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Internet Newegg's Scrambled Cyber Monday Promotion
Brandon Hill (Blog) - November 29, 2007 12:20 PM
Print E-mail del.icio.us 79 comment(s) - last by Kenenniah.. on Dec 7 at 2:45 PM

Newegg newsletter showing the 20% cash back promotion ending on 11/28  (Source: vois2, EggXpert Forums)

The same banner a few hours later reflecting the ended promotion
Newegg's massive promotion leaves customers confused, angry

Newegg generally has a good reputation with the technology community. The company rose to prominence around the turn of the century for its lightning-quick FedEx Super Saver shipping and its excellent customer support.

Over the past few years, the company has done much to maintain its reputation with enthusiasts and still manages to hold on to a Reseller Rating of 9.90.

However, Newegg has found itself embroiled in a testy dispute over a promotion it offered on Cyber Monday. The promotion was held in conjunction than with everyone's favorite whipping boy: PayPal.

On Monday, Newegg offered a promotion where customers who purchased merchandise from the site using PayPal would receive 20 percent cash back. The promotion was to start on Monday, November 26 and end on November 28. Under the terms of the promotion, Newegg stated that "The cash back payment will be deposited into your PayPal account by January 31, 2008."

According to Newegg's terms and conditions for the promotion, the 20 percent cash back was limited to a maximum of $50 USD. No other limits were stipulated for the promotion.

A previous promotion that Newegg and PayPal sponsored together in April offered the following wording in the terms and conditions:

Discounted prices and/or promo codes are valid till 04/15/2007 or until 500 orders per corresponding product has been reached; whichever comes first. Once end date is reached or redemption limit has been met discounted prices and/or promo codes will no longer be valid. After this date and/or redemption limit, standard prices will resume and are subject to change without notice.

Monday's promotion contained no such wording.

Shortly after the promotion started, buyers started asking questions on Newegg's EggXpert forum to clarify if the 20 percent discount would apply to all purchases made on the site. One poster, andydepr, used Newegg's online chat to talk to a representative.

"The promotion would only apply to the specific items shown on [the] email," replied Steve, the Newegg online representative.

A Newegg staffer by the name of RoddyR asked posters on the EggXpert forums to bear with him as he received confirmation from higher ups. "I’m waiting for a confirmation email from another department. Looks like this promo might be for ALL ITEMS on Newegg.com. I’ll have an update for you shortly," added RoddyR.

RoddyR returned within ten minutes to report, "Confirmed ... PayPal promo good for all items on Newegg."

So all is well, right? Wrong. About two and a half hours after RoddyR gave the go ahead for customers to go crazy with purchases using PayPal, he came back with the following nugget of information: "The promotional funds that PayPal allotted for Newegg has been depleted due to the large amount of traffic today. The promotion has now ended."

And thus the mass confusion began. Customers began inquiring if their order made the cut and if they would be receiving their 20 percent PayPal bonus.

"Please kindly note that we have been informed by PayPal at noon that the promotion has been ended since the money they used to run this promotion has been depleted," said Newegg online representative Venson to a customer. "In addition, we [don’t] know the exact order number is the ending of the promotion. For more information, please call PayPal at 1-402-935-2050."

At this point in time, the original banners advertising the 20 percent promotion were still proudly displayed on Newegg's site and within the email newsletter.

Another online specialist, Coco, added the following: "I do apologize that promotion has ended. It is no longer valid. PayPal provided us with a set dollar amount, and once that amount was reached, the promotion ended. Under the Terms and Conditions it also states Offer was available for a limited time only."

The website was altered to reflect that the promotion "Expires 11/26/2007" later in the afternoon and the banner in the original email newsletter sent to customers was also changed to reflect the termination of the program.

Newegg sent out the following email to customers who inquired about the ended promotion:

Dear valued customer,

Thank you for your inquiry about our PayPal promotion.

