Apple Reverses iPad "No Cash Purchase" Policy

ZipK writes "After a few days of bad publicity, Apple has reversed its no cash purchase policy, explaining that the policy was originally implemented to limit the number of iPads an individual could buy during the introductory period of short supply. Now that supply has caught up with demand — and the story has hit front pages and gained national attention — Apple has reversed its policy, and taken the opportunity to put a bow on the story by giving the formerly scorned Diane Campbell a free iPad."

Comments

class act

[frnic]

class act...

Re:class act

[sopssa]

The policy was mean to discourage people from purchasing a lot of iPads and then reselling them for profit

What's wrong with that? Shouldn't a person be allowed to sell his device at the price he wants to?

Re:class act

[node 3]

The policy was mean to discourage people from purchasing a lot of iPads and then reselling them for profit

What's wrong with that? Shouldn't a person be allowed to sell his device at the price he wants to?

Reading comprehension failure. aristotle-dude said "lots of iPads", not "his device". There's a difference.

Apple wants to get the iPad into people's hands as quickly as possible. By limiting the number of purchases to two, this helps prevent people from walking in and buying out the store (remember that bitch who bought the #1 spot in line in order to buy out the entire stock so she could resell them? How is that fair to the people behind her who waited hours?).

Honest people who want an iPad, who sign up on a waiting list don't deserve to be fucked over by opportunists. What's worse, they stand to be fucked over twice. Once by not being able to buy an iPad from Apple, and once again by having to resort to an iPad "scalper" with inflated prices.

But to answer your straw man, yes, a person is allowed to sell their device at any price they can get. Apple does nothing to prevent this. You are absolutely free to buy two iPads and sell them both.

Re:class act

[99BottlesOfBeerInMyF]

They limit sales to two per customer,

So I'll use multiple credit cards then. I've got 6 or 7 of them, so I could get 12 or 14 iPads. Again their reasoning makes little sense when closely examined.

Okay, then you have 12 or 14 of them and you have to deal with paying 6 or 7 different bills and you've made a small profit while having driven around to a bunch of different shops or risked your credit card by loaning it to someone to make purchases on your behalf. Congrats. That's still a lot harder than sitting outside an Apple store and paying a bunch of people $20 each to go buy 2 iPads then reselling them and making an easy profit while scalping the average person.

This isn't some lock-down method or they're be requiring your SSN or driver's license number. It's just a way to make it harder and less common so it is not a big problem for normal people. This isn't even an unusual business practice, it's only getting press because anything having to do with the iPad gets readers right now. Next there will be an article about how iPads can't be modded to run radio stations or "Apple" will send the FCC to arrest you.

Re:class act

[node 3]

you're correct. Apple doesn't want anyone reselling for profit other than themselves, and neither do the ticket sellers (and their distributors).

So really, both situations are damn straight that this was a horrible call by apple.

In what universe is adding more middle-men better for the consumer? Scalpers raise ticket prices without adding anything of value, except being able to buy tickets after an event has sold out. This isn't terribly bad so long as scalping is kept down to a minimum. But what if there were no rules in place to limit scalping? What's to stop someone from buying every single ticket, then selling them at double the price? How is that good for anyone?

You absolutely cannot stop people from reselling crap they buy, whether with licenses, contracts, or agreements.

That's not true, although that's also irrelevant, as Apple doesn't stop anyone from selling their iPad.

Linking to an ID thing just meant that you'd have to have multiple people buy the products for you.

Only if you're an opportunistic slime who wants to take an iPad out of the hands of honest people to later sell to them at a large mark-up. It makes your job harder (you'll get no sympathy from me), but it also limits you by your ability to gather up people to buy iPads and pay them to do so, increasing both effort and cost which will certainly diminish the amount of iPad scalping going on.

In either case, Apple's current two iPad limit overall helps the consumer.

