Paying cash at retailers

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675 posts

Ultimate Geek

#1121369 3-Sep-2014 19:18

mattwnz:
richms:
mattwnz:
khull: The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford.

Probably does not ring true for people in this forum

You have to question whether this is very moral.

It's legal. Same as to selling a car to someone that will default who will then have it repoed at scrap value washed and put back on the yard for the next customer

Legal though doesn't mean it is morally right. But I believe in karma.

Retailers prefer customers to pay cash(credit cards etc) or to get interest bearing finance. Interest free finance costs the retailers, they effectively pay the interest for the customer (although at a lower rate).

mattwnz

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#1121372 3-Sep-2014 19:24

eXDee:

Retailers like interest free deals because some customers are willing to spend all the way up to their approved limit. Whether or not they can manage to pay this back is up to the person and the finance company - the retailer doesn't have to deal with the aftermath.

The problem is that many people can't help themselves, they see free access to money and borrow up to it. Many NZers (obviously not people on this forum) do lack financial literacy.
The same with buying houses, one reason the house price in Auckland is has risen so much, is because it is based what a two income family can afford to pay based on current interest rates. In the 20th century, it was more based on the what a one income earner family could afford to pay, and interest rates were a lot higher.

LostBoyNZ

583 posts

Ultimate Geek

#1121378 3-Sep-2014 19:29

For some retailers the cost of doing interest free finance is actually... $0. This depends on the company, length of time it's over and such, but stores may actually make more money if you pay with finance than they would if you put it on your credit card.

On the other hand, it takes time, so a cash sale will be quicker and let them move onto other customers faster, to make more money (in theory).

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nathan

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#1121409 3-Sep-2014 21:13

joff_nz:
nathan: If they had morals they wouldn't sell extended warranties

I disagree, I've purchased Extended Warranties which offer me more than CGA, with guaranteed less effort, and sometimes for very little. Yes many EWs are oversold however in my opinion, your statement above is rubbish.

Rubbish?

Sure its less effort than CGA. But many of my friends & relatives have bought EW based on the efforts of a sales assistant who I'm sure its incented to sell it, and and no time were they aware of their rights under CGA. That is wrong IMHO.

Geektastic

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#1121453 3-Sep-2014 22:17

nate: It seems that the big retailers are all moving to interest-free finance - it would be naive to think that the finance portion isn't being built into the purchase price.

I like to pay cash for things, but a lot of the time the retailers are removing the incentive to do so. What do you lot do to get a better deal when opting not to do it on Q Card/GEM Visa?

What kind of 'things' are we talking about?

Geektastic

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#1121454 3-Sep-2014 22:20

khull: From talking to staff, organisations like Q card and Gem exist because of the proportion of customers default on payments or become delinquent. The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford.

Probably does not ring true for people in this forum

The retailers merely sub out the finance provision mostly.

Someone told me once that when you buy, the retailers are paid by the finance company almost immediately. What happens after that is between you and the finance company - the retailer isn't the one waiting 3 years for his money!

mattwnz

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#1121482 4-Sep-2014 00:03

nathan: If they had morals they wouldn't sell extended warranties

I beleive if you now sell extended warrantes , you have to tell the cusomter how it benefits them over teh CGA. But for businesses extended warranties can be worth getting.
Regarding morals, that does remind me of what I read someone else post here, in that Kiwis are good at taking other kiwis for a ride. I do think it is getting worse and there has been a drop in standard of our morals in NZ.

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sir1963

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#1121536 4-Sep-2014 08:33

joff_nz:
nathan: If they had morals they wouldn't sell extended warranties

I disagree, I've purchased Extended Warranties which offer me more than CGA, with guaranteed less effort, and sometimes for very little. Yes many EWs are oversold however in my opinion, your statement above is rubbish.

Strange, I have made an number of claims using the CGA and won them all and I have helped others with their claims, again winning them all.
Extended warranties offer very little extra, except perhaps worldwide warranty. The CGA also goes beyond EWs, for example it is fair and reasonable for w refrigerator to run for 10 years, TVs for 7-8 years, etc etc etc.
Different products (and quality) have different lengths of "durability, Fit for purpose, etc" but I have yet to see a EW that goes for the same period as the CGA.

