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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
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).
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.
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
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.
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
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
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