“I’ve been in this business for 32 years, HiFi House for 55,” he said. “I’ve spent these years building credibility, but when a customer can buy a TV on one day, and the next see a $500 price drop, they look at me like we are so disingenuous. All the credibility I’ve built up is gone with one instant rebate. Even though you give people their money back, they look at you a little bit differently because they feel you tried to rip them off.”
As a result of the problems, dealers want vendors to take the burden of the vicious price competition, especially with TVs, off their backs. They want more consistent pricing throughout the sales cycles of products and more selective use of the instant-rebate/scan-down promotions, which dealers say should avoid higher-end models. As of late last year, no change in vendor behavior was expected.
In the meantime, some dealers were instructing their sales floor to steer consumers away from brands and models subject to steep IR discounts. “I’ll sell other stuff,” Robbins said. “Not everybody has instant rebates. If they’re smaller instant rebates, it’s not quite as volatile. I’ll sell that product [as well].”