Apple iPad and the cash controversy

The latest controversy over Apple Computer refusing to take cash payments for its hot iPad product leads me to believe the Mac innovator is putting the customer second in their business model.

As we all know in business the customer comes first, but I’m not sure if Apple believes in this long accepted practice. The company routinely has long line ups outside Apple Stores for new product releases. But if you look closely there are two lines. The long one is for rank-and-file customers and another much shorter line for those who were able to pre-order. With the release of the iPad, Apple instituted a No-cash for iPad policy. It has since dropped this policy, but not before a rather embarrassing situation involving a disabled person on a fixed income.

Diane Campbell from the San Francisco Bay area saved up to purchase an iPad with cash and was refused. The Apple Store in San Francisco denied her citing the no-cash for iPad policy. This woman ended up getting an iPad for free later on from Apple after her story made headlines everywhere. Campbell was delighted with the outcome of course.

Apple has always thought differently. They remain the odd-ball of the computer industry and I say that will all due respect. However, common sense has to prevail in certain circumstances such as the case with Campbell. But instead Apple took a hard line against a customer who saved up for the purchase. It was just down-right stupid. What if it were a kid that saved up his or her paper route money for an iPad and was refused?

Also accepting customer cash payments for other items in the store and not for the iPad is just a poor way to treat customers.

Supposedly Apple instituted the no-cash for iPad policy to limit the number of iPads per person to two along with preventing grey-market reselling. This policy again insults the customer. Why should Apple care what customers ultimately do with the product unless it is for criminal activity. If customers want to resell it for a higher price, let it collect dust, or use it as an expensive place-mat for dinner that’s their choice to make. They are the legal owners of that product.

I am also unsure if this no-cash for iPad policy was even legal. Since the iPad is not currently available in Canada (another disappointing decision by Apple) the policy is irrelevant. However, after consulting a lawyer about the legality of refusing cash, it should be noted that it maybe technically illegal to refuse cash or legal tender. According to one lawyer, it’s an older law that dates to a time when governments wanted to push commercial activity and the insistence on gold/silver in exchange for goods was seen as a barrier to trade. He said that the law is so arcane that no one really thinks about the law anymore.

Whether it is legal or not, merchants are safe because no one wants to enforce it. But just because you can get away with it doesn’t mean you should actually try it.

Again it’s about customer service and enabling the buyer to decide; not Apple.

These last two decisions really show that Apple has gone too far. This no-cash for iPad policy does not serve anyone but Apple and the company’s decision to shift iPad products from Canada and other places to the U.S. market to satisfy the demand south of the border sends the wrong message to the Mac faithful in Canada. One piece of Apple correspondence said basically that Canadian Mac fans should still be happy about not getting their iPad because U.S. Mac fans have theirs.
An American colleague told me that news release from Apple about its decision to shift iPad products away from other markets to the U.S. was the equivalent of saying “Sorry that you are dying of starvation; but you’ll be happy to know that people in the U.S. are fully fed.”

Two quick hit before I go. I was really sad to learn that Terry Buchanan of Compute has left the company. This to me is a double whammy of sorts because he also leaves the Venture Tech Network. He was a real force for positive change at VTN and brought to life a terrific T-Shirt for charity promotion just last month. I am sure Buchanan will land on his feet soon as he is highly competent executive in the channel.

Darrell Rodenbaugh, head of McAfee’s mid-market sales organization is retiring. The sales effort around the mid-market will be led by Alex Thurber, the company’s channel chief.

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