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Price Protection

A nice complement to price matching is another service option offered by many companies, called price protection. This is in some ways like a company "price matching itself". :^) More specifically, the companies that do this offer to refund a portion of your purchase price, if the product you bought drops in price within a certain time frame after you buy it. A typical period of time is 30 days.

Companies usually don't offer this service primarily to get your business away from competitors. Rather, in the "prices may drop at any time" environment of the PC industry, they are targeting the people who always are afraid to buy because "prices will drop soon". Price protection encourages people to set aside this fear and "act now". It helps smooth demand during periods when prices are dropping more frequently, improving cash flow to the vendor. It also helps reduce complaints from customers who are unhappy when they find out that the price of the item they just bought dropped. Price protection is most commonly offered on whole PC systems, especially by large mail-order companies.

Since not all companies offer this feature, always ask about it before you place your order. Also ask specifically for the terms of the feature. For example, some companies that offer price protection let you do it only once. Don't call as soon as you see the advertised price drop; wait for the full period and call once at the end of the time frame. That way, if the price drops again you get more money back (and it does happen.)

Tip: Calling one day before the end of the guarantee period is usually more prudent than waiting for the very last day--in case you can't get through for example.

Whatever you do, don't forget to use the price protection! Part of why companies can offer this feature is that so many people forget to take advantage of it. In many cases price protection can be worth hundreds of dollars.

Next: Factors Affecting Pricing

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