Logitech Gives Away Free Stuff - sort of

I was mulling over why Logitech Australia would pour $300k into a cash back offer, in the form of – ‘Buy this selected product, get your money re-paid by Logitech’. What is the benefit in paying people to buy your stuff? I think I have it sussed!

Logitech wants to clear stock. It’s February, Back To School is in full swing and new stock is on the way to stores. Logitech also want to get the highest possible price for that stock, considering it is now 2011 and 2010 stock is dropping in value fast. How do they do it so that retailers can still keep their prices stable, but customers go into store and buy?

A rebate offer is a perfect solution.

Here are some reasons why it is such a good thing to do and also some tips to make sure you get the best value. Logitech have listed the following products (straight copy paste from the press release):
1. Logitech Wired Mouse M100 - Black, RRP $19.95
This mouse simply plugs into a computer or laptop, providing reliable and comfortable control.
2. Logitech Wireless Mouse M215 - Black, RRP $29.95
This compact wireless mouse has a tiny receiver that simply plugs into a USB port, without the hassle of a cord.
3. Logitech Webcam C200 / Webcam C210, RRP $39.95
With free, easy video calling included and a microphone built in, this webcam provides convenient and high quality video calls.
4. Logitech ClearChat Style Headset, RRP $39.95
This PC headset is stylish and comfortable with interchangeable coloured ear pads and a behind-the-head design.
5. Logitech Media Keyboard K200, RRP $29.95
A slim, sleek keyboard with spill resistant keys, making the use of laptops more comfortable and the keyboard more robust to those occasional spills.
6. Logitech Wireless Desktop® MK250 / Wireless Desktop® MK260, RRP $49.95
A compact wireless keyboard and mouse combo with extended battery life that provides the freedom to work away from your desk.
7. Logitech Cooling Pad N100 / Cooling Pad N120, RRP $59.95
This provides a comfortable working surface to rest the laptop on, ensuring the heat generated by the laptop doesn’t burn the lap, nor retard the computer’s performance.

Let’s grab a couple of random products from the list.

Product 1, the ‘Logitech Wired Mouse M100’. This product was released in January 2010, so chances are it could have been sitting on a retailers shelf for the past 12 months. The Logitech Media Keyboard K200 was released in July, 2010. This date is more recent, but still six months old.

So, we can determine that Logitech are using this promotion to clear old stock, nothing wrong with that. 

I’ve spoken to various technology hardware companies in the past about ‘cash back’ promotions and received some interesting feedback. A general consensus is that around 30% of purchasers actually submit their information in an eligible way to benefit from the Cash Back promotion. I can only speak about personal experience, when I say that out of the four most recent promotions I have been eligible for, I have received a product or cash benefit to one. That is 25% and is not 100%, and is only that high because my wife went through the labourious task of sending in the required receipts and registering online.

So if 30% customers correctly submit their information for the rebate promotion, the $300k cash back pool, can expand into a $900k retail sell through value. This is not an exact amount, I am just working through a theory.

What happens if you buy an eligible product and the pool of funds is exhausted? Logitech has set up a website that will track the amount of money that is left in the promotion pool, so you can look it up in store from your smart phone or on your home pc before you go shopping - www.logitechcashback.com.au

So in summary there is no catch, if you buy the right product early enough and submit your information correctly, your product will be free. But the promotion is designed to push through sale older stock to make way for the new, and is using a promotion mechanic that historically experiences about two thirds of customers not getting any benefit at all because of their own inability in not meeting the criteria for realising the promotion benefit.

My advice, go out tomorrow. Buy five Logitech products you want, and follow the rules of the promotion so the purchase price is refunded to you in full.

Updated: The buyback offer lasted just over 13 hours and funds have now run dry.