Special sales offers ‘insincere’: group

CONSUMER WARNING::The Consumers’ Foundation has warned consumers about sales promotions, saying they are just a strategy to entice customers to spend more

By Yang Chiu-ying and Jake Chung  /  Staff reporter, with staff writer

Tue, Nov 13, 2012 - Page 5

The “get NT$100 for every NT$1,000 spent” promotional events recently held by department stores during their anniversary sales period have been criticized by the Consumers’ Foundation as “fishing” and “insincere.”

“No matter what methods they use, coupons, gift certificates, or other certificates, the ‘spend NT$1,000, get NT$100 back’ scheme is very complicated. They have many ways to dazzle consumers, but the preconditions for receiving the coupons either causes the customer to forget to cash the coupon in, or give up due to the sheer number of people lining up,” foundation board member Hwang Yu-sheng (黃鈺生) said.

“In the end, the customers don’t get to enjoy their purchases, and the department stores are in effect being insincere,” Hwang said, adding that if the stores were sincere in their offers, they would let customers use the coupons on the spot or exchange them for cash.

Foundation deputy chairman Lu Yun (陸雲) said that although it appeared that the department stores were offering discounts, in truth the promotion was just a sales strategy to entice consumer to return and purchase more items.

Consumers should be smart and stick to a shopping budget during the sales period, Lu said.

Miao Yen-mei (苗延梅), a senior assistant vice president at the Taimall shopping center in Taoyuan County, acknowledged that giving out coupons and vouchers was a sales strategy, but added that such methods also increased overhead costs.

The stores want to get back the vouchers, Miao said.

Discussing a promotion at the shopping center — which gave shoppers NT$500 for every NT$5,000 purchase — Miao said the average customer bought about 3.8 items.

As such, when customers used the coupons, they would on average end up spending an additional NT$2,5000, Miao said.

The SOGO Pacific Malls’ Fuxing branch and the Zhongxiao branch in Taipei during last year’s sales period gave out vouchers that were worth NT$10 million (US$345,000) for cosmetics purchases.

For this year’s sales, which began last week, SOGO Pacific malls’ Fuxing branch manager Hsu Shu-hsien (許淑賢) said the branch’s “NT$600 for spending NT$6,000” promotion would bring in roughly three times as much revenue as the vouchers cost the store.

According to Hsu’s estimate, the promotion brought the store an additional NT$30 million in revenue last year.

Far East Department Store sales assistant vice president Chuang Chien-hsiang (莊見祥) said that the store had spent NT$80 million on sales promotions, including vouchers, gifts and advertisements.

Far East Department Store’s Banciao branch manager Wang You-jen (王佑仁) added that in the past, stores had greater restrictions on using the vouchers, but in light of the weak economy of recent years they have relaxed such regulations.

Wang said his branch found that purchases made using the vouchers were on average between NT$2,200 and NT$2,800 per item.

Meanwhile, Chou Pao-wen (周寶文), Shinkong Mitsukoshi’s vice assistant president of sales, said that consumers at the store were used to the sales period vouchers and it would not copy other department stores and give out cash instead.

“The vouchers that we give out are almost the equivalent of cash,” Chou said, adding that aside from having to be used within a certain time period, such promotions have nearly no other limitations.