Unfortunately, the promotion has ended before noon on 11/26/2007. This promotion was sponsored by PayPal which a set amount of funds were provided for the promotion, and all orders must be placed while supplies lasts. Please know that the cash back is not provided through Newegg, nor does Newegg have any control over the promotion.

We are currently working with PayPal to see if a list could be provided for all of the orders that qualified and was placed in time for the promotion. If you are not sure if your order was qualified or not, please contact us within a few days for more information. We do apologize for any inconvenience this may have caused you.

Please feel free to contact us for any further questions or concerns.

Sincerely,

xxxx xxx

Customer Service from Newegg 

So it appears that Newegg is working hard with PayPal to determine who actually made the cut-off point for the promotion before it abruptly ended.

The thread over at the EggXpert forum with confused, angry and information-seeking Newegg customers and conflicting information from Newegg employees can be found here. It is also in this thread where an EggXpert moderator, Jason, posted the following.

"As Roddy said, we will definitely keep you posted once the final results are in. Meanwhile, please don't forget to PM with your Newegg login (email) and I will be happy to send you a free Newegg.com gift. I apologize for not being able to respond to everyone's inquiries via PM, however, I will send you a free gift if I get your login"

So it appears that the least that Cyber Monday Newegg customers will get is a free gift from Newegg (in addition to the original orders). However, most are simply looking for their 20 percent cash back from PayPal.

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Sounds Shady
By pauldovi on 11/29/2007 1:29:21 PM , Rating: 5
If you made a purchase using Paypal while those banners were displaying the advertisement, you should be entitled to that discount. Or if your purchase was directed by those banners (a.k.a you saw the banners at 12PM, surfed the site until 12:30 and bought something, yet the promotion ended at 12:24PM) you should be entitled to the discount.

Shame on Newegg. Such a short promotion duration with massive advertising is a major screw up. They need to eat this one.




RE: Sounds Shady
By MrTeal on 11/29/2007 1:35:18 PM , Rating: 4
It is shady. I am most definitely not an expert on the law in case, but if a company announces a time or quantity limited sale, after which the price goes back up, they should be required to inform you that the sale is over.


RE: Sounds Shady
By idconstruct on 11/29/2007 5:35:01 PM , Rating: 1
It's not newegg's fault, Paypal has this promotion going on with many e-tailers (such as eastbay, for whom I work part time)... not only that but I beleive the discount does not apply to payments made with a debit card as the primary payment method....

Blame PayPal... not Newegg

(Although PayPal is otherwise very useful and I will continue to use it personally)


RE: Sounds Shady
By spluurfg on 11/29/2007 10:37:34 PM , Rating: 2
Blame paypal? Erm, blame whoever put up the advertisements, which were FALSE. That is not legal in this country. The terms said for a specific time period, and curtailing it just because more people are taking advantage of it than you wanted is dishonest. It's even worse than bait and switch, as people are still under the impression that they are entitled to the promotion when purchasing, even when having carefully read the terms.


RE: Sounds Shady
By idconstruct on 11/29/2007 10:52:54 PM , Rating: 3
It's not Newegg's fault PayPal discontinued the promotion... the funds for the promotion came from Paypal, not Newegg. The discontinuation was a direct result of Paypal, and there was nothing Newegg could have done (except possibly changing the ads a little quicker, but it seems Newegg was in the dark for a while as well)


RE: Sounds Shady
By Shoal07 on 11/30/2007 7:25:35 AM , Rating: 3
quote:
That is not legal in this country.


quote:
If you made a purchase using Paypal while those banners were displaying the advertisement, you should be entitled to that discount. Or if your purchase was directed by those banners (a.k.a you saw the banners at 12PM, surfed the site until 12:30 and bought something, yet the promotion ended at 12:24PM) you should be entitled to the discount.


The second quote is pretty close to the legal principle. Let's use this as our example and break it down.

Newegg/Paypal, starting on 6am 26 Nov (just guessing), advertises 20% rebate until 28 Nov.

