Apple excludes iTunes Store from $100 iPhone credit [UPDATE: Apple allows iTunes Gift Card purchase]

Apple Inc., offering $100 in credit to early iPhone buyers after cutting the price, excluded one of its most-popular items from the rebate: iTunes music,” Connie Guglielmo reports for Bloomberg.

Customers can buy ‘just about anything sold by Apple’ if they submit a rebate claim by Nov. 30, Cupertino, California- based Apple said today on its Web site. The company didn’t give a reason for leaving out iTunes,” Guglielmo reports.

[UPDATE: 11:59pm EDT: Apple: $100 iPhone credit can be used for iTunes gift cards]

Full article here.

Apple Store (retail and online) and Apple’s iTunes Store are two completely different entities, however the Apple Stores do sell iTunes Gift Cards, which Apple has specifically excluded from the $100 credit.

In their “Terms and Conditions for the $100 store credit for Early iPhone owners program,” Apple states, “Customers may not redeem their store credits at any iTunes Store in the United States or elsewhere [or] to purchase Apple Gift Cards or iTunes Store Gift Certificates [or] to give iTunes Store content as gifts or to create iTunes Store allowances.”

Apple probably excluded iTunes Store purchases due to the scant profits the store reportedly generates for Apple, which doesn’t necessarily make it right.

[UPDATE: 11:59pm EDT: Apple: $100 iPhone credit can be used for iTunes gift cards]

[2:35pm EDT: Revised headline and our Take to reflect that Guglielmo got it right and we initially got it wrong: Apple has excluded iTunes Store from the $100 iPhone credit. Sorry, Connie! Also removed feedback that would be confusing due to our error.]

23 Comments

  1. Am I the only one here who thinks it was pretty obvious that iTunes Store would be excluded?

    Let’s think for a moment; a $100 store credit, if used in an Apple store, will generate sales of Apple hardware, Apple software or (less ideally) some other vendor’s product. On every such sale, Apple actually keeps certain percentage; if a third party product, then just a sales margin; if Apple product, then a lot more.

    Now, if this $100 were to be spent on items in the iTunes Store, Apple’s chare of those revenues is barely break-even.

    In other words, when they give store credit in their physical stores, it returns up to 50 cents on every dollar of that store credit. When they do the same in the iTunes Store, it barely returns a few cents.

    Whas this confusing?

  2. What’s hilarious is that it is completely acceptable for you to walk into an Apple Store and purchase a 100 dollar iTunes gift card with a 100 dollar Apple Store gift card.

    This is allowed, we used this information to sell people gift cards at our store when the mom didn’t know what the kid wanted to get.

  3. If I bought a iPhone and got a unexpected rebate, I certainly would spend it at iTMS.

    In this case it would mean 100 songs or 50 TV shows.

    The math is easy.

    However because it’s a Apple Store only rebate, one has to “look around” to maximize their rebate. Most often “going over” what they originally expected to pay. Of course there will be some that will stay under, but then they will take a small loss.

    Either case Apple wins and they have been quite willing to give 10%, 20% or even volume discounts without batting a eye.

    For instance when Lepoard is released, expect a physical Apple Store 10% across the store discount for that night only.

    This could add up to several hundred dollars worth of savings for you.

  4. @MDN update.

    Very big of you. I’m sure Connie feels better now. Maybe you and Connie can get a drink together and laugh about how you made a personal attack on her in a public forum before you realized that you were the morons.

  5. JRA got it right. It’s all about profit margins and the iTunes store doesn’t contain any for Apple. The $100 store credit is not worth $100 to Apple as their wholesale costs are much less.

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