B&H Payboo Credit Card FAQ: here's how the no sales tax discount works

Posted:
in General Discussion edited May 22
B&H recently announced its new Payboo Credit Card with a unique perk that refunds sales tax on all orders in the form of an instant rebate. We're answering your questions and giving you the lowdown on how it works, including the pros and cons of the new payment method.


The new Payboo Credit Card refunds sales tax instantly


As reported on May 6, B&H Photo launched a new payment method for orders placed via its marketplace. Dubbed the Payboo Card, this store credit card offers shoppers the opportunity to order computers and electronics without paying sales tax. But how exactly does it work? We're answering your questions to determine if Payboo is right for you.

Payboo Credit Card FAQ

  1. Where does Payboo work?
    Payboo is a store credit card valid on purchases made via B&H's desktop website, its mobile app, NYC SuperStore and by phone. It can only be used on B&H purchases and is not a Visa, Mastercard, American Express or Discover Card.
  2. Can international shoppers use Payboo?
    Yes. The Payboo Card can be used to place orders shipped internationally. However, the sales tax-equivalent refund will not apply. Drilling down to Apple hardware, B&H is unable to ship Mac and iPad orders to international addresses due to manufacturer restrictions.
  3. Is there a limit to the amount I can save on sales tax?
    No. There is no cap on how much shoppers can save.
  4. Which bank backs the Payboo Credit Card?
    The B&H Payboo Card is issued through Synchrony Bank.
  5. How is B&H getting out of collecting sales tax? Do I have to report it?
    B&H will still collect and remit state sales tax in accordance with state sales tax laws and regulations. Customers are still paying sales tax so there are no special forms to file. The credit will be issued instantly for the equivalent tax amount, like a coupon discount -- but without the code.
  6. Is this card for personal use only, or can businesses apply?
    Although the Payboo Card is a personal credit card and not a corporate or business card, it can be used to pay for orders via B&H's business-to-business (B2B) and education (EDU) portals. Individual employees of a business account making a personal purchase are also welcome to participate.
  7. How is the sales tax credit issued? Do I have to wait for a gift card?
    The key benefit of the Payboo Card is that the tax-equivalent credit is issued instantly. There's no need to wait for a gift card or even make an additional purchase. The refund is issued on all non-tax-exempt purchases shipped to eligible states at the time of purchase, when Payboo is used as the payment method.
  8. Are there any exclusions?
    The loyalty reward does not apply to gift cards or other tax exempt purchases. Customers must also reside in a qualifying state. At press time, the tax-equivalent refund offer is not valid in Alabama, District of Columbia, Indiana, Iowa, Nebraska, North Dakota, Vermont, West Virginia, and Wyoming. If shipping to those states, B&H recommends customers enter their shipping zip code on the Payboo page to check for available savings. Orders shipped to states with no sales tax are also not eligible for the loyalty reward.
  9. Where will I see the savings?
    Payboo account holders will see the savings during checkout on the Order Details & Shipping Method screen. Below is a screenshot with the Payboo Card Savings section outlined.
    BH Payboo Card savings
    B&H Payboo Card savings displayed during checkout

  10. What are my chances for approval?
    While specific approval parameters have not been disclosed, WalletHub states Synchrony pre-approval offers have been mailed to consumers who have at least a Fair credit score (600-699).
Still have questions? Feel free to send us a note at [email protected] and we will do our best to assist. This FAQ guide will be updated as additional details become available, so continue to check back. And for the lowest prices on Apple devices, be sure to check out our Apple Price Guides.

Comments

  • Reply 1 of 13
    mfrydmfryd Posts: 113member
    The Terms and Conditions from the underlying bank explains that for "promotional purchases" interest is charged from the purchase date, even if you pay each statement in full at the end of the month.  The interest rate is 29.9% per year (about 2.5% per month).

    Does B&H explicitly state whether these "loyalty reward" purchases count as  
    "promotional purchases", or can they be paid in full at the end of the month with no interest charged?
    ronnrandominternetpersonfastasleep
  • Reply 2 of 13
    macman1984macman1984 Posts: 27member
    Very nice, but you don't explain HOW B&H can afford to give everyone between an8-10% discount.  If I buy something for $100 and the sales tax is 8%, I would normally have to pay $108.  But they're giving me an $8 rebate, so the cost is $100 including the 8% tax which B&H must pay.  The real net cost is $92.60, so they're basically giving me $7.40 off my $100 purchase.  How can they afford to do this?

    Of course if my state tax is 4% the "real" cost is $96.15 and I'm "only" getting a $3.85 reduction.  In a way this credit is unfair (I get a bigger discount if I live in a state with higher tax).  But the real question is how they can afford to discount everything they sell so heavily?
  • Reply 3 of 13
    Very nice, but you don't explain HOW B&H can afford to give everyone between an8-10% discount.  If I buy something for $100 and the sales tax is 8%, I would normally have to pay $108.  But they're giving me an $8 rebate, so the cost is $100 including the 8% tax which B&H must pay.  The real net cost is $92.60, so they're basically giving me $7.40 off my $100 purchase.  How can they afford to do this?

