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Just What is a Custom Configured Server?
djhanson wonders: "I just got back from a small claims court proceeding against Apple Computer. They successfully won their argument in front of the court that selecting additional memory and disk drives for a computer/server at the time of purchase, off of their website, constitutes a 'custom configured computer built to the customer's specifications'. Said computer is therefore not eligible under the company policy to be returned. Has anyone else heard of such a thing? As near as I can tell, Apple is the only company that has such a restrictive policy. I called both IBM and HP, and neither of those companies has such a policy. Am I the only one that thinks there is something terribly wrong with a policy like this?
Any opinions? Suggestions? Comments? Whatever?"
Read the small print next time. I think it's reasonable for them to claim that it is a custom configuration, but refusing to support it when they have done the assembly is pretty disgraceful.
If I seem short sighted, it is because I stand on the shoulders of midgets
Maybe I am wrong, but I think that the time it was posted is not the same as the time it was submitted. It could have been a few hours earlier which would be a perfectly reasonable time if the hearing was in the afternoon.
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This may have changed, but Apple has (or had) the largest margins on their machines; something around 25-28% or so. This was the average along their entire line, with laptop having the top margins and iMacs eMacs having the lowest margins.
As for the lawsuit, well it does seem a bit shady that adding RAM is gonna screw you. Maybe there is something more going on here that is not being disclosed?
Vote monkeys into Congress. They are cheaper and more trustworthy.
On that page it says:
"RETURN & REFUND POLICY
If you are not satisfied with your Apple purchase of a pre-built product, please call 1-800-676-2775 for a Return Material Authorization (RMA) request within 10 business days of the receipt of the product."
And a little further down:
"Please note that Apple does not permit the return of or offer refunds for the following products:
1. Product that is custom configured to your specifications"
I do think it's a bass-ackwards policy, but it's all there on the site. May not be fun, but always a good idea to read the fine print (especially before laying out the sort of money Apple wants).
they do the same.
you WILL have the machine we sent...
--
martin
This may have changed, but Apple has (or had) the largest margins on their machines; something around 25-28% or so. This was the average along their entire line, with laptop having the top margins and iMacs eMacs having the lowest margins.
You are right that Apple's margins are in that range. According to Apple's Annual 10-K report, the company had a gross margin of 27.5%. But that is only their gross margin (the difference between the price of the item and the cost of the materials in that item). That figure leaves out a number of costs that Apple pays. Out of that 27.5% comes the 8.6% of sales that Apple spends on R&D. Another 19.5% of sales is spent on SG&A (Selling, general, and adminsitrative). Note that Apple's 27.5% is not even that high as the average across the S&P 500 is nearly 50%
This leaves Apple with a net profit margin of only 0.4% which works out to about $8 in profit on each of the 3 million computers they sold in 2003 (Compare that to Dell's 6% net margin to see who is really making money off their customers).
I won't excuse Apple for not warning customers about the return policy in more forceful terms. For custom configured purchases they really should have a bold-face warning in the purchase script that is triggered by what Apple considers "custom configured". Yet, nobody can claim that they make to much profit from their computers or fault them trying to contain costs.
Two wrongs don't make a right, but three lefts do.
In addition to showing up in the news from time to time, I think that Apple bundles figures like that in the news releases that they give out to shareholders.
I'm not sure about the shareholder news releases though, I'm not a stockholder. I just heard about them in a comment on another story.
My blog
I had a machine on delivery (ie. Apple had shipped it and I had not received it yet) and their customer service informed me that I could not return it since it was custom built (I ordered a 15" laptop with a SuperDrive which was considered a custom built machine). The reason I wanted to return it was in the meantime we went to the Apple store to purchase more notebooks for the company and I picked up a nicer one for myself. So in short, time was within one week of purchase, no delivery, no open box, over $6000 spent at the Apple store, big F U from Apple.
Don't get me wrong, I like Apple hardware and and OS X, but the company is focused on money, with consumers coming second (like most companies) and they are not your friend.
-D
When I recently bought a Powerbook from my University's Computer Store, the sales person probably told me about three times, that since I was customizing the computer I couldn't return it. This was fine with me, since I knew what I wanted, but it was good of him to be that explicit about the return policy.
I haven't bought a computer from Apple's website, so I don't know how clear they are about the return policy. Whether or not you thin this is a good policy or not, this is an example of "caveat emptor". If your dropping big buck on a piece of hardware, you should probably read all that fine print.
