This seems like the kind of company that would spoil this particular form of customer service. It just seems like greed more than any real value.
Now, those old scummy companies that used to offer rebates while employing actuaries to calculate percentage chance that you won't cash the rebate, intentionally make the process difficult, and then profit? Go ahead and run those guys into the ground. If someone could upload a scan of the rebate and have you guys do the rest, I wouldn't mind that.
But I'd challenge you on your assumption that this is a bad thing for stores and consumers.
It's a powerfully negative experience to buy something, and then find out within a few days (or hours) that it's selling for far less. It happens millions of times per day (www.forbes.com/sites/walterloeb/2014/11/20/amazons-pricing-strategy-makes-life-miserable-for-the-competition/), and most people don't find out. But the reality is that it's happening.
A customer could return it for free (and re-buy it -- many states require this by-law). Or a store could do good by the customer and give a price adjustment.
It turns out that when stores do good by customers when this happens, shoppers become far more loyal (and spend FAR more on average too, growing store top-line & often net bottom line). This is part of the secret of Amazon Prime.
While I can't claim that it is the right or only view, I fully believe that stores will benefit far more than the costs.
*Revised based on mquander's feedback
They might very well be conniving, but your app to me feels more like those people that save up a bunch of coupons and walk out with a cart full of groceries and the grocery store actually owing them money. There's nothing wrong with that: I have no doubt that the CEO of Fred Meyer still rues that day in college that I walked into one of his aisles and walked out with a bunch of cartons of eggs.
People aren't victims when a company offers a product at a price that the customer is willing to accept. I'm sure you have a fine app that will save some people some money, but we're not rebels striking an uprising against our grocery store overlords who dare to sell overpriced eggs to underprivileged American consumers.
(edit): The parent post has been edited to sound less like a movie trailer, so my post may now sound out-of-place.
(Disclaimer: I use Paribus but it never got me any money yet.)
This is a side-payment, as in Coase's theorem. You are outraged at the side-payment, but that just hides the information asymmetry under a cloak of disgust. There is no valid reason that the purchaser should not learn the price subsequently dropped -- but the nature of homo economicus being what it is no one will use the first app without the second.
This app is an application of Coase's theorem, and takes an externality (uninformed consumers are like a clean river to dump bad pricing into at a profit) and internalizes that cost by making companies pay it -- it is always better for the market if costs are internalized, assuming markets work at all.
It doesn't matter whether the company or the consumer pays, according to Coase's theorem. The result will be the same. We might invent reasons to be outraged that the company pays, but really all that has happened is a market inefficiency -- information asymmetry -- has been eliminated. Prices are less sticky and more flexible. This is good.
I strongly disagree with this, and I have some real world evidence to backup my point of view that companies want customers to take advantage of these policies. Walmart has a feature in their app called Savings Catcher. When you buy something from there, you simply hold the receipt's bar code under your phone's camera for a few seconds. They automatically keep track of the prices of every single item you bought. When prices drop within the policy period, it is added to your Savings Catcher balance, which can be transferred to a virtual Walmart gift card for spending at any time the customer chooses.
If one of the world's largest retailers finds value in automating this process for their own customers, I can't imagine that other companies with this exact policy in place have a problem with people taking advantage of it.
I got my first rebate last night: 50 cents back on some RAM that had dropped in price the day after I purchased it. For anyone who is concerned about email permissions, here's the email (automatically sent from my personal account) to Amazon:
Subject: I was charged more than current price
Hey,
I am writing you to ask for a price adjustment review on a recently placed purchase. Please reference: http://www.amazon.com/gp/product/xxxx and xxx.
I ordered a Crucial 16GB Kit (8GBx2) DDR3L-1600 SODIMM Memory for Mac (CT2K8G3S160BM ) for $66.99 on January 10.
However this afternoon I noticed that the price is $0.50 less than the amount I was charged, as it decreased to $66.49. As I bought the item recently, and the price has been significantly discounted, would it be possible for you to please start processing a post-order price adjustment refund?
Many thanks for your outstanding customer service.
Best, Roy Murdock
The service also attaches a screenshot of the shipping confirmation to the email automatically, which is pretty cool.
I suspect that I would get more value from the service if I purchased a higher volume of commodity/low price goods on Amazon, especially computing parts that are essentially guaranteed to go down in price within the near future. Overall, it's great to have this sort of protection from dropped prices and is definitely worth the email access permissions in my opinion - but at the first sign of a data breach or privacy issue, I will drop the service immediately. I am not affiliated with Paribus in any way.
Though I did sign up like a year ago and this was the first time I had heard anything (totally forgot about it until now).
A compare/contrast on the Paribus website would be helpful.
I see statements that Paribus doesn't sell customer data, but on the Paribus blog, I see analytics run against what appears to be customer data. That dichotomy concerns me.
Are there any limits on how often a customer can request a rebate? What happens if the customer hits that limit? Will a company "fire" a customer, as can happen to people who return items too frequently?
I'm also surprised to see that Citibank has a patent in this area…
If you change your purchasing habits to choose items only sold by Amazon, you could quickly exceed any possible savings by paying the higher direct price than you'd pay for the same product (with the same shipping time) that you'd get from a third-party merchant.
Just an FYI if you're thinking about signing up for the service.
You might think we're crazy, but we fully believe (and have data to back up) that we're helping these stores far more than the costs.
One thing you should listen to is the number of people who want a reserve price (transaction threshold). This price setting is pure economic gold as information goes -- it tells you their risk aversion (probably) and the shape of their utility curve for extra income. I'm sure it correlates with income, and gives independent verification of income, statistically.
If you have 5 big retailers using your app feature internally, offer to build them a network they can join, to make their rebate offer even more attractive to participants.
With the stores' aid, you can circumvent the problems with email permissions, which frankly are going to limit your adoption. You are far better off working with the stores in a partnership I think, and helping them to understand their own customers' reserve price (and hence propensity for returns and chargebacks, which they surely care about), than being a 'gotcha' adversary.
Added link: https://en.wikipedia.org/wiki/Expected_utility_hypothesis
Disclaimer: I work for Refund Retriever, which has a similar business model.
I don't know if I want to authenticate my email address with them though.
It seems to me like Amazon/Best Buy/etc next move will be to add a provision that "You must submit a claim not through an automated service"
So their service will auth against your Gmail account in order to place a Draft there for you to send ;)
Another possibility- Amazon just coopts the idea and rolls it into a feature of prime, ala Orbitz.
It's pretty easy to add a rule in most email providers that forward only message matching certain patterns - you could even provide documentation of what patterns to include.
It appears that savings catcher is only for current prices, not prices that drop later.
We started building Paribus when we realized that most retailers were actually using PII and user information to price discriminate and overcharge their customers. The last thing we want to do is help enable these practices.
We are not selling data. Our model is to charge a portion of refunds that we actually get for you (that way we share same incentive as our users)
> We are not selling data
(in case my comment was unclear, I'm talking about companies blocking refund services like this)
Supplying merchants is also likely to provide a more _predictable_ income.
However...
Are giants like Amazon really likely to listen to a pitch from a startup, even one incubated at YC? (No snark, genuine question.)
There is another option: open source the product and give it away, charging for the hosted service. Obviously this may not be an option for Paribus, which would be a shame.