Sylvia Corcoran, center, asks a question of Sears salesperson Marian Pani. Corcoran and others took advantage of the federal cash for appliances program at a Chicago Sears store. (Alex Garcia/Tribune)
By Sandra M. Jones | The cash-for-appliances program that started at 8 a.m. in Illinois had
gone through half of its $6.5 million funds by noon, according to
officials.
The Illinois Retail Merchants Association reported more than $3 million
in the 15-percent appliance rebates was spent in the first four hours,
translating into more than $20 million in appliance sales.
“By late afternoon, we could be out of money,” said David Vite,
president of the trade group, which is administering the program.
Shoppers showed up at Abt Electronics in Glenview with their lawn chairs starting at 4:15 a.m., said Mike Abt, president of the family run appliance superstore. Abt opened at 7 a.m., an hour earlier than normal. By 10:30, the retailer had reached its biggest volume sales day ever, he said.
“There was a line around the building of people waiting to get in,” said Abt. “I haven’t seen that since 1975 when (Blackhawk players) Bobby Hull and Tony Esposito were here signing hockey sticks.”
Some small downstate independent dealers reported selling a week’s worth of appliances in the first two hours, Vite said.
There are 670 stores in Illinois competing for the 15 percent rebates for energy-efficient refrigerators, dishwashers and other appliances — part of a federal stimulus program aimed at reviving the recession-battered appliance business.
Arizona and Iowa went through their cash-for-appliances money in a matter of hours.
Illinois is one of the few states that is putting the onus on retailers to front the rebate money to customers and then get reimbursed by the state later. That strategy makes it easy for consumers but hard on merchants. No retailer wants to be stuck offering a discount after the cash-for-appliance till is empty.
“We haven’t seen this situation before,” said Doug Moore, president of appliances at Sears Holdings Corp. in Hoffman Estates. “It’s really not our money and we’re not in a position to be a bank. When the money runs out in the state, it’s similar to a Black Friday special. When you have 100 TVs available and you run out, that’s it.”
Sears, the nation’s largest seller of appliances, is hoping the state rebate program will drive business to its stores beyond the initial program. Sears opened its doors at 6 a.m. and is offering an additional 30 percent discount. The retailer sells about one in three appliances in
the U.S., down from about 40 percent a decade ago, as Lowe’s, Home Depot and Best Buy entered the market. All three are among the retailers participating in the program.
At the Sears Roebuck & Co. store at Six Corners on the Northwest Side, five people were in line waiting for the store to open at 6 a.m.
George Klein of Chicago got there early because he was afraid the money would run out.
“Absolutely. I heard it was a limited amount of money,” he said. Officials have warned the money may be gone as soon as this weekend.
Since the federal government created the program last year as part of the American Recovery and Reinvestment Act, each state set the rules for how to hand out its portion of the $300 million available nationally.
After watching Iowa and Arizona, Illinois decided to create rebate rules to make sure a wider swath of consumers will get a shot at savings. The rules were being revised as recently as last week as state officials tried to balance the local mandate to make the program consumer friendly with the complicated logistics of letting hundreds of retailers know in real time when the funds have run out.
The Illinois Retail Merchants Association, the trade group that has acted as the go-between for retailers and the Illinois Department of Commerce and Economic Opportunity running the program, is charged with keeping track of the funds and reporting back to Illinois retailers
every two hours. Appliance retailers accounting for 60 percent of the market agreed to provide the trade group with regular sales updates throughout each day, through Sunday night.
Last week 152 retailers voiced their concerns during a lengthy Web conference call hosted by the trade group. The feedback prompted the state to make several last-minute changes to the rules, including limiting the order-taking to between 8 a.m. and 9 p.m., and stretching the delivery date deadline to May 28 from May 10.
The state also set a cap of $400 on the 15 percent rebate discount in an effort to make the funds last longer. (If you were planning on buying a $10,000 Sub-Zero refrigerator and saving $1,500, you’re out of luck.)
Shoppers must come into the stores to place their orders, in contrast to other states that took reservations online or over the phone ahead of the sale.
“What we did over the last couple weeks is to try and find ways to slow the burn rate of the dollars,” said the trade group’s president Vite. “The whole purpose of the program is to try to drive sales and to create some demand.”
The 15 percent discount applies to qualifying energy-friendly refrigerators, freezers, dishwashers, washing machines and air conditioners. Consumers also get a $75 mail-in rebate for getting rid of an old refrigerator or freezer, down from $100 the state originally discussed.