Re:class act

[BobMcD]

Apple wants to get the iPad into people's hands as quickly as possible. By limiting the number of purchases to two, this helps prevent people from walking in and buying out the store (remember that bitch who bought the #1 spot in line in order to buy out the entire stock so she could resell them? How is that fair to the people behind her who waited hours?).

Honest people who want an iPad, who sign up on a waiting list don't deserve to be fucked over by opportunists. What's worse, they stand to be fucked over twice. Once by not being able to buy an iPad from Apple, and once again by having to resort to an iPad "scalper" with inflated prices.

But to answer your straw man, yes, a person is allowed to sell their device at any price they can get. Apple does nothing to prevent this. You are absolutely free to buy two iPads and sell them both.

This rabbit hole goes so deeply away from the light of sound logic that I almost hesistate to peer too deeply into it - but here goes nothing:

Apple wants to get the iPad into people's hands as quickly as possible.

What are the 'scalpers' going to do with the iPads, except resell them? Do they make good wall paneling or something?

How is that fair to the people behind her who waited hours?

How is two any more or less fair to the last guy in line than twenty would have been? Limited quantities are limited. Someone isn't going to get one on the first day.

Honest people who want an iPad, who sign up on a waiting list don't deserve to be fucked over by opportunists.

I'm make an Apple-early-adopter joke here, but you seem like a fanboy, so...

It seems the answer here would be to increase production, or buy from a vendor that doesn't contribute to artificial supply problems.

Likewise, the consumer could just opt to not buy one on that day, if the scalper bought too many and/or their new price is too high.

Further, this would all be the fault of the retailer, and should have nothing whatsoever to do with the manufacturer.

Apple does nothing to prevent this.

If they're not doing anything, why the restriction? Are we to assume that scalpers don't/can't hire people to stand in line with pre-paid debit cards?

As I said initially, your logic seems sound but that only lends to the danger of the psychosis hiding within...

Re:class act

[node 3]

>>>They limit sales to two per customer,

So I'll use multiple credit cards then. I've got 6 or 7 of them, so I could get 12 or 14 iPads.

And 6 or 7 names and addresses? And even so, it doesn't matter if a few people get around the limits. What matters is the overall effect, and there can be no doubt that this has helped keep iPad scalping down to a minimum.

Again their reasoning makes little sense when closely examined.

No, it's your reasoning which has failed you. Apple doesn't have to completely stamp out scalping to be effective.

Re:class act

[newcastlejon]

Well, it's just the never-ending story of Apple wanting to control everything.

Never-ending myth, you mean.

You can't say it's a myth any more than the parent can say otherwise; I doubt very much that private discussions between board members are made public. Might be sinister, might not be, but don't think Hanlon's razor will prove or disprove anything.

Not only controlling all the applications

Apple doesn't control "all the applications".

Don't they? If you want to use your iPhone and keep the warranty then you have to use the App Store; all the apps that are there Apple put there.

and what you can do with the device

Nor do they control what you can do with the device.

In both cases, they only mark certain things as "off limits". This is no more controlling than saying the government controls what you can drive and where you can go, since they outlaw certain vehicles and some roads are toll roads, closed roads, or one-way streets.

Semantics. Coercion is a form of control and losing my warranty is frankly disincentive enough for me not to jailbreak my phone. As for the governent deciding what cars may be legally driven on roads how could this not be a form of control? The gov't is quite capable of closing a road and preventing me from driving on if they felt the need. Please tell me what you mean by control.

but controlling if you are allowed sell your device too?

Apple controls this in no way whatsoever. You are 100% free to sell your iPad to whomever for for whatever price you wish.

With you 100% here. Even Apple aren't stupid enough to make a move in this direction.

Everyone always says Apple is not a monopoly

Because they are not.

They are quite tall (vertical) but this doesn't seem like a monopoly to me either

but exactly how is this good for the market or people?

Since it's not true, it doesn't matter one way or the other.

You don't need to be a monopoly to abuse customers.

This is true, although irrelevant, as Apple aren't abusing their customers.

