July 22nd, 2009
Standing Side By Side With Consumers In Rough Economic Times
What started as an innovative automaker’s marketing ploy, which helped move inventory by offering purchase protection plans for jobless customers, is now becoming a standard level of consumer support across many different markets. Companies are coming up with more creative solutions—rebates, penalty-free refunds, special offers should you become unemployed—to get consumers back into stores and opening their wallets again.
Hyundai kicked off the recession trend of buyer incentives with its Assurance plan launched in January, which gives customers who are laid off within a year of purchasing a new Hyundai the option of returning the car and being absolved of the remaining payments (up to $7,500).
And where one good offer goes, many were sure to follow:
AutoNation, the largest U.S auto dealership chain, pledged to cover car payments of the recently unemployed for 6 months through its Protection Payment program; Ford’s Advantage Plan covered monthly car payments of $700 for a year for customers who bought a vehicle between March 1 and June 1 and lost their job by the end of 2009; GM’s Total Confidence program covered payments of $500 for up to 9 months for customers who purchased between April 1 and June 1 and lose their job within 21 months of purchase.
With unemployment creeping to near 10% nationally, job-loss protection offers are a smart strategy to give nervous consumers a sense of security to spend money while also easing consumers’ fear of possible unemployment. The idea to provide offers based on possible future job loss spread quickly from carmakers to financial service companies to airlines and even to drug companies.
Nowadays, a little peace of mind has become a way of business.
- Need that new dishwasher or stove but concerned about losing your job? Sears’ Buyer Protection Plan gives consumers a safety net in these troubled times. Use your Sears card to purchase a major home appliance totaling $399 or more and you are protected if you are involuntarily laid off. If consumers lose their job after 60 days and up to one year from the date of purchase, 1/12 of the entire purchase price is credited to your account each month until it is paid off or you are employed again. The Buyer Protection Plan is in a nationwide testing period from July 6 to August 1, 2009.
- Want to get the high rates of a CD but concerned about the penalties that could come with locking up your money in a CD? Discover Bank aims to help you earn more while worrying less. Their new Penalty Free 12-month CD earns consumers 2.00% APY, and if customers loses their job, they can withdraw their savings principal plus interest without any penalties or fees.
- JetBlue wants you to plan your vacation free from the worries of your employment status. If you are involuntarily laid off, The JetBlue Promise Program will fully refund your fare as long as your travel plans are prior to December 31, 2009, you are over 18, and you paid for the itinerary. JetBlue also offers a Getaways Vacation Package Refund as part of the Promises Program. The Promise Program was originally slated to end in June, but has been extended through 2009.
- Don’t let unemployment stop you from staying healthy. Pfizer’s MAINTAIN (Medicines Assistance for Those who Are in Need) program is a free medicine program for the newly unemployed. Pfizer‘s MAINTAIN program gives away 70+ types of prescription drugs for up to a year or until you become re-insured. To be eligible, you must be taking a prescribed Pfizer medication for 3 months prior to becoming unemployed; enrollment is open through December 2009.
- K-Mart is running the Smart Assist Savings card pilot program, in which unemployed customers can save 20% on all Kmart private label goods for 6 months. This discount program is being run first in Michigan, where unemployment is at the national high of over 14%.
In these rough times, it’s great to see companies reach out to meet consumers half way on the risk scale of unemployment. Not only are companies going to drive additional sales by providing consumers the confidence to shop, but there’s a significant amount of good karma these companies are building with both unemployed and employed consumers alike.
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It’s nice that companies are trying to help out the unemployed sector. Lets hope that the economy turns around soon so that these programs are not needed any more.
But if you do the math, if the unemployment rate keeps going up steadily for a long period of time, this kind of perk can only last so long.