Print 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 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.


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 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.

Comments     Threshold

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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
That is not legal in this country.

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.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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