Since the HST implementation in B.C. this past summer, many consumers have become more price sensitive when purchasing expensive items. Many companies have suffered a decline in sales as the prices of their products and services now include both the PST and GST. To deal with the impact of HST on companies’ sales, companies use various tactics, such as sales promotions where retailers pay the HST on behalf of customers, to attract consumers to purchase their products and services. Sears Canada will offer HST rebate to B.C. consumers who purchased home heating systems, roofing or replacement windows and doors if HST is abolished by September 2011. This promotion called Sears HST Protection Program helps ease consumers’ anxiety, because the consumers know that Sears will reimburse the tax to them if the tax is abolished next year. However, the HST Protection Program may infringe the law. Sears Canada’s new promotion may influence citizens to vote a particular way, which is illegal.
Even though there are risks to Sears Canada’s new program, I think Sears has developed a good marketing strategy that focuses on HST. Since many B.C. citizens are against the implementation of HST, the incentive to purchase products or services from Sears will increase after the HST Protection Program is established. Sears is wise to design a program targeting price sensitive consumers, because the impact of HST on consumers is huge. On the other hand, the HST refund is only given to customers if the tax is repealed next September. If the majority voted “Yes” for HST, the tax rebate would not applied, leading customers to feel cheated by Sears. The company’s reputation will be immensely affected if HST is not abolished. In my opinion, Sears has to design another program as an alternative when HST remains. Furthermore, the tax refund happens one year after the purchase. The program does not benefit consumers until a year later, so the HST Protection Program may not be attractive to consumers.