Both points are debateable; I fail to see why you seem so certain yourself. Still, words like abuse are far too loaded for me to even debate - there seems little point in arguing over an opinion anyway. That and I need to get to the corner shop before it closes.

Ta ta, J.

Re:class act

[clone53421]

No, actually, research it; you’ll find that I’m right.

Debt is not created during a sale. Until you pay for something, it belongs to the store, and if you decided to walk out with it without paying you wouldn’t be walking out with a debt, you’d be walking out with a stolen item.

Re:class act

[BobMcD]

Droll, but doesn't address the point. Apple does not control all the apps for the iPhone, nor to they control what you can do with it.

Except wherein they do. Or can I play Flash games on it now, for example?

I'm pretty certain there exists an 'approval process', a 'development SDK', etc. If you're making the case that these do not exist, please don't bother to reply. If you're making the case that they're not successful, please understand that this isn't terribly relevant. If you're making the case that they aren't necessary, and that an average user will custom build their own apps on a jailbroken device... well you get the point.

Re:class act

[Kreigaffe]

In what universe is adding more middle-men better for the consumer? Scalpers raise ticket prices without adding anything of value, except being able to buy tickets after an event has sold out. This isn't terribly bad so long as scalping is kept down to a minimum. But what if there were no rules in place to limit scalping? What's to stop someone from buying every single ticket, then selling them at double the price? How is that good for anyone?

If people wouldn't pay those prices, they'd very quickly go out of business. If people will pay those prices, the venue probably should raise some/all of the ticket prices to match what the market will support. Higher ticket prices would actually FORCE OUT scalpers -- buy a $30 ticket, resell for $100, that's a good profit margin, that's what keeps scalpers afloat. Buy a $100 ticket that will only sell on the open market for $100, MAYBE $110? I'd love to see scalpers find the profit there.

Re:class act

[Mister Whirly]

Maybe if demand was that high, Apple should have either- 1) Charged more or 2) Made more before selling them. Apple makes the same amount of profit per unit whether one or several million people buy them so why should they care at all? Now not only does Apple want to control your software and hardware choices, they also want to mess with the laws of economy as well. Oh Steve Jobs, what won't you try to control?

Re:class act

[clone53421]

The demand wasn’t that high. Speculators would have bought up all of the supply, using an artificial demand to create an artificial scarcity and then trying to sell them for a higher price once they were scarce.

You may then ask – well shouldn’t Apple just charge more then? – in fact, you did ask that.

No; because if every speculator were able to buy 50, they might create an artificial scarcity, but the scarcity would drive up the price, the demand would go down, and many of the speculators would be stuck with products that nobody would buy for the prices they asked, driving the price right back down to where it started – or even below it. Net result? A few speculators might make money, but most of the people who wanted an iPad would have to wait for the black-market price to come down to something more reasonable. Since Apple doesn’t want speculators profiting off of its R&D on its product, and Apple doesn’t want its customers being forced to pay high prices or wait, it’s a lose-lose for them to allow this sort of thing... so they don’t.

Apple sets the price so that they can make the highest profit. Not highest profit per sale, but overall. If they priced it higher, they wouldn’t sell as many; if they priced it lower, they’d sell more. Speculators hoarding the products screw up this system and Apple wants to prevent that.

Re:class act

[Cramer]

remember that bitch who bought the #1 spot in line in order to buy out the entire stock so she could resell them? How is that fair to the people behind her who waited hours?

Simple. Apple should have learned how to do business by people who've been doing it long before Apple existed... Limit two (2) per person, per purchase . Grocery stores and Walmarts all across the land have been doing this for decades. You can buy as many as you want... 2 at a time. On launch day, that would equate to exactly two -- by the time you got back to the counter the second time, there wouldn't be any left.

