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(My Fox Houston)   Not News: Furniture store holds promotion that if you spend more than $6,000 you get your money back if Seattle wins the Super Bowl. Fark: Store refunds over $7 Million back to customers   (myfoxhouston.com) divider line 127
    More: Fail, Super Bowl, Seattle, refunds, furniture  
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12432 clicks; posted to Main » on 03 Feb 2014 at 10:19 AM (37 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-02-03 02:07:49 PM  

umad: lennavan: umad: RTFA. $7 million is not "free".

I am shocked that this thread is filled with such financial ignorance.

/not really

Says the guy who thinks this cost the store $7 million?

The promotion and the bet cost Mattress Mac something like $2-3 million.

Then I take it back. $2-3 million is totally the same thing as free. Tard.


You think he paid $2-3 million to the news station to cover this?  One of us is a tard, that's for sure.
 
2014-02-03 02:07:54 PM  

TheDirtyNacho: So he's paying for all these news stories, fark threads and countless discussions taking place around Houston?

Someone's ignorant here, but it's not me.


These news stories, fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."
 
2014-02-03 02:11:17 PM  
umad:  fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."

Wait, McDonalds gives away happy meal toys for free to the vast majority of people and pays for it by charging advertisers?

I always thought you had to buy a happy meal to get one.
 
2014-02-03 02:11:32 PM  

lennavan: You think he paid $2-3 million to the news station to cover this?


No, because I'm not farking retarded like you are. The news stations wouldn't be saying shiat if he didn't spend $2-3 million. It doesn't matter that he didn't give it to them. He still had to spend it before they would give him all of this "free" advertising.
 
2014-02-03 02:12:37 PM  

lennavan: umad:  fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."

Wait, McDonalds gives away happy meal toys for free to the vast majority of people and pays for it by charging advertisers?

I always thought you had to buy a happy meal to get one.


You ordered your happy meal. Not the toy. The toy was "free".
 
2014-02-03 02:15:14 PM  
The Mac's Daughters
img.fark.net
 
2014-02-03 02:22:30 PM  
Yeah, let's be sure and have a thread when he goes out of business.  Or when subby opens a business.  I'm betting we'll never see either of those threads.
 
2014-02-03 02:23:32 PM  

umad: lennavan: You think he paid $2-3 million to the news station to cover this?

No


How much do you think he paid the news station to cover this then?

umad: It doesn't matter that he didn't give it to them. He still had to spend it before they would give him all of this "free" advertising.


So what you are saying is he paid nothing to the news stations for this advertising.  Would you summarize that as "free" advertising?

umad: No


Okay, you're stupid.
 
2014-02-03 02:24:08 PM  

umad: lennavan: umad:  fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."

Wait, McDonalds gives away happy meal toys for free to the vast majority of people and pays for it by charging advertisers?

I always thought you had to buy a happy meal to get one.

You ordered your happy meal. Not the toy. The toy was "free".


Oh, so you ordered fark?  How much did you pay?
 
2014-02-03 02:25:30 PM  

lennavan: Would you summarize that as "free" advertising?


No, because as I said. I'm not a farking retard like you are.
 
2014-02-03 02:27:28 PM  
Let's see, he has a promotion that grosses 7 million in 2 weeks.  Let's see what the next promotion grosses after non-stop national promotion for this one.

He'll probably run out of inventory.
 
2014-02-03 02:38:09 PM  
Sounds like submittard is th3 fail
 
2014-02-03 02:41:36 PM  

umad: lennavan: Would you summarize that as "free" advertising?

No


Oh, well if it wasn't free, how much did he give to the news to pay for the advertising?

umad: he didn't give it to them.


Ah.

umad: I'm not a farking retard


Right.
 
2014-02-03 02:56:32 PM  
Wow, people pay a lot for furniture!
 
2014-02-03 02:58:55 PM  
He only offered it if one team won.  My guess is that he teased the spread to even money and put a shiatload on Seattle to win with a Vegas sports book, thus offsetting any loss he would incur at his business.  He made a profit on it, trust me.

If I needed to furnish my house, that's what I would have done, only with Denver as a hedge.
 
2014-02-03 03:27:54 PM  

kaduh: He only offered it if one team won.  My guess is that he teased the spread to even money and put a shiatload on Seattle to win with a Vegas sports book, thus offsetting any loss he would incur at his business.  He made a profit on it, trust me.

If I needed to furnish my house, that's what I would have done, only with Denver as a hedge.


He really wouldn't even need to tease it. He could have easily put big money on Seattle +2.5, hoped for a close loss by the Hawks and one sweet freaking middle
 
2014-02-03 03:36:45 PM  
No Insurance?  damn stupid guy.