The other thing is they are "money for jam", if electronics are going to fail it will be in the first year, them highly unlikely for the next 3-4 years and then failures start climbing again after that. The EW is simply covering the time of least failure, and is actually paying for the shop to take a %, the EW to run staff and an office, and to give profit back to a parent company. EWs are extremely profitable which is why some places push them hard, or at the very least they get some money for doing something they would have had to do for free anyway.

sir1963

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#1121537 4-Sep-2014 08:37

nathan:
joff_nz:
nathan: If they had morals they wouldn't sell extended warranties

I disagree, I've purchased Extended Warranties which offer me more than CGA, with guaranteed less effort, and sometimes for very little. Yes many EWs are oversold however in my opinion, your statement above is rubbish.

Rubbish?

Sure its less effort than CGA. But many of my friends & relatives have bought EW based on the efforts of a sales assistant who I'm sure its incented to sell it, and and no time were they aware of their rights under CGA. That is wrong IMHO.

In fact most retail staff will lie to you and tell you the CGA is the same as the warranty.
I had a sensor sales person twitch when I pointed out that what he said was against the law as it was
was a gross misrepresentation and that was against the law (misleading advertising , etc)

khull

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#1121571 4-Sep-2014 09:01

Geektastic:
khull: From talking to staff, organisations like Q card and Gem exist because of the proportion of customers default on payments or become delinquent. The retailers love these customers and provide the 0% interest free to entice such people to spend more than what they can afford.

Probably does not ring true for people in this forum

The retailers merely sub out the finance provision mostly.

Someone told me once that when you buy, the retailers are paid by the finance company almost immediately. What happens after that is between you and the finance company - the retailer isn't the one waiting 3 years for his money!

That is accurate - again, sourced from floor staff and not the same retailer. Also they book the revenue in immediately from the sale.

tdgeek

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#1121575 4-Sep-2014 09:02

nathan:
joff_nz:
nathan: If they had morals they wouldn't sell extended warranties

I disagree, I've purchased Extended Warranties which offer me more than CGA, with guaranteed less effort, and sometimes for very little. Yes many EWs are oversold however in my opinion, your statement above is rubbish.

Rubbish?

Sure its less effort than CGA. But many of my friends & relatives have bought EW based on the efforts of a sales assistant who I'm sure its incented to sell it, and and no time were they aware of their rights under CGA. That is wrong IMHO.

I disagree. They are selling an EW so they are bound to explain what that covers. They are not selling the CGA, so thats nothing to do with it. This is Retail. Particualarly if the EW has ONE factor which the CGA doesnt, whoich will be the faster, easier, resolvment.

In a world with you and I being asked, we would happily assess the EW and CGA and advise, but a business isnt going to try to sell something, then dilute that with info on a competing service. The CGA needs to advise the public if they feel many are unaware, which I believe is the case

linw

2849 posts

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#1121591 4-Sep-2014 09:20

Wow, you really haven't kept up with the change to the Fair Trading Act. A little look at Consumer's site may be enlightening.
http://www.consumeraffairs.govt.nz/for-consumers/goods/warranties#obligations

AidanS

458 posts

Ultimate Geek

#1121610 4-Sep-2014 09:34

[off topic]

I have a friend who works on the floor in a leading NZ retail consumer IT shop. He only gets paid his monthly commission if 20% or more of his computer sales were sold with extended warranties. He usually gets about an 80% EW sale rate, he even admits that many consumers are oblivious to CGA.

Most EWs don't come with added benefit over the CGA, the only key benefit which I find immoral is that having EW will typically make the returns process "easier" and more hassle free, but even that is debatable in some stores.

[/off topic]

The same friend also gets paid "more" commission if his sales are made through the stores finance partner, as opposed to cash or credit card. However some stores, such as the large box that I work in one day a week looses money on zero interest finance sales, and we have to get manager authorisation if we are to do one.

-A.

tdgeek

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#1121629 4-Sep-2014 09:49

linw: Wow, you really haven't kept up with the change to the Fair Trading Act. A little look at Consumer's site may be enlightening.
http://www.consumeraffairs.govt.nz/for-consumers/goods/warranties#obligations

Point taken, but having to say wow?? Like the other 4 million in this country I don't check the FTA on a weekly basis.'' Other than that, tks for the headsup, a VERY interesting read. The clearly incented sales staff will struggle if they are to tell what extras over the CGA the customer will get and the rights under the CGA.

nate

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#1121687 4-Sep-2014 11:14

Geektastic:
nate: It seems that the big retailers are all moving to interest-free finance - it would be naive to think that the finance portion isn't being built into the purchase price.

I like to pay cash for things, but a lot of the time the retailers are removing the incentive to do so. What do you lot do to get a better deal when opting not to do it on Q Card/GEM Visa?

What kind of 'things' are we talking about?

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