It's not a great policy to have the default be no returns. It would be a more consumer friendly to reserve the right not to accept a return. Maybe this is how it's worded.
In germany, where i live, we have something called the "Fernabsatzgesetz" regarding purchases made by phone or internet.
The argument goes something like this: Since you have no way of testing the product before you buy it (since you ordered it through the internet) the law grants you the right to return the product within 14 days of your purchase without giving reasons why you'd returned it provided two conditions hold:
1. The product was not damaged by you since you opened it
and
2. The product was not costum built for you.
If either one of these conditions doesn't hold you will have to keep it. A product is custom built if it deviates from the basic or standard product in a way which cannot be undone. So simple upgrades like more memory or a better graphics-adapter don't count as custom built since theses modification can be undone by the vendor.
A personal engraving for your iPod on the other hand would count as custom built.
Of course since in your case it is not a law but only company policy you have to stick to their rules and Apple clearly states that any upgrade counts as custom built and makes the item exempt from the return policy.
So no it's not terrible wrong. Just because you were to lazy to read the terms of service doesn't make the apple bad.
Regards
Jeff
Wait still...
Depends of the country.
If customer is in France, and is not professionnal, and it is commerce at distance () sorry, don't know exact translation), he has 7 days to say : "In fact, I don't like it".
He then return it, and the provider must reimburse everything except postage.
It is not a matter of custom config, it is a matter of law, when the consumer cannot see the product he is buying.
And the fact that US consumers are not protected this way is quite frightening.
By the way, this (quite old) legislation does not seems to impose an undue burden on french corporations, because they continue to sell at distance... So you can have high customer protection and working economy at the same time.
I have bought computer components, installed them, removed them and brought them back.
The parts where fully functional, I just changed my mind and wanted an other part. It was -at the time - due to my limited knowledge about available software for the part. So I couldn't use it. The part I eventually bought was delivered with working software.
It was less than 7 days after purchase, so I got a full refund.
It's the law. A customer is allowed to change his mind, bring back the product and demand a refund. Within 7 days.
Then again, I live in europe and consumers have certain rights here.
Here is an idea for the future. Buy from a middle party that you can get better service from. I have used PCConnection for years, personally and on a corporate level. I have never had a problem returning custom configured equipment to them. Half the buying we did were Apple systems.
-==-
but if they have a notice posted doesn't that make you SOL?
Granted, yes it's a rather ridiculous policy. But, if you look at a definition of custom built their system falls under it. Also there IS that notice explaining their policies.
Buyers need to use sense. Especially tech buyers. It's not much tougher than that.
"It'll destroy you if you try to make it mean anything to anyone but yourself." - Henry Rollins
Since Apple is a publicly-traded company, they're required to report things like gross margins to the public. You can find the current numbers by downloading the annual report from this page
that are too stupid to read (and understand) the point. The poster never claimed that Apple wouldn't give warantee support for a broken product. Apparently he got the product, didn't like it, and tried to send it back. Their web site clearly says they won't take it.
This is not just Apple. Buy anything in the whole store at CompUSA, for example, decide you don't like it, take it back. Guess what? They will take it but they will dock you 15% of the price.
Maybe if the poster was able to read he wouldn't have had this problem.
Ahem. From Dell's web site (bold emphasis added by me):
Information wants to be anthropomorphized.
Apple isn't the only company to stand by this policy. Dell has the exact same policy on their CTO systems. I can understand from a corporate standpoint why this policy exists. If you're going to spend the time configuring a server / workstation system to meet your exact needs - you should have no reason to return it. The only exception is if the thing just doesn't work.
-Steve
Since there are few details provided, its hard to say, but I wonder if there wuld have been better luck returning say a 20" iMac for an exchange on a G5 w/ Cinema Display setup.
Try anyone else - Dell, Gateway, etc. Customize the system, then try to return it for a non-warranty reason.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
I agree, but if you ever need warrantee support you'll have to pull that stuff out before putting in the Hardware Diagnostics CD. For some stupid reason my school purchases it's PowerBooks from a 3rd party vendor who puts in extra RAM, but it's not from Apple. Guess who Apple blames when we send it back in with a hardware error code? Somewhat OT question: is there an equivilant to IBM's Gold Service for Apple, or at least some form of Apple Tech support that has a clue?
