Could Logitech Actually Sell $300,000 Of Gear In Four Hours?

Yesterday, Logitech launched a 100% cash back offer on selected products for Australian customers, but within four hours it had shut the deal down, saying that it had already reached the $300,000 limit for the value of the promotion. Is that actually possible? It might sound odd, but the answer is yes.

We mentioned this promotion briefly earlier in the week in the context of a different discount, and given how rapidly it sold out, it's probably just as well we didn't give it more prominence. The terms and conditions made it clear that Logitech would close the promotion once $300,000 had been spent, but no-one expected it to happen quite so quickly, especially given that only physical store sales were eligible.

Several journalists I know have expressed scepticism at this outcome, using a logic that goes roughly like this: The cheapest product in the deal (a mouse) cost around $20. To reach $300,000, you'd need to sell 15,000 mice, which means over four hours or so, you'd need to sell roughly one every second -- something that would be pretty obvious in any electronic retail store.

While this sounds like an appealing superficial logic, I don't think it takes account of all the facts. Any individual household could purchase up to five items for the cashback deal. The deal had been heavily promoted on Logitech's Facebook page, and also made a prominent appearance on OzBargain. And even before the deal kicked off, OzBargain commenters had noted that it might run out quickly:

This deal has 2246 click throughs. Assuming others out there know about the deal, consider what happens if 3000 people have made purchases? $300,000 is available for the cashback. If there are just 3,000 customers, so far, who know about the deal, that’s about $100 each.

If each person purchases five of the cheapest items, that takes care of $100 pretty quickly. If they go for the pricier items (such as a full-priced chill mat) at $60, they could spend even more and drain the funds pool even faster. And leaving aside dodgy types trying to stock up for later eBay sales, who wouldn't stock up on a few gadget Christmas and birthday presents (plus a new mouse for themselves) if they could get them for free?

Such a scenario also wouldn't necessarily mean a rush at retail either. Officeworks, Harvey Norman and Dick Smith collectively account for about 600 outlets. Assuming $100 is spent (which is really a lowball figure), that would require just five visitors to each outlet -- and that's without accounting for other stores that also sell Logitech gear. That certainly wouldn't lead to massive queues throughout the day, or anything more than a quick rush by a handful of well-organised types first thing in the morning. Saving money is a popular hobby for many people, so it's not hard to imagine what amounts to less than 0.02% of the whole population (if you use the 3,000 figure) getting on board for this one.

Note that I'm not saying that is what happened -- just that it's not as improbable to sell that much gear as it first sounds. Cashback deals are carefully monitored by the ACCC if complaints are received, as HP knows all too well, so trying to fudge the numbers would be a really bad move. It may turn out to have been a bad PR strategy for Logitech anyway, given the disappointed customers who have purchased gear and won't get a refund, but I don't think it's possible to argue that it's impossible purely on the basis of the numbers we know.


Comments

    I watched it like a hawk yesterday. Off the bat (before 9am) it was already down around $270,000. With officeworks opening at 7am that's very easy to do.

    I got three cooling pads for myself and family and the hard part was tracking down a shop that wasn't out of stock, I ended up getting them from Harvey Norman who had the full ticket price of $60 but they knocked off a bit of buying three. By the time I sorted that it was about 10:15 and it was just over half at about $160,000

    The cash ticker was updated about every 10 mins going down about 6k per time and bigger jumps closer to lunch

    Great deal if you were lucky to get in. I only got 3 items and shoulda got my 5 but I had to send my family in to do the buying and am happy enough.

    It kinda sucks for the people not in NSW/VIC/ACT/TAS as they all had a head start

    I was up in the morning around 1am, I can't if it was then, or in the morning, I saw it at 160k. Then by the night, I checked again and it was all gone.

    It just goes to show how much logitech makes

      'made' - don't assume a buying spree as the result of a promotion is going to reflect the same buying patterns on any other day.

      And yes, as a result of the promotion, they made exactly $0

      Of course, if you take into account all the overheads, cost of sale, advertising, etc. then they actually ran at a loss.

      anyway, I digress...

        I agree that this one off sale doesnt reflect their everyday sales figures, but how did they make $0 or even a loss?
        What about all the people that bought logitech gear in the hope of getting this 'cash-back' deal but ended up not getting their claim in in time?

    Bad move Logitech. These deals are only satisfy a small amount of customers.
    "This deal has 2246 click throughs. Assuming others out there know about the deal, consider what happens if 3000 people have made purchases? $300,000 is available for the cashback. If there are just 3,000 customers, so far, who know about the deal, that’s about $100 each."
    The only happy customers are the ones that recieved the cashback. As a business, would you spend $300,000 to keep 3000 customers happy? As far as I am concerned, keep this up and any cashback deals in the future will not be effective.

    Logitech uses 100% Cashback on Australians...
    ...
    It's Super effective!

    I don't see anything dodgy about this deal. I went to Harvey Norman at 9am, bought 5 things for $200 bucks, claimed it and sent receipts in the mail. $300,000 is not a lot

    "Could Logitech Actually Sell $300,000 Of Gear In Four Hours?"
    no, it wasn't over 4 hours, the deal started at midnight 1st Feb and was closed around 1.30pm same day so the claims were made over a 13+ hour period, if you checked the ticker at 9am(even 7am) it was well below 300K, like many others i went to a 24hr Kmart to buy my 4 items, also online purchases were valid as proved by Ozbargain members

    "especially given that only physical store sales were eligible."

    That's not correct. Online offers were accepted and welcome.

      The conditions did specifically exclude some online stores (including Logitech's own).

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