The appliance rebate program, which also launches in Texas and Florida on Friday, comes just as appliance sales are starting to show signs of revival, according to NPD Group, a Port Washington, N.Y.-based market research firm.
U.S. appliance sales fell 2.6 percent for the 12 months ended February to $22.2 billion from the same period in 2009, according to NPD. The drop is an improvement from the year earlier, when sales for the 12 months ended February 2009 fell 9.6 percent to $22.8 billion.
More consumers, when they buy new appliances, are replacing them with upgraded models. NPD analyst Mark Delaney said that’s a positive sign, considering the housing market has done little to drive new appliance business.
–Rob Hard contributed to this report
If you want the real deals you should try Grant’s Appliances 2647 North Elston Chicago IL….. They arent a huge chain so they can play with prices a little. I love Grant’s….
Thanks for spending more of my tax dollars!
my wife and i were going to buy a refrigerator and dishwasher due to this rebate, but i went into sears tuesday and saw a much cheaper price of an appliance than when i went into sears on thursday. my wife and i agreed, sears raised the price by 15% or more to take advantage of the gov’t incentive program – thus my wife and i feel no pressure to buy an appliance now considering sears decreased the price by more than the gov’t incentive before and we are pretty sure they will do it again.
i would strongly encourage people to really do their homework before allowing corporations to bamboozle you into thinking you are getting something for a discount but you really are not.
Again, the fools are being fooled by the King (Obama). Look, rebates! OOoooo, shiny things! The last post is correct, prices on appliances jumped about 15-20% at more stores right before this rebate went into effect.
More bones being thrown to the peasants, thanks Barack!
@Joeschmo, Obama did this? I thought it was Blago.
$6.5 million? The state owes the schools $650 million. Illinois owes Medicaid providers $750 million. Total to date, the state of Illinois owes $4.2 billion to real businesses that hire real people right now. You think unemployment is high now, wait 4 months when 20,000 teachers hit the side walks, health care providers that are still in business cut off Medicaid patients, and all of the companies that represent the $4.2 billion shut their doors. Thanks liberals, we’ve done it your way here in Illinois without a Bush to blame. It doesn’t seem to be working out so well.
It may be the case that some retailers have been jacking prices the last few days but some simple research will go a long way. The dishwasher I bought this morning at ABT was the same sale price today as it was three weeks ago when I had researched it. If you subtract the 15% from the government I think I got a pretty good deal. Anyone who blindly walks into the store to buy a major appliance without doing any research and buys something because of the 15% rebate deserves to be ripped off.
I see that some people here still believe it is better to use obsolete appliances that use up loads of America’s energy resources unnecessarily. Apparently, they hate the idea of becoming energy independent from the Middle East. Maybe they figure we still got plenty more boys and girls we can send to fight wars so that we keep the oil flowing from the Middle East.
Instead, Obama is trying to think 10 and 20 years down the road and dial back our energy needs so that we aren’t going to always be dependent on a part of the world that tends to hate us.
I realize this flies in the face of the people who think, why can’t we just keep doing things the way we’ve always done it?
Did you not read the article? This is a state of Illinois rebate – not the federal government.
This is absolutely insane! None of these appliances are made in America. This is a direct subsidy to companies like samsung and ge operating in south east asia.
Illinois lawmakers are utterly incompetent.
They will run out in a few hours – if not half a day. Like everywhere else they made the offer.
Of course the retailers are just going to jack up prices to compensate. There is so much play in pricing (and profit), it’s not even funny. I bought a refrigerator at Sears, which has a “won’t be undersold” policy, which includes internet pricing. I found the fridge cheaper at Abt online, but I forgot to bring the printout with me. I told the salesman what I thought was the Abt price (honestly) but I had mis-remembered by quite a bit, which I realized when I got home and looked at my printout. Sears gave me the discount anyway, and it was over $200 difference. If they are doing that without even having proof of the lower price — well, you can only imagine what kind of profit margin they have. They were trying hard to make me happy because there had been a gigantic delivery fiasco and I was furious over that, but still, I was pretty impressed. However, I know if I went there today, I wouldn’t be getting an extra 15% rebate. They’ve got that all calculated into their pricing, I have no doubt.
paint54, I did read the article. Did you? The program is funded by the Federal Government but each state administers it on their own. See: “Since the federal government created the program last year as part of the American Recovery and Reinvestment Act, each state set the rules for how to hand out its portion of the $300 million available nationally.”
the total dollar savings are not that great unless you are buying a really expensive appliance. Also much of the savings is eaten up by the Illinois sales tax especially if you are in Chicago where the sales tax is 10.5% . Net savings would only be 4.5% . If a person actually needs to replace an appliance this can help but in many cases appliances can be repaired for far less than the cost of a new one. However many consumers are poorly educated about fnances and don’t think through their purchases
LOL, you are correct CW.