Apple really has a fair policy. My wife purchased an eMac back in November with additional RAM. We felt that there was a problem with the display. Apple agreed and refunded the purchase with no hassle at all!
Don't let what you cannot do interfere with what you can do. - John Robert Wooden
Just this past Christmas, I got to deal with this very issue.
:)
A long-time frustrated Windows user (who isn't?), I decided to finally take the plunge and get a 20" iMac.
Well, I got one with a stuck pixel (red) in the middle of the screen. I was incensed, but did my homework and read all about Apple's "tolerance" of such things. I also should note I upgraded the HD and memory when purchasing. Well, after three support calls where I was very inflexible (no yelling, though), I actually got them to take it back, beating both the stuck pixel policy and the "no returns on custom-configured systems" policy. Just stick to your guns, and you can get what you want. On a last note, the iMac they replaced it with has a stuck pixel as well, in a much less prominent place. So the real moral of the story might be "don't bother".
Court details: State of Washington, Seattle District Court, Small Claim No. Y3-9978, Trail date was 2/24/2004. Apple sent a corporate employee as their representative. I called them on the 10th day. They had no problem with the timing.
Not that different from other vendors. I'm fairly certain Dell will only accept a return if the box has never been open or if you can find a significant problem and get it esculated rapidly, and have you tried getting HP to accept a return (laughs). All the vendors will support, and provide replacement parts, etc. But typically, a custom configurations falls on under the you "you broke it, you pay for it"--obviously, the systems aren't always shipped broke, but its not like they can put the thing out on the floor, just because you decided you didn't want it any longer.
Court details: State of Washington, Seattle District Court, Small Claim No. Y3-9978, Trail date was 2/24/2004. Apple sent a corporate employee as their representative.
The purchase was a dual processor Xserve. I upgraded from 512MB of memory to 2GB and from 60GB of disk space to 480GB.
I was totally aware of Apples return policy before placing my order. My dispute is: Does selecting additional memory or disk drives really constitute a product that is "custom configured to your specifications". According to the defense that Apple used, even adding one stick of memory would have made it custom configured. My upgrades were selected from a standard menu on their website. I didn't call and ask for some esoteric tape drive or anything like that. In court someone brought up the analogy of buying a car. My response to that was, if I am buying a brand new car off the lot, and I ask for an automatic transmission (which usually costs more), I still have a stock car. No one is going to say that I bought a customized car. Knowing what I know now, I would order the hard drives and memory separately and install them myself after the 10-day evaluation period.
I appreciate the comment made by one poster regarding how the sales clerk made the return policy very clear. I think that Apple's website should be as clear. Maybe "Custom Configured" icons could be located next to the items that will affect the return policy. Apple's defense claimed that it states at the top of the web page "Configure your Xserve" and that this should be enough of an indicator. But, options included on this very same page also include the "Mac OS X Server Maintenance Program", "AppleCare Service and Parts Kits for Xserve" and AppleCare support Plans. Surely selecting these items wouldn't constitute a custom configured product. And at no other time during the purchase process, including my invoice receipt from Apple did it indicate that I was purchasing a custom configured product that could not be returned. I certainly don't think that Apple deliberately sets out to trap customers into purchasing items that can't be refunded. But, on the other hand their policies and procedures sure don't give the impression of being well thought out, or cohesive.
As for the concern about whether I was returning the product because I just changed my mind or it because it was broke. I'm not sure if the reason really matters, unless Apple wants to use the information to possibly make changes in their product or policies. After all, their policy does state "if you are not satisfied". It says nothing about have to give reasons. But, since people are curious .... The hardware worked without fail for the 10 days that we evaluated machine. In fact the hardware is the reason that we were attracted to the Xserve. The problems were related to the software. We found Apple's customized version of BSD Unix to be difficult to work with. We would add commonly used Open Source software and it would break some Apple proprietary interface, or vice versa. We really tried hard for the 10 days to make this machine work for us. And we found it frustrating every step of the way. I attribute this to Apple's proprietary way of doing things. But, the clincher for us was when we started with a clean install of OS 10, added Webmin (a commonly used remote admin program), and the server would crash when trying to remotely reboot it, from the shell prompt. This was very easily reproducible. And also totally unacceptable since the final destination for this box is a data center where hands-on reboots are a rare event. I know that I could have worked with Apple and probably gotten a patch for this issue. However, it seemed serious enough for me to decide to return the product, and look elsewhere.