That said i would have liked to see his reactions as the Super bowl unfolded.
 
2014-02-03 04:08:29 PM  

Pelvic Splanchnic Ganglion: There are insurance companies who will sell coverage to cover gambling losses?


You can buy insurance to cover any risk.
 
2014-02-03 04:41:48 PM  

grimlock1972: No Insurance?  damn stupid guy.

That said i would have liked to see his reactions as the Super bowl unfolded.


Well who doesn't enjoy some healthy schadenfreude.
 
2014-02-03 06:25:01 PM  

brobdiggy: Assuming no insurance, this IS a big fail , and here's why:

Furniture isn't something you buy often.  It's not like gas and groceries.  During this promotion, a whole bunch of people (who had been putting off buying furniture for a while) decided to buy a bunch (knowing that they would eventually need it anyway).  They bought now only because of the probability of getting it free.  (If Seattel would have lost, many would have tried to return the furniture or quit making payments on it.... but maybe Mac had "insurance" such as pay-up-front, no financing, no returns)...

But Seattle won... the result is that even if the customers "like" the furniture, most of the customers will not buy furniture again for 10 years.  Also, if they're the type of people that only bought from him due to the promotion, they'll buy the furniture somewhere cheaper next time anyway.

He took a loss.  I highly doubt this promotion gained him any new customers.  It only gained people who will try to take advantage of his next fail promotion, which will once again be a huge loss for him.


I think the most foolish part was doing this in the two weeks between the championship game and the Superbowl itself, consider how dominant Seattle looked most of this year.  This is the kind of promotion you're better off running at the start of the year before we can tell who is for real and who sucks (although that would also get less sales)

  Anyway, as for a loss of potential future customers, it probably isn't as bad as you think, because if you do the math, it was at most approximately 1167 customers ($7mil / $6k minimum purchase).  That's 1167 furniture sales in the Houston area, the 4th largest city, and 5th largest metropolitan areas in the U.S, with over 6 million people.  And depending on what people were buying, $6k in many cases will only cover 1 room, maybe 2.
 
2014-02-03 07:44:22 PM  

sigdiamond2000: "Mattress Mac doesn't believe in insurance. He considers it a form of gambling."


which betting on sports totally isn't
 
2014-02-03 10:17:39 PM  

SilentStrider: and if the moron had bought insurance, he could actually make more of a profit. instead, he's in the hole


If you have the capital to risk, self-insurance can be significantly cheaper than going to an underwriter.

There are 32 teams in the NFL.   So the odds of the Seahawks winning at the beginning of the season were roughly 1/32.... so the probability of him losing the insurance premium were around 97%.   That adds up over time.
 
2014-02-03 10:21:32 PM  

Rising_Zan_Samurai_Gunman: And depending on what people were buying, $6k in many cases will only cover 1 room, maybe 2.


If you're talking high-end designer furniture, you can easily spend $6000 on a single piece.
 
2014-02-04 12:30:16 AM  

grimlock1972: No Insurance?  damn stupid guy.



Why?

If you can afford it you will come out ahead in the long term by not having insurance. I used to work for a major retailer and I know for a fact they didn't have insurance for any of their stores except for the legally required public liability insurance. If a store burns down, they pay for it to be rebuilt. But they save so much money each and every year in not paying insurance premiums, multiplied by the number of stores they had, that if they have to pay for the odd rebuilding they still come out way ahead.
They are just doing exactly what an insurance company does, except they are keeping all the profit themselves.

Even Walmart does it in many areas. Are you calling them "damn stupid"?

As I posted earlier, over the long term you will lose more by having insurance. Insurers work out the odds and set the premium to ensure they always make a profit. The premiums for a 50/50 event would be more than 50% of the total sum insured, so over say four years assuming he loses half the time the figures would look like this:

Without insurance.
Year 1 lose $7m
Year 2 win, no loss.
Year 3 lose $7m
Year 4 win, no loss.
Total expense for promotion $14 million

With insurance.
Year 1 lose pay $4million insurance premium.
Year 2 win,pay $4million insurance premium.
Year 3 lose, pay $4million insurance premium.
Year 4 win, pay $4million insurance premium.
Total expense for promotion $16 million

By having insurance you are $2 million dollars worse off. (Those figures are at retail of course. His actual costs would have been far lower.)
 
2014-02-04 09:06:24 AM  
Consider this: this promotion just got a BBC story about it.  $2-$3 Million for worldwide coverage of how good of a sport you are?  That's a freaking bargain.