We will be seeing stunts like this through the elections as our dear leader tries to buy the votes needed to keep from losing the house and senate.
Why else do you think he has only spent about 1/3 of the stimulus money?
The ones pulling the strings are not stupid.
Hmmm…my tax dollars saved your house from foreclosure and helped you buy that new car in the garage, so I guess it makes sense that my tax dollars should also help you buy that front loading washing machine you REALLY need. Makes perfect sense.
My god — can’t anyone just see things for what they are rather than clouding their vision with politics and insane theories? My experience this morning:
1. Went to ABT
2. Saw washer-dryer I’ve been eyeing for months with the same old price tag it’s had all the time (not raised).
3. Got 15% off — fantastic deal!
4. Went home happy.
THE END
Brought a dishwasher from Best Buy at the same discount it was at last week – got 3 air conditioners (wall units) that would have been marked down by the end of the summer but I figured why not use them this summer, and no interest for 18 months with my Best Buy card which I will pay off before then. Nope, no problems here, from someone who actually researched the rebate before using it.
What I find interesting is the “my tax dollars” stories. First of all “tax dollars” are allocated for programs like these and many more, for specific reasons energy savings. Also, I dont think “my tax dollar” people are the only people that pay taxes.
smc, care to elaborate on how much OIL is used in electric generation? Or has the middle east started selling us coal, uranium and wind?
You posters who look to skewer every idea that comes out of the Obama administration make me tired. He is trying to keep the economy from going down the drain. Did he CAUSE the recession? No. There are a dozen reasons why we’re in this mess, and none of them are Obama’s doing. Consider the fact that fat cats like Goldman Sachs have been getting rich off you and me for years. Perhaps now with the SEC suit they’ll get their comeuppance.
Why so many people here are so negative? As I told many of my friends if they were going to my some new appliances this year, it was right time to buy. Otherwise, wait for one year or longer, the price would definitely drop to what it is or even lower.
As for the price, I believe most retailers keep the price as same as they listed in last few days. Sears even lowers the price by taking 30% off their regular price on all energy-star certified appliances, though not that much as you thought since their regular price normally a few hundred dollars more than more other retailers. As like always, you got to do your own homework if you want to spend hundreds or thousands in advance. Anyway, with that, I have saved a couple of hundred dollars in Lowe’s this morning, which can match the prince Sears offered.
Kathryn – spending borrowed money from China is NOT how you keep the economy from going down the drain.
Look at the NextTag price history chart for Kenmore dishwashers. Sears had much lower prices for these appliances in Jan and early Feb this year. They started raising the prices, from $480 to $600 on most middle-line units, at the end of Feb. So this correlates with what Paul said he and his wife noticed. Sears raised prices in months prior to the rebate and now they are down to where they were earlier in the year.
joeschmoe it looks like YOU didn’t read the article. This is a federal program and the money comes from the fed: “…part of a federal stimulus program aimed at reviving the recession-battered appliance business.”
Seriously? What a joke. These are our IL tax dollars at work.
I am at work, while these yokels are spending my tax dollars. Makes me want to vomit.
you know what???? this program is similar to the cash for clunkers program, my sister got a $4000 discount with our tax dollars, and guess what??? id rather have citizens, such as my sister get a discount, then wall street or all of these CEO’s, so let the discounts come! our tax dollars are going to be spent one way or the other…why not let the average citizen save %15 and the companies get more business…
During lunch, I went into a Best Buy store for a software program. I was shocked that they didn’t have a single sign up or anything for the appliance program. The service people were just standing around. It really seemed liked they didn’t care at all. I would have though they would had put the energy stare items on a extra discount to drive constumers into the store. Usually you can get 15% off a product if you bargin. Thus without a additional sale on top of the government program, this program doesn’t mean a lot.
Mike writes:
“Can’t anyone just see things for what they are rather than clouding their vision with politics and insane theories?”
