Sony UK is running a VAT back promo with most of the UK's consumer electronics retailers in the Christmas run-up. In other words you claim a 17.5 per cent discount on a bunch of gadgets bought between 28 October and 24 December. You have until 31 January to claim the cash back from Sony. The scheme includes "all 3D televisions …
If this guvmint were more commerce friendly, they would have set the new VAT rate at 19.99% rather than 20%.
Really 17.5% discount?
Assuming your widget from Sony cost £1175, the VAT is £175, but 17.5% of £1175 is about £206...
That's why they do it...
...looks more generous than it really is. rank it along with the Up to* half price off (in reality 10% for 99.999999% of stock)
All to save 2% ??
It's funny how psychology works. The VAT rise will obviously increase nominal retail prices but the effect really is pretty small - just 2.13% extra on the existing price. So on say one £200 item you're spend maybe £4 extra - little more than the cost of a pint. I know - look after the pennies etc, but all the same there does seem to be a huge sense-of-proportion failure pending.
Letters and Digits are unable to take your subject right now - please hold
The recent VAT cut to 15% then back up to 17.5% in 2009 should be enough to show you what conniving gits retailers are.
An item costing £99.99 when VAT went down to 15% would have been changed to £97.86 saving all of a couple of quid. A few months later that same item (or more likely the revised model of a replacement) was back to £99.99. That VAT reduction pricing didn't last long.
When VAT went back up to 17.5% all those items now at £99.99 (including 15% VAT) were immediately revised up to £102.16 but when the replacement came out it went up to £109.99.
So yes you are right that the 2.5% increase in VAT to 20% is probably only a few quid here and there on items you don't buy often, but its how retailers will exploit it to sneak through some extra price rises to keep prices in that £xx9.99 style that is making me rush to get as much of my planned discretionary spending done before 31 Dec 2010! If Sony and others are going to help me with some discounts along the way then I, for one, welcome, and so forth....
PS - It was always clear that the only winners from the VAT cut in 2009 were the retailers due to tricks like this, and anyone buying anything that is normally priced EXCLUDING VAT, with the VAT added on at the end (e.g. phone bills).
...have moved to December, please update your calander.
Sadly, it'll be nearer a 15% discount. Remember, the 17.5% is an /increase/ on a smaller number. The difference between the two is a lower percentage of the bigger number.
Mine's the one with a Casio graphing calculator in the pocket.
"Sony says its consumer revealed "
I know sales are down, but not that bad surely?
If Sony really wanted to 'give the VAT back'
They'd just cut the price by that 15 odd percent. This way, it relies on a number of consumers sending in a claim by post in January. In all likelyhood, this will be less than 50%, so for Sony, it's only a price cut of around 7 or 8 percent, in reality. The consumer sees '17.5% off', Sony loses much less than that.
At least they're not doing the 'Phones4u' style 'chequeback' scam, where you have to make a number of claims for payments of small amounts, all of which must be made at the right time, by post, with the correct reference number, or you don't get any of the subsequent amounts.*
*I know this to be the case; I was involved in writing the back-end system for processing the 'claims'.
Talking of XFactory, does anyone else find it strange that in the middle of the plethora of Sony gear being punted during the show that they have plonked an iPod dock in the middle?
Mini sales boom.
Just wait 'till VAT goes up to 20%, and watch sales plummet.
I won't be buying anything unless it's essential during this time.
As some people have rightly pointed out 17.5% is an increase on a smaller number. The actual amount of discount advertised in the small print is 14.9%. Better than a kick in the nads though.
Great that Sony are giving something back but definitely a case of buyer beware - lots of big names in electrical retail are not eligible for this promotion. For a full breakdown of which ones are check this out:
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