    Of course if my state tax is 4% the "real" cost is $96.15 and I'm "only" getting a $3.85 reduction.  In a way this credit is unfair (I get a bigger discount if I live in a state with higher tax).  But the real question is how they can afford to discount everything they sell so heavily?
    First, B&H is probably paying a lower transaction fee than they would if you paid with a major CC.  Second there is big money to be made on interest (at usurous rates) paid by shoppers who don't pay off the balance in full the first month.  Finally they may be limiting their liability by excluding high-tax-rate states; otherwise I don't understand why so many states are excluded. 
  • Reply 4 of 13
    apple ][apple ][ Posts: 8,680member
    randominternetperson said: Finally they may be limiting their liability by excluding high-tax-rate states; otherwise I don't understand why so many states are excluded. 
    That probably has more to do with certain state rules and regulations I would assume, as opposed to their tax rate.

    My tax rate is 8.875, that's pretty high, and I'm included, while much lower tax rate states like Alabama at 4% are currently excluded.
  • Reply 5 of 13
    jbajba Posts: 5member
    uhm, no thank you B&H.  at any point they could cancel the promotion and the customer gets stuck holding the bag.  not to mention, you have to open a credit card with B&H?  this raises more questions than providing any comfort of reliability or assurances.  to me, the proof this is questionable at best is the mere fact that B&H simply didn't come out and say they will _immediately_ deduct (your state here) tax from the purchase price.
  • Reply 6 of 13
    dewmedewme Posts: 2,099member
    I don't know why all of the fancy dancing is required to state the basic fact that B&H is paying a rebate to customers equal to the amount of sales tax levied in some states that require sales tax to be collected by B&H. Instead we see one sentence with "this store credit card offers shoppers the opportunity to order computers and electronics without paying sales tax" and a few paragraphs later the completely contradictory statement "Customers are still paying sales tax so there are no special forms to file." The bottom line is that this scheme/gimmick by B&H in no way impacts the sales tax liability for customers purchasing products from B&H. There are three situations that explain why some states are or are not part of this scheme:

    1) B&H customers who live in a state that requires B&H to collect sales tax at the time of purchase are paying sales tax at the time of purchase. 
    2) B&H customers who live in a state that does not have a sales tax are not paying sales tax at the time of purchase.
    3) B&H customers who live in a state that has sales tax but do not require (and cannot force) B&H to collect sales tax at the time of purchase are still responsible for paying the sales tax directly to their state, typically under what is considered a "use tax" law.

    Tax liability is between the state and the customer. However, sellers like B&H can be legally compelled to collect sales taxes on behalf of states based on the legal definition of the seller's nexus within the state, i.e., case #1 above. The scheme/gimmick described in this article only applies to situation #1. Customers who are in situation #2 don't care either way because there is no sales or use tax liability. Nothing has changed for customers who are in situation #3 above. B&H is not going to rebate customers who live in states that do not require B&H to collect sales tax on behalf of the state. If they did, customers could cheat both B&H and their home state by failing to remit use taxes when they file their state tax returns, and the vast majority of customers would  do so.

    What B&H is really doing here is using a scheme/gimmick to protect what they feel is their "no sales tax" competitive advantage that they have promoted for many years. A less obtuse way to do the same thing would be to focus on their customer's "out of pocket" cost being the same whether or not the customer is paying sales tax at the time of purchase. The "no sales tax" thing is part of their marketing facade even though "the customer pays no sales tax" has never been technically/legally true for every single state that requires buyers to pay sales tax (in the form of use tax) directly to their state. After all, it's no skin off B&H's back if their customers decide to cheat their home state by not paying use taxes when the seller did not (and could not!) collect sales taxes on behalf of the state. B&H is totally in the clear either way as long as they keep doing what they are legally required to do, which they have always been doing. 
    edited May 7 fastasleep
  • Reply 7 of 13
    macguimacgui Posts: 1,310member
    mfryd said:
    The Terms and Conditions from the underlying bank explains that for "promotional purchases" interest is charged from the purchase date, even if you pay each statement in full at the end of the month.  The interest rate is 29.9% per year (about 2.5% per month).

    Does B&H explicitly state whether these "loyalty reward" purchases count as  "promotional purchases", or can they be paid in full at the end of the month with no interest charged?
    Are you saying the bank's TAC is saying you will pay interest anyway? That makes no sense. Anybody who doesn't know that in advance won't make another purchase, promotional or otherwise, especially at an APR or 29.9%.  

