October 31, 2014

Government Appliance Rebate Not Working Perfectly?

The appliance business in Washington state did not see the benefits some might have expected from the government’s appliance rebate program. The Tri-City Herald reports:

About 38,000 people around the state got checks from $75 to $750 for buying Energy Star-rated appliances and properly recycling the old ones said Rebecca Stillings with the state Department of Commerce.

But all the money had been applied for by Friday, November fifth she said.

The owner of one Tri-City business was glad to hear that.

“That’s good news for us,” said Steve O’Neill, owner of Master’s Appliance & Refrigeration in Pasco. “We saw a lot less used appliances coming through our shop.”

O’Neill’s store sells new and used appliances, and the rebate program meant fewer used appliances available for resale or to salvage for parts. (The rebate program requires the older be recycled.)

“It really only helped the people who could afford the newer, high-end ones,” O’Neill said. “If you had to buy used, it just drove up the price.”

O’Neill said he used to bring in a truckload of used appliances a day to refurbish or use as parts to rebuild other machines for resell in the store he’s owned for 10 years.

Now, it’s down to two or three truckloads a week.

Because the store sells new and used appliances, O’Neill saw both sides of the program.

“What we lost on the used stuff, we didn’t make up on the new ones we sold,” he said.

At Garrison’s Home Appliance Center in Kennewick, owner Henry Garrison said some customers obviously knew about the rebate program.

“I had some people and they only wanted the ones they can get some money back on,” he said.

The program wasn’t much of a hit at Bunch-Finnigan Appliances in Kennewick. Dan Bunch said most customers weren’t aware of the program, and weren’t interested when they heard about it.

“The requirements and regulations are too strict, and it’s complex,” Bunch said.

Bunch said he didn’t notice an increase in business during the rebate program.

Appliance Rebates are Here – But Not for Long

The federal appliance rebates are finally here, but if you want yours, you’d better act fast.

According to the Wall Street Journal,  in Florida  the $17.6 million allocated for the program lasted a day and half, as more than 72,000 claims were filed. In Illinois, the second half of its $12.4 million, made available on Friday, April 16th disappeared in 11 hours.

Nationwide, $300 million in rebate money has been allocated by the federal government to 56 states and territories to encourage residents to buy furnaces, clothes washers, refrigerators and other appliances with the government’s Energy Star label. Typically, rebates run about $75 for a clothes washer and several hundred dollars for home heating and cooling systems.

But in an experience reminiscent of last year’s popular “cash for clunkers” program, which paid consumers to trade in gas-guzzling automobiles, interest in the appliance programs has been so been intense that the state programs are often running dry in a matter of days.

For example, Melissa Woodall, a single mother of three in Miami, said she began scanning appliance ads a few weeks ago for a new stove. She noticed an article about the rebates and decided to replace her old, leaky dishwasher and refrigerator.

The day before qualified purchases were allowed, she visited Sears to pick out the appliances. On Friday, she arrived to the store at 6:30 a.m. and found 49 customers in line. Fortunately, the store had given her a printout the night before. All she had to do was pay and arrange delivery, which still took an hour and a half in the crowded store.

And the ordeal was not over, Ms. Woodall said — she still had to get the rebate itself. At 11 a.m., when online signups began, she and her sister went to the state’s rebate site. “The Web site was flooded. It kept crashing,” she said. It took her an hour and 15 minutes to get registered for the rebate.

It was worth it, Ms. Woodall said. She paid about $1,500 for the dishwasher and fridge and will be getting about $500 back.

Each state has structured its own program, sometimes excluding certain appliances like air-conditioners or requiring proof that old appliances were recycled before paying out the cash. The amount of money available varies widely, from more than $35 million in California, where the program was scheduled to start on Thursday in connection with Earth Day, to $100,000 in American Samoa.

The federal government created the appliance rebate program as part of the 2009 stimulus legislation, and retailers say it has increased sales.

The high interest is understandable. The rebate programs come on top of existing discounts on Energy Star appliances, recycling and take-back rebates for old units, and specials provided by individual retailers. In some cases, consumers may qualify for federal or state tax credits, too.

Manufacturer Rebate vs Government Rebate

We’ve been getting questions regarding when the Government’s promised 300 million dollar appliance rebate will become available. The problem is, unlike the cars Cash for Clunkers program, this appliance stimulus plan is designed and administered by the individual states.

Under a population-based funding formula, Ohio was allocated $11 million, Kentucky $4 million and Indiana $6 million for the rebates.

Today is the deadline for the states to submit their rebate plans. The federal government has until the end of November to approve them.

But most states aren’t expected to launch their rebate programs until early next year.

Jim Recker of Recker & Boerger Inc. appliance stores in Ohio and other appliance retailers say there are plenty of manufacturers rebates already available and some retailers are piggy-backing with their own rebates.

“People will wait for (the government program), but if they bought now, they could take advantage of rebates already in place and save on less energy used by the new appliances in the meantime,” said Recker,(Cincinnati.com) whose firm has stores in Springdale, Montgomery and Anderson Township.

Some examples: Frigidaire has extended a $100 cash back offer on Energy Star-qualified dishwashers through the end of October. Electrolux is offering $100 pre-paid Visa card on Energy Star-rated refrigerators purchased through November.

Another wrinkle in the appliance rebate program is that the federal guidelines encourage the states to team-up with recyclers to remove old appliances from the market, although it isn’t mandated (as it was in the Cash for Clunkers program).