The Winter Replacement Program (Legal ?)

Have you ever opened the newspaper or received a letter or flyer in the mail that offers you an “Incredible Deal”, “Phenomenal Opportunity”, “Limited Time Offer”, “Help, We Are Overstocked and You Save”, “Free Furnace”? When these offers come from HVAC Businesses they will usually involve a “Special Deal” that the contractor has negotiated with the manufacturer or distributor. In this article, at the expense of creating a stir among some HVAC professionals, I am going to try and explain how some of these offers work and uncover some of the aspects of this type of marketing that HVAC contractors would not want you to know.

Let’s get started. Here is how it works in some cases. The HVAC contractor contacts its equipment distributor and lets them know that they will be offering a “Winter Replacement Program” to their customer base. Many distributors have been involved with these programs and require no education and therefore are prepared and usually willing to be a party to this borderline scam.

The contractor puts together a sales letter, flyer or newspaper advertisement that explains that they have negotiated a “Special” deal with their manufacturer and have purchased a specific number, usually 85, 90 or 95 of “Special” HVAC systems. They then take one of two approaches. Either “We have over estimated our ability to sell these units and need to move them out, and are willing to drastically reduce the price in order to get rid of them and generate cash during our slow winter months”, or they may use the “We only have 85 of these systems being offered at 50% off the regular price, first come, first serve” approach. Up to this point, how can you argue with any of this? Stores are always advertising overstock sales and offering special deals on great buys that they have made. Well here’s the rub. It probably isn’t true!

Now let’s go back to the negotiated deal with the distributer or manufacture. It didn’t really happen the way the advertisement claims. What probably took place goes like this. The HVAC contractor either wrote a letter or requested that their equipment distributor write a letter explaining the terms of their agreement regarding the 85 special systems and then also “create”, and it’s important to understand the act of “create” an invoice for the 85 systems. The contractor then takes the letter and files it and in some cases publishes it with the advertisement that you receive as proof that they have really purchased this quantity of equipment being offered to you the homeowner.

Well folks, here is where the scam comes into play. That transaction probably never happened. The distributor never actually made the large sale of equipment to the contractor and the contractor never received the large order in question. You have been duped. Nothing has really changed for the contractor except that they have created a false event. This false event stirs the homeowner to think that this opportunity is NOW and they must react or lose out. They have pushed your “Buy” buttons under false pretense.

So why is this really a problem? We all get up everyday and live our lives under certain laws that we have all established that protect ourselves. Some of those laws relate to deception and this type of program is a deception. It is against the law to make claims that are untrue in order to profit. It is called fraud. The letters and invoices are created in the event that someone tries to challenge the validity of these programs. And in some cases it has come to this and the contractors and distributors have had to make the lie a reality by carrying out the original letter and invoice when they have been accused of deceptive practice. And some have been found guilty and have had to pay huge fines and in some cases have been found guilty of fraud and served jail time. So, knowing that paints a more serious picture of what seems from the surface to be a minor infraction. When these contractors and distributors go behind closed doors and conspire and scheme to create a non-event for the purpose of extracting your honest hard earned money, you are just a step away from them lifting your wallet or snagging your purse.

Be aware. Knowledge is power……….Get some!