheets for it.
    I checked with them to confirm my suspicions and yep I was right.

    Finance companies make their profit from the interest right? So how do you get interest free?

    The shop pays it. Well actually they don't. Like I wouldn't. Because that would kill my profit.

    I was told this is how they all work "It's all smoke and mirrors".
    Put the price up by x amount and offer interest free.

    Don't believe me?
    http://www.stuff.co.nz/4395826a28.html

    Although its illegal to have a different price for cash versus "interest free", like it says, they will often give you discount if you insist. Of course, they will, because its marked up anyway.

    And check out how cash back works.
    Fine if you do pay cash and then apply for your cash back but I bet its another magic trick if you do it on finance.
    How to fool your customers 101.

    I could never work out this cash back business but now I see. What a waste of everyone's time I thought!

    A certain car dealer always offered a minimum of a $3000 trade in. Well if me car is only worth $1500 how does that work? It was rather obvious when you compared the retail prices on the yard. Most were loaded by around $3000. And they are still in business and have been for a number of years

    You would think customers would realise this and go elsewhere.
    No cloud is perfect...

  4. #4
    Senior Member Greven's Avatar
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    Default Re: Interest Free, Cash Back and so on Cons

    Quote Originally Posted by dolby digital View Post
    How to fool your customers 101.

    I could never work out this cash back business but now I see. What a waste of everyone's time I thought!

    A certain car dealer always offered a minimum of a $3000 trade in. Well if me car is only worth $1500 how does that work? It was rather obvious when you compared the retail prices on the yard. Most were loaded by around $3000. And they are still in business and have been for a number of years

    You would think customers would realise this and go elsewhere.
    A lot of car yards do that, so it must work for them.

  5. #5
    Senior Member pctek's Avatar
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    Default Re: Interest Free, Cash Back and so on Cons

    Quote Originally Posted by dolby digital View Post
    How to fool your customers 101.
    Yep. So I didn't bother.

  6. #6
    I said WHAT... dolby digital's Avatar
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    Default Re: Interest Free, Cash Back and so on Cons

    Quote Originally Posted by pctek View Post
    Yep. So I didn't bother.
    You're too honest pc

    I would not do too well in retail. I don't like to be "up-sold" to (unless I am really misguided with my purchase) and therefore that rubs off on my business techniques (or lack of them).

    I suppose thats why I didn't get this current "cash back" offers with computer equipment. Just give the "discount" at the time of purchase, not apply for it later. Actually I presume the odd person doesn't apply for it as they forget or can't be bothered etc etc.
    No cloud is perfect...

  7. #7
    Senior Member pctek's Avatar
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    Default Re: Interest Free, Cash Back and so on Cons

    Well I did have one guy go on about the toaster shops interest free and cheap crap, oh I mean cheap PCs.

    I just pointed out the advantages of him getting something decent from me instead and in the end he did.

    Now he goes on to everyone about how they shouldn't buy a PC from the toaster shops.....LOL

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