Mike, the problem with these “rebates” is that they are not free. We (the taxpayers) are paying for them.
This is a typical Democrat giveaway of our tax money.
Mike, you left off one part there at the end.
4. Went home happy, knowing that taxpayers helped subsidize my purchase by making this “great deal” possible.
I bought the new refrigerator I’ve wanted/needed for a long time. I finally got one big enough for the family with some of the “extras” I’ve always wanted (ex. icemaker). I researched this fridge at many different retailers for a week – and I found my best deal at Sears with the extra 15% – I’m very happy with my purchase.
For all of those saying, “I’m at work and those “people” are spending my money….I work full-time too – so does my husband, and son who live in our home. Our youngest, in high school, works a part time job. In other words, don’t think that just because this is a government program it is only helping those that won’t help themselves. If our family, as middle class, can take advantage of a good deal – why not???
These merchants are mighty trusting that the state of Illinois is going to pay its bills, for once, and actually pass the rebate money on to the merchants as they’re supposed to do. I sure wouldn’t take that for granted if I owned an appliance store here. There are Medicaid service providers who haven’t been paid the reimbursements the state owes them for years.
And all you conspiracist wingnuts who are convinced that this and every other Tribune news story represents a Democratic party problem, you sure have short memories. Nobody before him busted the federal budget like GW and the Republicans who controlled Congress. Have you forgotten who the President was who last ran federal budget surplus? BZZZT if you think it was Reagan, another big-time spender. It was Clinton.
sherry3ss | April 16, 2010 9:31 AM |
Thanks for spending more of my tax dollars!
——————————
YOUR tax dollars?!?
What are the rest of us that pay taxes, shopped liver?!
If you are coming form the right-wing, “your tax money” was probably spent during the Bush years… his administration spent all more than one trillion making war and implementing his homeland security programs.
Now that the other side of the tax payer base, me and the rest of the people who voted for Omaba, are calling the shots, let us spend a little bit on programs that make our homes more efficient, create jobs, and implement social programs that help our citizens… unlike the Iraq war!
Hi Big –
If that’s how you feel, I understande – but I prefer to think of it that I didn’t spend your taxes on my 15% today – I spent the taxes that my family has been paying for years. Therefore, nothing came out of your pocket.
Please don’t spread incorrect information. This is federal money from the American Recovery and reinvestment Act of 2009, sent to the state. The Illinois Department of Economic Opportunity is directing the program and will reimburse participating retailers with money earmarked specifically from this program. Again – these are not state dollars, but money being pumped into the state from the federal government.
dusty,
Washington Post = Tea-baggers-type non sense.
We are paying less in taxes today, 95% of Americans pay less today than we did during the Bush years. Tea Party Over!
Go cry wolf somewhere else!
JF,
We may be paying less in taxes, but we are spending more than ever. Bush was wrong to borrow so much, but he spent it on wars and homeland security which were activities that Americans could not do individually. However, Obama has decided to borrow even more for programs that could be done by individuals. You can buy a new car yourself, you can make your own home more efficent, you can start a business and employ your fellow Americans, you can contribute you time and wealth to help your fellow Americans. You cannot raise you own military to protect us from foreign enemies and you cannot secure our borders as an individual. I am not saying that Bush did not go overboard or get into unnecessary wars, but he at least focused on using the government to do what Americans could not do for themselves. Obama is borrowing record amounts to pay for things Americans can and should be able to chose to do and pay for individually. Liberals would rather borrow from our children and grandchildren.
I was looking the Freezer since last month. I went every week at Seras Outlet in Elgin. The freezer price was until this Tuesday was $539.95. After I heard about this program, I went today to check the price. They change the price to $634.95. I asked the manager about it. He told me let me check my sales paper. I told that’s not in sale paper that’s your in store special. Also he was telling me freezer is not qualify for this program. But when I chekced one sold freezer’s receipt next to it and that was a 15% discount on it as well. So I aksed him again what is going on. He didn’t explain me anything about it. He didn’t give me any answer. So I just left the store. That’s some retailer like Sears, making money from us and also from government.
My new bumper sticker:
Honk if MY tax dollars helped:
Pay your Mortgage
Pay for your new car
Pay for your new appliance
Pay for your health insurance
I don’t know…I’m almost to the point of hoping that I lose my job so that I can sit on my effing tush all day on somebody else’s dime.