And considering how he's the biggest furniture retailer in the Houston area, $2-$3 million really isn't much for him considering the return.  ESPECIALLY considering the return.
 
2014-02-04 11:46:56 AM  
Flint Ironstag: grimlock1972: No Insurance?  damn stupid guy.

Why?

If you can afford it you will come out ahead in the long term by not having insurance. I used to work for a major retailer and I know for a fact they didn't have insurance for any of their stores except for the legally required public liability insurance. If a store burns down, they pay for it to be rebuilt. But they save so much money each and every year in not paying insurance premiums, multiplied by the number of stores they had, that if they have to pay for the odd rebuilding they still come out way ahead.
They are just doing exactly what an insurance company does, except they are keeping all the profit themselves.

Even Walmart does it in many areas. Are you calling them "damn stupid"?

As I posted earlier, over the long term you will lose more by having insurance. Insurers work out the odds and set the premium to ensure they always make a profit. The premiums for a 50/50 event would be more than 50% of the total sum insured, so over say four years assuming he loses half the time the figures would look like this:

Without insurance.
Year 1 lose $7m
Year 2 win, no loss.
Year 3 lose $7m
Year 4 win, no loss.
Total expense for promotion $14 million

With insurance.
Year 1 lose pay $4million insurance premium.
Year 2 win,pay $4million insurance premium.
+ 3 million profit = 1 million loss
Year 3 lose, pay $4million insurance premium.
Year 4 win, pay $4million insurance premium
. + 3 million profit = 1 million loss
Total expense for promotion $16 million10 million

By having insurance you are $2 million dollars worse better off. (Those figures are at retail of course. His actual costs would have been far lower.)


I don't disagree with your premise that buying insurance costs more.  Just adjusting the formula a little.  Don't know how much profit Mac makes, but the thread consensus seems to be 2-3 million on 7 million in sales.  The actual number will determine where you end up.

Obviously it does or insurance companies wouldn't be profitable.  It does offer the convenience of spreading out damage payments over time.  Much like a mortgage, you're paying not to get hit all at once.
 
2014-02-04 04:34:39 PM  

bigghigg: Flint Ironstag: grimlock1972: No Insurance?  damn stupid guy.

Why?

If you can afford it you will come out ahead in the long term by not having insurance. I used to work for a major retailer and I know for a fact they didn't have insurance for any of their stores except for the legally required public liability insurance. If a store burns down, they pay for it to be rebuilt. But they save so much money each and every year in not paying insurance premiums, multiplied by the number of stores they had, that if they have to pay for the odd rebuilding they still come out way ahead.
They are just doing exactly what an insurance company does, except they are keeping all the profit themselves.

Even Walmart does it in many areas. Are you calling them "damn stupid"?

As I posted earlier, over the long term you will lose more by having insurance. Insurers work out the odds and set the premium to ensure they always make a profit. The premiums for a 50/50 event would be more than 50% of the total sum insured, so over say four years assuming he loses half the time the figures would look like this:

Without insurance.
Year 1 lose $7m
Year 2 win, no loss.
Year 3 lose $7m
Year 4 win, no loss.
Total expense for promotion $14 million

With insurance.
Year 1 lose pay $4million insurance premium.
Year 2 win,pay $4million insurance premium. + 3 million profit = 1 million loss
Year 3 lose, pay $4million insurance premium.
Year 4 win, pay $4million insurance premium. + 3 million profit = 1 million loss
Total expense for promotion $16 million10 million

By having insurance you are $2 million dollars worse better off. (Those figures are at retail of course. His actual costs would have been far lower.)


I don't disagree with your premise that buying insurance costs more.  Just adjusting the formula a little.  Don't know how much profit Mac makes, but the thread consensus seems to be 2-3 million on 7 million in sales.  The actual number will determine where you end up.



You can't just add the profit to one without the other. Revised your way the actual figures would be:

Without insurance.
Year 1 lose $4million (The actual cost of the furniture given away)
Year 2 win, profit of $3 million.
Year 3 lose$4million (The actual cost of the furniture given away)
Year 4 win, profit of $3 million.
Total expense for promotion $14 million $2 million.

With insurance.
Year 1 lose pay $4million insurance premium, make $3million profit, result $1million loss.
Year 2 win,pay $4million insurance premium. + 3 million profit = 1 million loss
Year 3 lose, pay $4million insurance premium, make $3million profit, result $1million loss.
Year 4 win, pay $4million insurance premium. + 3 million profit = 1 million loss
Total expense for promotion $16 million10 million $4 million.
 
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