(Bloomberg) -- A Japanese electronics retailer was forced to cancel a generous cashback program on launch day after it was overwhelmed with applications.
Due to start Monday, Yamada Holdings Co. had advertised a campaign that gave a 10% return on savings deposits at Yamada Neobank, in the form of points that could be spent at its popular retail chain. Japanese posters on X.com wrote excitedly that the points-back benefits could amount to an 18.5% return over 12 months — unheard of in Japan’s ultra-low interest rate environment.
By Monday, however, it was over before it began. “Considering our original purpose, we regret to inform that we are discontinuing this special offer,” electronics unit Yamada Denki said in a statement. The company added they had been “overly optimistic in planning and preparations,” and that “along with more applications than we expected, some people have submitted a large number of applications.”
There was no limit to the number of accounts one person could open, a representative of SBI Sumishin Net Bank Ltd. said by email when asked by Bloomberg News. SBI Sumishin acts as Yamada’s banking partner to implement its services. Yamada Holdings declined to comment.
Banks are racing to secure deposits as Japan exits a negative interest-rate environment, said Shinichi Tamura, an analyst at Okasan Securities Group Inc., who called it an “abnormally” good deal compared to other banks.
“More businesses are now investing in their own ‘economic zones’ with high points-rewards,” he said. “Yamada was probably prepared to take a loss from the campaign, but had to shut it down after the application numbers exceeded their budget.”
The company says it will send 3,000 points to each account holder in compensation for canceling the program.
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