Re:class act

[Kreigaffe]

They're already getting screwed. If a concert venue has 10,000 seats, and 10,000 people are willing to pay $100 each to get in... well, money talks. It's sad that someone who can't afford $100 to get in is not able to get in but that's a hell of a lot more fair than tickets being "$30" but some middle man siphoning out $70 a ticket, the person with only 30 bucks still not getting in, and the venue only making the profits of $30 tickets.

Re:class act

[Kreigaffe]

Uhm, it wouldn't force anyone out. These places sell out, or near enough, with a huge percentage of tickets going through a middle-man. Why should the middle man make profit in the first place? Raise the prices, and the people who buy tickets will buy them from you (since there's practically no room left for a middleman to make profit).

The concert-goers wind up paying the same amount of money per ticket, but more of that money goes towards the venue (and the act / artist(s)!).

It's not like concerts half-sell. If only 11,112 customers could afford $100 tickets, that's legit, but that would also mean scalpers would only be selling 11,112 tickets. That leaves the rest to either be purchased by customers for $30, or purchased by the middleman and eaten as a loss to support their higher ticket prices.

Re:class act

[Cramer]

You put that number on file with them; you know it's on file with them. That is a very different situation from storing the number at the point-of-sale without permission. Swiping my card at the register is not permission -- and the PCI rules are very clear on this point. Do you really think Apple is one-way hashing your CC number? I seriously doubt it.

Ah, how quickly people forget the TJ Max fuckup. They were storing every CC number from every transaction as well.

Re:class act

[bennomatic]

Again no offense Apple Fanboys, old Steve does have good taste, but you have to admit for old Steve it has always been

While I'm a happy user of Apple products, I don't think of myself as a fanboy. But some folks here on /. do classify me as such, so I'll respond in kind for purposes of this post:

Your comments about SJ's need for control are absolutely on the mark and correct, and don't seem to be insulting or judgemental at all. You correctly cite that it's just how he does things in order to create the products he wants to create. And he's got legions of fans because the appreciate his work.

Apple products aren't for everyone, and that's fine. I wish more people who didn't like them took your view: "not my cuppa tea, I'm not going to buy them", rather than "Steve Jobs is a Nazi Hitler Obama!" or some such.

What amazes me is the Apple fanboys aren't pushing for Steve to name a successor

This is probably because they (we?) know that there's nobody who quite shares his vision. If one could graft Tim Cook's head with Jonny Ive's soul, you'd get something close. But to name anybody (publicly) today would cause rioting in the streets.

And don't forget, we're all one screech of the brakes away from pushing daisies. Jobs could name anyone tomorrow, and then end up outliving him or her by a decade. But just because such a declaration hasn't been made publicly, don't think that there isn't a flash drive somewhere with SJ's wishes stored securely. Succession planning is key to any company's longevity, and I'll bet that Jobs already knows, and has already communicated to at least a couple of core members of the board, who he feels is best suited for the Job.

Re:class act

[v1]

What's wrong with that? Shouldn't a person be allowed to sell his device at the price he wants to?

It's like ticket scalping. When you have greater demand than supply and are being a benevolent supplier and not jacking up your prices to agree with demand, scalpers move in and attempt to buy you out. Then they turn around and start selling your goods at or above their true market price, much above what they paid for them. Your customers that you are trying to be benevolent to are now unable to buy from you because you're out of stock, and are forced to pay in blood to the scalpers. In the end the consumers receive no benefit, the suppliers take a loss they were expecting but without the benefit of customer good-will they were intending on buying with it, and the scalpers walk away with money for nothing.

The only two ways to discourage this is to (1) not discount your goods or use a mail-in-rebate strategy so there's no market for the scalpers, or (2) take some sort of technological method of either making the scalping impossible or impractical. (such as by limiting the number of units sold to a given credit card number) #2 has been done for the last several years for sports game tickets, and while it's not entirely effective, it does a pretty good job. It does require the purchaser have a credit card, and for a (usually very small) percentage of customers that is a problem, but when you consider the huge percentage of customers that would otherwise have been shafted, it's a very reasonable tradeoff.

