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Hand Joins The ISP Rebate Craze

To keep pace with the growing number of rebates offered by ISPs, PC vendors and retailers, Hand Technologies announced its own $400 mail-in rebate last week, and then upped the ante by adding $500 in coupons for purchases made at a variety of electronic commerce sites.

Hand is also investigating ways to integrate resources from Federated Department Stores, which owns 28% of the company, into its operation, said Hand’s chairman Nathan Morton.

Unlike other direct retailers, Hand does not actually sell its PCs, peripherals and software titles directly to the end user. Instead, it uses Technology Consultants (TCs) who act as individual Hand franchisees and are responsible for all sales and support.

Morton said there are about 7,300 TCs, with 1,000 being added each month. Each TC must pass a test to indicate whether they are technically qualified to handle installation and support issues before they are brought into the fold.

Consumers who purchase a Hand house brand Vivapro PC and sign up for ISP service through receive both the mail-in rebate and coupons.

The $500 coupon offer is expected to help Hand attain two goals. First, Morton hopes the promo will solve one of the most vexing problems online retailers face: getting consumers to make their first purchase from an online store. The $500 coupons, which are divided into $50 increments, are intended to give customers reason to make that first purchase and return to the web store in the future, he said.

Secondly, Morton hopes the coupons will attract online retailers to its site, eventually helping it become an online catalog. Hand receives an incremental payment from these companies on sales made by consumers referred by the Hand web site.

Along with Hand Technologies CEO Andrew Harris, Morton expects to have a plan in place in the next 90 days to help the company leverage its relationship with Federated and its subsidiary department stores.

“We have access to their customer database so we may use direct mailers or something similar,” Morton said, adding that the department-store customers fall into the same demographic as the people his company believes will buy products online.

Another possibility may include placing Hand TCs inside a Federated-owned department store. This could be particularly appealing to a non-traditional PC store because Hand’s uses a virtual-inventory business model, like Dell’s, so the Federated store would not need to stock any product.