Furniture Store's Customers Win Along with Red Sox

It seemed crazy. Jordan's Furniture, based just outside Boston, started a promotion earlier this year that promised customers who bought certain items during a month-long period that they would basically get them for free if the Boston Red Sox won the World Series.

Customers took Jordan's up on the offer, placing nearly 30,000 orders. And then, when the Sox beat the Colorado Rockies on Sunday, they hit the jackpot. They are all getting their money back. I've seen estimates that it will cost Jordan's more than $15 million.

But it's not quite as nuts as it might appear: Jordan's took out an insurance policy.

These kinds of promotions are getting more popular each year, says Tiffani Stovall, marketing manager for Odds On Promotions of Reno, Nev. The company underwrites insurance policies like the one Jordan's took out.

Stores use this kind of "conditional rebate" promotion to draw in more shoppers. Many are tied to a sporting event — like, if your team hits a grand slam in the seventh inning, all tires are free — but they don't have be. Stovall's company once insured a promotion that offered rebates if it snowed on Christmas Day.

However, Stovall says few are as big as Jordan's Red Sox giveaway. Odds On Promotions didn't insure that one, but it is handling a similar contest for Shavarsh Jewelers, a Boston-area store that will rebate purchases if the New England Patriots are undefeated this season. The jewelry store is insured for a much smaller amount.

And the rebate ointment is not without its flies for customers. The New Hampshire Union Leader reports that Jordan's will send the "winners" a Form 1099 and notify the IRS because federal law requires taxpayers to report prize income of more than $600.

6:20 PM ET | 10-29-2007 | permalink