Re:class act

[bennomatic]

Are we to assume that scalpers don't/can't hire people to stand in line with pre-paid debit cards?

You're absolutely right. As such, this story could be summed up as: Breaking news! Apple does something mildly inconvenient to a handful of people and people who hate Apple anyway freak out and use it as an excuse to post vitriolic diatribe throughout the Internets!

I mean, really, who carries $500 in cash anymore? Could they have done a better job with this to avoid PR flack? Yes. Is it silly and annoying to refuse cash? Yes. Why did they do it? They probably found that there were scenarios where one person sent out dozens of people with a given card (i.e. copies of their personal card, or a business card) and had them buy out stock.

It's certainly possible that this was just a pure and simple bone-headed maneuver, but it's equally likely, in my book, that it was a decision based on one or more experiences that they wished to avoid repeating.

Re:class act

[H0D_G]

For those playing along, the economic concept here is price elasticity of demand.

Black market?

[Dan East]

Can someone explain how using a debit or credit card to purchase an iPad prevents the buyer from reselling it? And how is that considered the "black market"?

Re:Black market?

[clone53421]

No.

Artificial scarcity is what happens when a few people buy up all the real product, artificially inflating the demand.

Telling people “no, we only have enough real products for you to buy two, sorry” is an example of real scarcity, not artificial scarcity.

Re:Black market?

[kent_eh]

Telling people “no, we only have enough real products for you to buy two, sorry” is an example of real scarcity, not artificial scarcity.

Only if they are honest.
You believe everything the nice corporate retailer tells you, don't you.

Re:it works!

[CannonballHead]

The moral is: if you cause enough bad publicity for a company, you get free stuff.

This note is legal tender

[54mc]

for all debts, public and private. Oh, except debts to apple.

Re:This note is legal tender

[zelbinion]

Right, that's just what I thought. It is even legal for Apple to refuse payment in cash? I can understand businesses not taking checks, credit cards, debit cards, etc. however not taking CASH? That smacks of a federal crime or something....

Amazing how bad PR always helps Apple get it right

[ravenspear]

I've lost count of the number of times I've seen this pattern in the last few months/years, especially as it relates to the iPhone OS devices.

1. Apple does something really dumb
2. They get bad press for it
3. A higher up at Apple goes "yeah, now that I think about it, that is really dumb"
4. Apple reverses the policy to something not dumb

It seems to me that maybe Apple should look at how they are formulating these dumb policies and see if they can get it right the first time.

Now before I get modded down by the fanbois, let me just say that I own an iMac and an iPhone and generally like Apple products. Yet I simply have to admit that it seems they've had a serious injection of dumbness of late.

Re:Amazing how bad PR always helps Apple get it ri

[RightSaidFred99]

This wasn't a dumb move, and this isn't bad press. They tried to make it look like the iPad was in such MONSTER demand that they wouldn't take cash. Then there was press, some moderately bad (Apple won't take cash), but mostly in their minds good (their iPad is selling like such hot cakes that they want to slow it down by not taking cash). Seriously, this late in the game who could possible be convinced people are still buying 50 iPads at a time and selling them at a markup?

It's stupid marketing done by stupid people targeting stupid people.

Re:Amazing how bad PR always helps Apple get it ri

[gyrogeerloose]

That's how it's done in the real world: Make a policy that seems reasonable at the time, have something unforeseen pop up to show that maybe it's not as reasonable as you originally thought, re-think and change that policy to something that is.

While Apple's policy was not a good idea, at least they were able to see that and be flexible enough to change it. It's just too bad for them that they had to get a black eye in order to recognize it was bad policy to begin with.

Re:Amazing how bad PR always helps Apple get it ri

[StormReaver]

Stupid stuff like this is why I will never buy any Apple products.

Ever.

It took too many years to get rid of one abusive corporate monopolist, and I'm not about to surrender my hard-earned freedom to another corporate monopolist wannabe.