A trip to most of Beijing's big departments will leave you dazzled by bright glossy posters enticing shoppers to spend big, with the reward of getting coupons.
Promotions shout "spend 100 yuan and get 80 yuan worth of coupon free," or "spend 200 yuan and get 236 in return." Are we really getting such a good deal, or are we buying things at inflated prices, just to get a coupon? Are shoppers being tricked into parting with their money on a false illusion that they are getting something-for-nothing?
Last weekend for China's New Year holiday consumers has seen another surge of coupon-returning activities at most big department stores and shopping malls. This type of promotion is not new for people in Beijing. But often shoppers are annoyed by these coupons because there're so many restrictions, like limitation on the types of goods that can be bought using the coupon. Many people end up buying things for the sake of it, things that they don't necessarily need.
Miss Jiang is a shopper who was sold by the coupon deal, but ended up a disappointed shopper.
"To make full use of the coupon, I really have to do a lot of preparation before shopping. But still I bring home a lot of unnecessary things. Because of this experience I am more aware now that coupons are just a way department stores can sell more products. I feel like I have just moved goods from their storage into my house."
The coupon-returning schemes were initiated by a few departments stores in Beijing, but others have followed-suit seeing how successful they are. During this festival season the competition within departments is in full force. One promotion says "spend 100 return 100"; another "spend 200 return 300". It's unavoidable that we wonder, are departments still make profits? According to Mao Ping, General Manager of Xidan Department Store, generally the utmost amount of refund is 60 out of 100.
"If we take everything into account, the cost of clothes accounts for about 70 percent of its total price. So the highest rate of coupon-returning is 60 out of 100 for Beijing's departments. And if higher, there should be someone to sacrifice. Usually it's suppliers or both the departments and suppliers."
The market reveals that only about 30 percent of big brand suppliers in the capital never or seldom participate in department stores' promotions. The rest shall cope with the promotion on a regular basis. Here is one salesperson who wants to remain anonymous.
"Actually we can't afford that amount of coupon. To cope with it we usually have our own ways. We put our storage on sale again. Or, we raise the price of the new arrivals right after they hit shelf. Usually the rise is 20 percent and sometimes even higher."
His words are confirmed by many insiders. Actually many Beijing's departments have found themselves weighed down with this increasingly crazy competition by offering more coupons. And customers who take it for granted that they get benefits actually fall into another trick and become the biggest losers.
Many people have called for legislation to solve this problem and hopefully with more public attention on the coupon issue, a new regulation to guide the market can come into being as soon as possible.
(CRI January 5, 2005)
