John Lewis Direct Ends Relationship With ‘cashback’ Websites

[Richard Forster]

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MONDAY, APRIL 21 2008

RELEASED ON BEHALF OF JOHN LEWIS DIRECT VIA BUY.AT

John Lewis Direct, the website and catalogue business of the John Lewis Partnership, announced on Friday, April 21 2008 that it is to remove all *‘cash back’ reward websites from its affiliate programmes effective midnight on Sunday 18th May 2008.

John Lewis has a long tradition of treating all customers equally, regardless of circumstance or shopping channel. The business model of ‘cash back’ sites is at odds with this ethos, as they offer a permanent discount to online customers that is not available to department store customers.

John Lewis Direct will continue to work with its other affiliate partners on the programme.

What is classed as a ‘cashback’* website ?

A ‘cashback’ website is any site that is deemed to be offering a percentage discount/cashback on John Lewis products on an ongoing basis, or where points have a clear and obvious cash value which is returned [credited] wholly, or in part to the customer.

John Lewis Direct appreciates there will be some sites that do not fit this definition exactly. John Lewis Direct have already reviewed these sites on a case-by-case basis with our affiliate networks to reach a decision on their suitability for the John Lewis affiliate program.

For any affiliate that wishes to review their business model in light of this decision we're happy to receive their proposals and we will then assess them against our usual affiliate approval criteria - incremental revenue driving potential & fit with the John Lewis brand.


Q&A

I am a 'cashback' website/member of a ‘cash back’ website, how will this affect me?

For all ‘cash back’ websites affected all links through to johnlewis.com are to be removed anytime before midnight on Sunday 18th May 2008. After this time customers will no longer be able to order from johnlewis.com via the affected ‘cash back’ website. Any orders completed prior to midnight on Sunday 18th May 2008 will qualify for a commission payment (normal validation procedures apply). Any orders placed after this time will not qualify for commission payment.

Will consumer order history still be available?

Yes. If you registered an email address and password when you ordered from johnlewis.com, your account will still be active. Click on ‘my orders’ from the John Lewis homepage.

If you have any questions regarding the changes on the buy.at network please get in touch,

Many thanks,

[D-Mac]

Very interesting. I wonder whether other big names will follow suit..

[sgpratley]

Or how long it will last...

Amazon pulled the plug on most of its cash-back sites a couple of years back then promptly did a U turn when they realised how loyal to the sites rather than Amazon the customers are.

Also, this bit isn't strictly true:

John Lewis has a long tradition of treating all customers equally, regardless of circumstance or shopping channel.

I can walk into a John Lewis store and negotiate a price-match, but I can't do that online.

I understand the theory, but I don't think it'll do them any good in practice.

[csn]

A ‘cashback’ website is any site that is deemed to be offering a percentage discount/cashback on John Lewis products on an ongoing basis, or where points have a clear and obvious cash value which is returned [credited] wholly, or in part to the customer.

Richard,

Just out of curiosity, if a 'cashback' website was returning the cash to a charity for instance, would it still be deemed as a cashback site?

I know buy.at does a lot with charities so I am curious as to the effect of this move upon buy.at itself as well as those cashback sites that reward a third party rather than the shoppers themselves.

[Richard Forster]

HI David thanks for your post.

Buy.at webshops are an affinity shopping portal whereby commissions never reach the inidividual consumer but they are delivered to a charitable cause, and not wholly, or in part to the customer making that purchase.

If you have any issues drop me a line,

Many thanks,

[ysc]

I don't think it will affect many cash back sites by much anyhow. Users of cash back sites are pretty frugal folk and certainly savvy enough to locate a good deal. Therefore I don't expect John Lewis would appear up top of their list when when it comes to making a purchase of an item available elsewhere for 75% of the John Lewis price.

The reason doesn't really stack up. Will they accept a credit card that gives airmiles or loyalty points in store? Isn't it pretty much the same thing?

The business model of ‘cash back’ sites is at odds with this ethos, as they offer a permanent discount to online customers that is not available to department store customers.

But it is available. They can join a cash back site. Just like they can choose to get a cheaper credit card.

Maybe the big wig that made this call doesn't much like new fangled inventions such as the interweb thingy. Once people are in store, it's less easy to compare prices - though they are pleasant environments.

[sgpratley]

I can walk into a John Lewis store and negotiate a price-match, but I can't do that online.

As my trip to the sandwich shop goes past a John Lewis store, I thought I'd nip in and check my facts. The price-match they offer is restricted to 8 miles of the store you are buying from.

So if you're shopping from somewhere like the High Wycombe store which has not a lot of competition in easy reach, you're not going to get the prices you can in Oxford street by matching the discount electrical stores on Tottenham Court Road.

It makes a bit of a mockery of the "regardless of circumstance" line.

On a commercial note the decision seems somewhat at odds with John Lewis' claim that they really want to grow sales through the affiliate channel in high ticket items like electricals which are sold by other stores (as opposed to own-brand items).

This is one area where cashback sites can genuinely drive incremental sales by eroding the price differences with other stores such as Argos who won't work with cashback sites, or stores who don't have an affiliate programme at all.

[ep90]

Top work I say, well done John Lewis. Lets hope more stores follow suit.

[Cheapdvds]

so do discount and voucher sites fall into this??

[c41lum]

I think over the next couple of months more and more big blue chip companies will be pulling away from cashback sites.

Voucher Code and Discounts sites are seen as different animals to cashback sites. Cashback sites undermine the pricing set by the retailers therefore you could see why they might want to take back control.

(Just my humble opinion, please don't bite my head off)

[Richard Forster]

HI Discount and voucher code sites can promote John Lewis via normal commissionable links or authorised affiliate voucher codes- which is a code that has been directly communicated from the affiliate networks- and takes the form of AA##### (two letters four numbers) are valid for affiliates.

If anyone has any issues please let me know,