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11/23/2009
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Microsoft Bing Cashback Not Always A Bargain

Microsoft's search rebate program inflates some prices for online shoppers, claims a competitor.

Having already drawn the ire of Microsoft for posting information about a way to exploit the company's Bing cashback rewards program, Samir Meghani, co-founder of price-comparison search engine Bountii.com, now claims that Bing's cashback rebate can make some products more expensive.

Bing cashback, he says in a blog post published on Monday, has "a hidden 'feature' that I'm calling 'negative cashback.'"

Bing cashback is a search marketing program that provides a cash rebate credit for the purchase of certain items found via search. The program lets merchants specify the amount of promotional funds paid to Microsoft as a sales commission. Microsoft, which operates the program to promote Bing, then passes 100% of the commission to shoppers after a 60-day waiting period.

Meghani says that the program can in some cases lead to higher rather than lower prices. As an example, he cites a visit to butterflyphoto.com to purchase a Canon Vixia HV40 camcorder.

"If I go directly to butterflyphoto.com, I pay $699 with 0% cashback," he said in his post. "If I use Bing Cashback, I pay $758 with 2% cashback, or $742.84. Using Bing cashback has actually cost me $43.84, giving an effective cashback rate of -6.27%. Yes, negative cashback! Is this legal? False advertising? I don't know, but it's pretty sketchy."

Meghani claims that the problem is compounded by a cookie that "taints" his browser. He says that because he followed a Bing link to Butterfly Photo, that site set a cookie identifying Bing as the referring site. The cookie, he says, lasts three months and will ensure that he is presented with the higher Bing price during subsequent visits to Butterfly Photo while the cookie is active.

"Just clicking a Bing link means three months of potentially negative cashback, without me ever realizing it," he writes.

In an e-mail, Meghani said that he's heard from others who have experienced this issue. "My very rough estimate is that about 5% of the listings from Butterfly Photo had inflated prices on Bing when I was looking into it," he said. "I know of at least one other store on Bing that does this kind of thing."

Two weeks ago, Meghani, at the insistence of Microsoft, removed information he had posted about a technical flaw that allowed Bing cashback participants to accumulate rebate cash without making purchases.

In an e-mailed statement, a Microsoft spokesperson said, "With more than 1,000 retailers and 17 million product offers, the Bing cashback program aims to ensure Bing customers get the best available deal on the Web. Within the cashback program, each retailer sets the allocation of products and pricing of those products, which are delivered to Microsoft through a realtime data feed. We have tools that will catch discrepancies, and in this particular case, there was an error in the information delivered to us. When we notice an inconsistency or one is reported to Microsoft, we work with the merchant to correct the issue immediately. Overall, this case is an isolated instance within the larger Bing cashback and we are working with Butterfly Photo to resolve this specific issue as soon as possible."

Update: Story updated to include Microsoft's comment.

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