Newegg/Paypal then discontinues said advertisement & offer at Noon, 26 Nov.

Is this legal? Yes, as long as Newegg/Paypal distrubutes the change in the same manner they advertised (i.e. via the website advertisement) they can discontinue the ad. However, it sounds like they were a bit slow getting the word out.

So, who is entitiled to reperations, if anyone? Any person who:

-"made a reasonable effort" to purchase an item due to this promotion
-believing they'd receive the 20%
-prior to the notification by newegg the offer has ended in the same manner it was advertised

is legally entitiled to that cash rebate and could sue Newegg/Paypal on the grounds that Newegg/Paypal are in breach of contract. If the cap really was $50, it's not likely worth the suit, unless it is big enough to be a class action.


RE: Sounds Shady
By TSS on 12/1/2007 8:18:50 PM , Rating: 2
i'm more leaning towards it's nobody's fault. they had a budget for an promotion and thought that the budgets matched about the amount of trafic they where getting.

though i figure where it went wrong, was the point where the consumers learned it wasn't a limited promotional offer but 20% off EVERYTHING. that's a big lure. afterall, with 20% off i'd buy something like a 5000$ TV, get it for 4000$, they have to cough up 1000 bucks. for everybody that does that.

with everybody buying everything they had planned on at once, it just became too expensive too quickly. but they hardly can put up a banner that says "ebay gave us $100,000 for a promotion, while it lasts, 20% off everything". because that causes even more confusion about when it's over.

most of it's based on speculating human behaviour. they just speculated wrong here.


RE: Sounds Shady
By afkrotch on 12/3/2007 4:05:49 PM , Rating: 2
Except for the fact that the maximum cash back was $50. So really, you'd only a $5000 TV for $4950. I'd much rather have free shipping.


RE: Sounds Shady
By FITCamaro on 11/29/2007 1:44:17 PM , Rating: 5
Sounds like typical PayPal to me. I don't use their crappy service. I've met people who've had their accounts frozen by Paypal due to a dispute. Its in their ToS that they can. So don't ever attach your primary bank account to Paypal.

And I don't blame Newegg for this problem. Still the best site to get computer parts 99% of the time. Every now and then you'll find a better deal but not often. About the only thing I don't like with Newegg is that they use UPS shipping now. Was so much better when their cheapest option was FedEx. Could actually get your parts on a Saturday with them.


RE: Sounds Shady
By RaisedinUS on 12/6/2007 6:04:43 PM , Rating: 2
"Sounds like typical PayPal to me. I don't use their crappy service. I've met people who've had their accounts frozen by Paypal due to a dispute. Its in their ToS that they can. So don't ever attach your primary bank account to Paypal."
And it can get worse. Paypal isn't all that great unless you use it for ebay. Even then, it's not that great for the buyer, but they sure stand behind the seller right or wrong.


RE: Sounds Shady
By Screwballl on 11/29/2007 1:47:02 PM , Rating: 5
No, this is shame on PayPal for not disclosing these terms earlier and requiring Newegg to post these terms clearly.

This is yet another reason how PayPal is screwing people daily and why I refuse to use them anymore. Unfortunately in this case Newegg is catching all the flak when it was PayPal's doing in the first place.

Knowing Newegg, I am curious if they can track the order numbers correlating to the time the order was placed and if it was by 12:30 or 12:45 then they may refund the 20% themselves. This is what makes Newegg stand out, they are willing to work with the customer many times when they are not even to blame.

This story is nowhere near closing so we will see how it turns out. I hope Newegg puts pressure on PayPal to force the refunds on orders placed before 1PM.


RE: Sounds Shady
By geeg on 11/29/2007 1:51:48 PM , Rating: 5
Shame on PAYPAL not newegg. Newegg chooses to lose money rather than losing customers. If you trust my 5+ years big experience, paypal does the opposite.


