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Converter Box Coupons: Feds Fall Short

TWICE: Is everyone here participating in the converter box coupon program? Unless you’re a mass merchant, why bother?

Steve Caldero, Ken Crane’s: From the perspective of a small regional chain, it’s merely defensive at this point. Our belief is that you can’t not participate. It’s another opportunity for the customer to come in.

TWICE: It’s not your customer though.

Jeannette Howe, Nationwide Marketing Group: Everybody has a VCR in their house that’s not going to function. Everybody has a television set that’s not going to work any longer. Ken Crane’s has been the place where people come to get their information.

Caldero: It is another example of our wonderful government at work in making it so complicated. In reality, in Southern California, 99 percent of the people are either on cable or satellite. It’s not going to affect them. I’m sure in markets that you guys service, it’s a much different percentage. But if we don’t at least tell people, yes, we’ll honor the coupons and we have the converter boxes, even if it’s just one in every store, you don’t get that opportunity. You send them to your competition. Why would I do that?

Irynne MacKay, Circuit City: Competitive issues aside, it’s just the thing to do. Customers trust us, they come to us to learn what’s going on; that’s our value. And at the end of the day if they end up using their coupon and not buying a new TV, that’s fine too.

Dave Workman, PRO Group: You hit on it, Jeannette. Everybody is thinking about the coupon as though it’s Billy and Betty Sixpack out in the middle of Arkansas with a VCR and a coat hanger on the back of the set. Those are the devices in the home that have worked up to this point that all of a sudden will go blink.

The issue is really getting registered by March 31, and I don’t think there’s going to be any activity of any substance early on. Then, when the lights go out, you have to be there as a service to the consumer. As Irynne said, it’s the right thing to do. But the consumer is going to seek out the point where they are most comfortable shopping, and we won’t really know who and what it’s going to be until somebody turns the switch off.

Caldero: I wish our government had spent a tenth as much money educating the consumer as it has on this whole debacle with the coupons. Just to give you a little perspective, when Berlin went HD for the World Cup, the city spent three times as much to tell people about the DTV transition as the U.S. government is planning to spend for the entire United States. It’s done a lousy job of letting people understand what’s going on. They just started running the DTV conversion spots, but still, the confusion is we speak this techno-jargon: LCD, DLP, DTV, HDTV. People just want a “flat.” “Give me a flat screen, I want a flat.”

TWICE: So the onus once again falls on the retailer to do the heavy lifting on education.

Howe: They’ve also done a very poor job of letting the dealers know. There’s no urgency. Many dealers out there, particularly smaller dealers, have no idea that March 31 is the last day that they can sign up to take coupons. In my world, there are 1,000 Nationwide members that sell television sets. I’ve looked at the list of “approved” dealers, and there are about 10 from my dealer base. I don’t see your company on this list, Steve. I don’t see Ultimate on this list yet. CERC [Consumer Electronics Retailers Coalition] has been very involved in getting its members on the list, but having worked at PARA, there were 400 dealers there that are not on this list. It’s imperative that we get the word out to all specialty electronics dealers, all dealers that sell television sets, so they’re prepared for this.

Workman: That’s what we discussed at our meeting, just to make sure that all of our PRO members get signed up.

Howe: Right, even if you don’t ever take a coupon.

Workman: The sign-up itself isn’t a big deal, but I think everybody is thinking about the software integration and the coupon redemption. Dealing with the government is probably going to make the sell-through credits look like a walk in the park. But you’ve got some time to figure that out. The overall consensus we came to at PRO is it’s probably not going to be a big deal right now. You’ve got to get signed up by March 31, and then you can figure out how to program your computer systems so you can deal with Uncle Sam and get your $40 back.

TWICE: And if you’re not signed up by March 31, you’re out, you can’t participate.

Workman: April 1 it’s over.

Howe: And most dealers will never have even seen a coupon by then.