By Patrick Avenell (Follow me on Twitter)

Key Points:

-Alarm bells set off by pre-launch discounting.
-Harvey Norman will look after any customers regardless of what HP do.
-Tablets are otherwise selling well.

Harvey Norman is prepared to ‘foot the bill’ for the withdrawal last week of the HP TouchPad, with the head of Harvey Norman’s Computers Division buying team Ben McIntosh saying that retailers, more than suppliers, must be responsible for the products they sell.

After announcing in its quarterly results last Friday that supply of WebOS products would be discontinued, Harvey Norman stopped selling the TouchPad and began offering refunds to the 1,200 customers who had purchased one in the four days it was on sale. Over the weekend, HP TouchPads were available online at firesale prices, as stockholders attempted to rid themselves of the now obsolete tablet.

Although HP’s decision took the industry by surprise, McIntosh said the alarm bells were ringing when the Australian RRP was slashed by $100 a week before the launch.

“It’s never ever healthy to see the price of a product having to be dropped before launch,” he said. “The price in Australia was not originally going to be dropped, but if it gets dropped in America it’s only fair for Australian consumers that it gets dropped in Australia. Obviously, when things are having to be discounted before launch, you know it’s on shaky ground.”

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What’s not shaky, however, is Harvey Norman’s relationship with HP, with McIntosh saying that the withdrawal of the TouchPad was isolated from HP’s mature PC relationship with the retailer.

“HP is a major trading partner of Harvey Norman and has always been so in the Computer Division’s history and will remain so,” said McIntosh, who also noted that the decision to stop selling the TouchPad was his own and not a directive from HP.

“HP has not instructed us to take this off the shelf. I cannot be certain that HP will keep their investment in WebOS, therefore I cannot look a customer in the eye and sell them something that will not be supported in the medium-to-long term. We’ve taken a proactive approach to this by taking this off the shelf.”

McIntosh said no discussions had yet taken place between Harvey Norman and HP as to which organisation would ultimately pay for this withdrawal. In addition to the cost of refunding sales and incidentals, there is also the man hours involved in dealing with the issue. McIntosh is taking a ‘buck stops here’ approach to the TouchPad, saying that retailers must take final responsibility for the viability of the products they sell.

“The retailer has a moral obligation to make sure we stand by the product we sell and that we look after each customer to ensure they haven’t bought something from us that they’re going to be wasting their money on because there’s no support of it in the future,” he said.

“This is a real shot across the bow to all other retailers, which says Harvey Norman will look after their customers to all expense and all cost, if that means I can’t negotiate with HP from them to reimburse me, so be it, the customer buys stuff from Harvey Norman knowing they’ll be looked after if there’s a problem.”

McIntosh concluded by saying that although Harvey Norman was upset by this decision, the tablet category is still strong and other products should continue to sell well.

“I’m disappointed that it’s happened, but no-one’s angry, it’s just one of those things that happened. “We’ve got plenty of other brands on the shelf — it’s one of those things that happen — the computer industry is very fickle like this, things happen and we all move on.”