Isn’t this familiar to you? Haven’t you seen this at least a few times in the past few months?There seems to be a cashback frenzy all over India with the proliferation of eCommerce deals as well as the advent of these wallets – everyone (I mean banks, Apps) seems to have an in-built wallet these days (except me i.e. the poor customer!)
Now, the big question is: How ethical are these practices? Is the regulator even turning an eye towards such practices?
I’m one of those who has to book a flight ticket almost every couple of weeks to travel as part of my consulting work, so I probably see this more often.
It’s frustrating, but more than that it is deceptive marketing and I don’t think it’s ethically right either!
30% cashback on Flight booking on International Flights says the offer…
(The fine print says maximum cashback is Rs 3000).
Now, how many international flights would you be able to take which cost only Rs 10000 to get the maximum cashback of Rs 3000 at a 30% discount? You could probably count on your fingers! How would this benefit me when I’m booking a flight ticket which costs about Rs 50,000 to Rs 100,000? The cashback on offer is almost negligible. So, why say 30% or 50% discount when it is not truly that? The big “discount” on the tagline seems to be a way to lure you into booking the ticket.
70% or more discount in cashback on Hotels! This is almost a regular feature on Makemytrip, Cleartrip and other Apps! Which hotel on earth would be able to give you back 70% of the cost – they wouldn’t survive! The fine print again would show you that you probably would get 5-10% at most!
Now to the other side of the coin – the deal codes on these cashbacks and how they (don’t) work!
Somewhere it says if you don’t copy the deal code as-is, our systems won’t be able to detect the deal and we won’t be able to process the cashback. Sometimes, even if you copy the code, it won’t process the same and exclude it from the actual booking!
Some Apps restrict how you can use the cashback – there’s a limit per transaction, there’s a limit on what you can use it for and of course, there’s a restriction in some cases that this is just a “bonus” amount and you can’t actually withdraw this money into your bank account or credit card, there’s also an expiry date in many cases – if you don’t use the cash in the wallet within 3/6 months or so, it goes away.
All this seems to be a way to lure poor customers into a transaction with the promise that they will at some time in the future get some cash back into their account (and hence tap that emotional quotient that they are actually getting a discount), but there’s no guarantee that they will be able to get this in the first place and even if they do, there’s no guarantee that they will be able to use it for a future transaction!
Cashbacks remind me of the time when mail-in-rebates were prevalent on everything and anything in the USA in the mid-2000s. They were the most frustrating thing because you had to mail-in so many proofs and even if you did, sometimes you just wouldn’t get the rebate for a flimsy reason. I believe mail-in rebates got caught in a web of legal tangles and died their natural death.
I won’t be surprised if cashbacks and “wallets” head that way in the time to come!They are anything but a boon to the intelligent customer! However, I think even the eCommerce firms and Banks should exhibit an element of honesty and not mislead the customer with fine print. The customer shouldn’t have to delve into fine print to be served a fine product!
Jago grahak Jago!