RE: Sounds Shady
By clovell on 11/29/2007 2:22:26 PM , Rating: 4
Nah, it's Newegg's site and Newegg's customers - the buck stops there. If they want to go after PayPal later, more power to 'em, but for now, Newegg needs to make it right.


RE: Sounds Shady
By Lord 666 on 11/29/2007 2:50:43 PM , Rating: 2
It wasn't just Newegg that had these ads going. Wolfcamera, Ritzcamera, and Buydig had them for 11/26.

Sure Newegg is much more popular than those camera sites, but it is Paypal's fault. Their marketing team allocated a certain dollar value based on previous sales figures and they estimated incorrectly. No where did the banners say 12pm as the cutoff.

Newegg has ALWAYS done the right thing and bent over backwards for keeping up their excellent reputation. Newegg should go after Paypal.


RE: Sounds Shady
By marvdmartian on 11/29/2007 4:26:43 PM , Rating: 5
I've used Paypal for 8+ years, and Newegg for 7+ years. While Newegg has almost always bent over backwards in dealing with their customers, I think they screwed the pooch with this one.
First off, they should've had some sort of idea of how much money that PP was going to dedicate toward this thing, as well as how big of a deal it was going to be to their customers. If PayPal wasn't willing to put forth a sufficient amount of cash toward's Newegg's part of the sale, then Newegg should've just said NO. How much you wanna bet that some of those other online retailers will run the complete length of this promo, and not get 1/10th the sales that Newegg got in just a few hours?? Newegg was easily the most likely to contribute to this promotion, and should've been given the greatest proportion of the funding toward it, no questions asked.
Instead, they're left with unhappy, dissatisfied customers. Not just the ones wondering whether their purchases made the cutoff or not, but those that just didn't have the time or ability to hit the sale first thing that morning. Trust me, Paypal doesn't care a whit if Newegg's customers are pissed off or not, as they already got a big chunk of cash that they can now invest heavily for the next two months, courtesy of Newegg.

I'm a supporter of Newegg, for the most part, but think they need to do one of two things here:
1. Encourage everyone who placed an order on Monday to cancel it NOW, receive a refund via Paypal, incur no fees for the cancellation (or return of the item if the purchase has already shipped), and then offer all their customers an across the board 10% discount, by invitation only, for a limited amount of time, no Paypal payment required. That will screw Paypal out of their money, and bring good faith back to Newegg.
------or------
2. Offer anyone on their e-mail distribution list a one time use 20% coupon, with the following exceptions. If you already snuck in under the cutoff for the Paypal deal, you don't get it, it's only good for ONE item, and that item should fall under a specific dollar figure (let's face it, we don't want to bankrupt Newegg by having a bunch of clowns order $2000 HDTV's, and expect 20% off of them!).

The saddest part of all this hullabaloo is that I learned of the 20% deal online, at Ben's Bargains. The e-mail that was sent out (by Paypal, I believe) didn't hit my inbox until that evening (good timing, eh?). I also have an issue with Newegg jacking up their price on items while they're out of stock, but that's not part of this, so it's all I'll say about it now.


RE: Sounds Shady
By Spivonious on 11/29/2007 1:51:59 PM , Rating: 2
Did anyone read the terms and conditions? I'm curious if it mentioned anything about a limit.


RE: Sounds Shady
By Chubbbs on 11/29/2007 2:15:50 PM , Rating: 5
Consider this situation from the perspective of the horror that is mail-in rebates. All of these promotions should be made illegal. Businesses obviously cannot be trusted to refund money that they've already collected, and consumers often don't have the resources to seek remedy through the legal system.

Something is wrong when retailers and vendors are offering big rebate promotions, sometimes for the vast majority of the purchase price. These programs work by screwing a certain percentage of buyers, and it isn't right.


RE: Sounds Shady
By JonnyDough on 11/29/2007 3:38:57 PM , Rating: 3
Please rate this guy up. I f'n hate rebates. Anyone else?