Why would B&H promote this??

Started 2 months ago | Discussions thread
Marty4650 Forum Pro • Posts: 15,384
Re: Potentially a bad deal for B&H

Sara Valentine wrote:

if all the card users are paying their balances, the interest won’t be there to offset these credits and B&H will be losing out on around 6-10% of the revenue.

There is absolutely no doubt about it. They would lose 6-10% of their revenue IF all their credit card users used the Payboo Card and paid their balance in full when they got their statements.

But I think that a thorough and careful cost analysis has already been done by B&H and whoever owns Payboo. They already know what percentage of customers pay bills in full, and what percentage carry a balance from month to month. So the actual cost to B&H might be much smaller, perhaps half that much. And some of that cost might be offset if Payboo shares some of that "extra interest rate" with B&H. Or if the overall marketing plan generates significantly more volume.

It surely is a risk that B&H has decided to take. And the odds are, they already thought it out before making the decision. And you are right. They are taking a risk.

If it does cost them too much, they can simply end the program, after giving their customers appropriate notice. Many other cash rebate plans have been started and stopped long before this one came into existence.

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