    Potential interest is usually calculated from the purchase date, but only charged if the balance isn't payed in full in the billing cycle.


    fastasleep
  • Reply 8 of 13
    citpekscitpeks Posts: 45member
    Second there is big money to be made on interest (at usurous rates) paid by shoppers who don't pay off the balance in full the first month.
    Yeah, no kidding.  30% is the maximum penalty rate for a typical card.

    As for why there a lot of seeming obfuscation in the language about how this really works, part of it is marketing, and part of it is likely to avoid legal issues with tax authorities.

    In the same vein is why some gas stations offer a "cash discount" to skirt the card associations' rules against surcharges for card payments.  Some businesses just don't care and flat out state that they'll charge the extra percentage for a card payment to cover their fees, often contractors and the like who have few, or don't rely on card payments and can afford to stop accepting them if challenged.  Even government entities do the same and often get away with it.
  • Reply 9 of 13
    fastasleepfastasleep Posts: 2,975member
    jba said:
    uhm, no thank you B&H.  at any point they could cancel the promotion and the customer gets stuck holding the bag.  not to mention, you have to open a credit card with B&H?  this raises more questions than providing any comfort of reliability or assurances.  to me, the proof this is questionable at best is the mere fact that B&H simply didn't come out and say they will _immediately_ deduct (your state here) tax from the purchase price.
    Holding what bag?

    And they did say they deduct the tax from the purchase price:
    "B&H will still collect and remit state sales tax in accordance with state sales tax laws and regulations. Customers are still paying sales tax so there are no special forms to file. The credit will be issued instantly for the equivalent tax amount, like a coupon discount -- but without the code."
  • Reply 10 of 13
    dewmedewme Posts: 2,099member
    Very nice, but you don't explain HOW B&H can afford to give everyone between an8-10% discount.  If I buy something for $100 and the sales tax is 8%, I would normally have to pay $108.  But they're giving me an $8 rebate, so the cost is $100 including the 8% tax which B&H must pay.  The real net cost is $92.60, so they're basically giving me $7.40 off my $100 purchase.  How can they afford to do this?

    Of course if my state tax is 4% the "real" cost is $96.15 and I'm "only" getting a $3.85 reduction.  In a way this credit is unfair (I get a bigger discount if I live in a state with higher tax).  But the real question is how they can afford to discount everything they sell so heavily?
    The reality is that any seller who is advertising "No Sales Tax" in bold terms, as if they are doing you a favor, is trying to take credit for something that they have absolutely no control or influence over. Sellers do not get to decide whether they will or will not collect sales tax. If they sell products into a state that requires/forces them to collect sales tax they are legally required to collect it. Likewise, sellers cannot collect sales tax for states that they are not authorized/required to collect sales taxes for. The whole "no sales tax" scheme in advertising is a subtle form of human engineering. They are trying to entice you into thinking that you are getting away without paying sales/use tax because they aren't in the tax collecting loop, knowing very well that the entire burden for paying the sales/use tax is totally on you, the buyer, to pay what you owe to your state. Sellers are neutral third parties in the tax liability relationship between buyers and state revenue collectors. Even though there isn't anything in it for sellers they still have to follow all of the tax laws. It's kind of a raw deal for them so it's understandable that they'd be trying to find ways to make lemonade from the lemons they've been dealt.
  • Reply 11 of 13
    HockeyFanHockeyFan Posts: 5editor
    mfryd said:
    The Terms and Conditions from the underlying bank explains that for "promotional purchases" interest is charged from the purchase date, even if you pay each statement in full at the end of the month.  The interest rate is 29.9% per year (about 2.5% per month).

    Does B&H explicitly state whether these "loyalty reward" purchases count as  "promotional purchases", or can they be paid in full at the end of the month with no interest charged?
    Hi! According to B&H, "your payment due date is at least 23 days after the close of each billing cycle. Synchrony will not charge you any interest if you pay your entire balance by the due date each month." https://bhpho.to/2PQnYNL

    B&H does have a second card without the tax-equivalent loyalty refund that does offer no interest financing on qualifying purchases, which would fall under the "promotional purchases" umbrella. More details on that can be found here: https://bhpho.to/2PVLPLQ

    Hope that helps!
    fastasleep
  • Reply 12 of 13
    cmd-zcmd-z Posts: 52member
    While if offers relief to sales tax burden, I'd lose out on the automatic extended warranty from my CC, and the cash-back rebate. Continuing to be able to purchase at a net-zero state sales tax is nice, as is B&H's prices, for big ticket electronics this is a no-go for me due to the loss of extended warranty coverage which a Payboo CC would not provide.
    fastasleep
  • Reply 13 of 13
    CA10splayerCA10splayer Posts: 1unconfirmed, member
    Here’s the deal. They are counting upon the business gamble of customers not paying the credit card balance on time. B&H gets a small kick back from Syncrony Bank. They may lose some money on the entire process but greatly gain from the “no tax” sales.
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