I did give serious thought to installing Yellow Dog Linux on the machine and not even dealing with Apple's version of BSD Unix, but after havi
More details in my posting later in this thread: Little Guy Vs Apple - THE DETAILS
Yeah I really don't know what you're talking about, all recent Apple computers (define recent as "post-beige") I've worked with have taken any sort of RAM I've stuck in them so long as it was the correct type/speed for the machine... The only possible problem lies with certain RAM chips that have extra "features" Macs don't utilize and therefore will cause the Mac to reject the chip...but really once again it's simply a matter of knowing what chip features your Mac will accept or reject before you go buying RAM... this can very easily be found out at www.xlr8yourmac.com or other various web resources...in short - use "common sense" and do a little "research" before you go buying something and you will never run into problems...I can't believe I actually have to tell someone this...
Actually, Apple has no problems with the use of third party RAM in their machines. AppleCare agents probe for that info because it can affect troubleshooting. Many companies like Mac Mall or some other reseller will add RAM to a machine to make it a more enticing product, come sale-time.
RAM falls under the "customer installable parts" category, so adding that RAM, even third party, will not void the warranty. If during troubleshooting though, the RAM is seen to be the cause of the issue, that needs to be taken up with by the reseller, not Apple. Apple's warranty will only cover Apple products (duh). BTW: I troubleshoot Macs all day, and the use of bad RAM can cause quite a few "weird" problems... finding out if there is additional RAM is an easy step to take, because it can be removed with little effort over the phone, and it if the machine works fine afterwards, then all the customer has to do is talk to the RAM supplier.
Also, given the limited info that's available, it would appear that the policy targeted in the original post refers to machines not experiencing hardware failure. Instead, it seems to refer to computers that are being returned while in fine working order. As stated in other replies, the policy makes sense since re-selling the CTO unit as a refurb would be cost-prohibitive.
Get an attorney and seek a "trial de novo" in a "real" court. The Apple Co, cannot disclaim two of the implied warranties (fitness for an intended purpose and merchantability) for a certain period after purchase.
MOVE NOW!
Written on a 12" pBook
I ran into that very issue. However, I did not order my computer from the website, I talked to a rep on the phone who neglected to tell me of this policy. The coup de gras is that the when I approached Apple, they claimed that since it was on their website, I was informed. Apple is an extreme case of excellent engineering thwarted by arrogant and worthless management.
Well, knowing my experience with Dell and Fujitsu, anything you change from what they offer on the website is considered custom.
I bought my Dell a long time ago, but I remember fujitsu's. When I opped to have more memory installed, there was a disclaimer on the bottom stating that it's a custom configuration and that returns are not possible [cash return].
Just think of it as some assembly line piecing the same ol stuff together [or several highly trained monkeys]. Once someone asks for something different, it'd have to go to a different person who knows what needs to be done.
Easy example, go to one of Dell's offered PCs that go for a few hundred. Once you touch anything in the configuration menu, that price will jump up! Even if you switch it back to the original configuration!
The moment you changed the basic config, the computer became custom config, something that the customer (you) specified. What is so hard to understand here?
Did you have problems with the computer? If not, I have to side with Apple on this one. If you have had a problem, and Apple had refused to deal with your problem, then Apple would have been wrong. Judging by the court's decision, probably Apple is right.
This was small claims court... not a big precedent.. and the result is not surprising.
.. it's a valid question.
First.. before you state "Oh, everyone else takes them back!"... With the exception of certain types of items in certain states, like cars, homes, etc... the sale of a consumer item is automatically final unless stated otherwise. I'm not talking about implied warrantees or anything like that... obviously if the thing you bought was sold under false pretense, or misrepresented, or is just plain broken, the retailer must take it back.
If, however, the device was sold properly, and functions as it was supposed to, the retailer is under no obligation to take it back. If I sell you something at the grocery store, I don't have to take a returned item just because you didn't open it.
Now, as a matter of good customer service, most large vendors DO take unopened returns... the cost to them is minimal, and it generates goodwill...
At issue here was whether apple's own policy was being violated.
Apple's support people are some of the best I've ever seen once you get past the 'warm body' level. Apple like everyone else is dealing with uncountable swarms of people who are unable to read dialog boxes.
Frankly though, if you spend the time looking through Apple's knowledge base, don't find a fix and call them (and explain the steps you've performed) you'll move 'up the ladder' much more quickly.