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Regionals Left Out Of PC Rebate Craze

Some regional retailers reported being snubbed by AOL, MSN and Prodigy when the chains attempted to become involved in the $400 mail-in rebate programs that effectively bring the price of a low-end PC to zero.

The rebates became available through several national consumer electronics, computer, and office supply chains earlier this month and are causing a large amount of consternation among regional retailers who are already hard pressed to compete with the nationals.

“We’re not involved, and that’s a real dilemma right now. Prodigy and MSN are just not looking at the regionals. There is no question that these [deals] will be damaging to us,” said Steve Hassell, PC buyer for American Appliance, adding it will be hard to overcome consumers’ perceptions when they see that PCs at American are priced several hundred dollars higher than the national competition.

Jeff Kirschblum, marketing VP for Nationwide Computers and Electronics, said so far sales have not been impacted, but he can’t say what will happen in the future.

AOL declined to work with his chain saying that it did not have enough bandwidth to handle smaller customers, Kirschblum said, but he was not certain why Prodigy was not willing to do so.

The AOL rebate is only available to consumers buying eMachine PCs, in which the ISP owns a minority financial stake.

An AOL spokesman said the ISP would be expanding its program later this month, although she would not say which vendors were being added. Hassell said that Compaq would soon join the AOL deal, which will help alleviate the situation in his stores to some degree.

Ahron Schachter, VP-general manager of DataVision, said Hewlett-Packard also would join the AOL deal in the next few weeks.

MSN and Prodigy did not return phone calls.