Your wrong on if Newegg is paying in USD for their parts, they are. They are basically an eCommerce frrontend to the real Tier 1 Disti's.
I said, "from the manufacturer." You would need the entire process, from mining, refining, design, fabrication, etc. to be in USD for exchange rates to not be relevant.
Their margin is very slim on most items and they make this up in that they are not actually warehousing, shipping or dealing directly with importing the parts. They do appear at times to handle things directly skipping the Disti such as when they bought and sold the fake CPU's last year or the year before but for the bulk of their product you can look at them as nothing more than a customer service web front to the backend importers. I would argue that those backend importers, the Disti's also pay for their products in dollars but I can't say that is a fact. Orders for most products are done months in advanced by the Disti's directly with the manufacturer and although those Intel chips may come from Taiwan it's Intel TechData, Synnex and Arrow are buying from and paying.
I agree that refunds would be based on what you paid but as I said if you paid 5BTC because that's what Newegg's backend API called for when doing the math you would not be a happy camper if Newegg sent just 4BTC back if the market had fallen nor could Newegg survive many returns if the market went the other way and 100 people all returned those video cards because Newegg based returns on current pricing and the price had gone through the roof. The dollar does not vary by 5% in a day, BTC does. Somebody in the exchange is going to be very unhappy.
Yes, but all of that is irrelevant. Everyone knows that a refund does not mean fair market value. I have never received a reduced refund through them, and this is the only part in their return policies that says anything like that:
Out-of-Stock (Back-Order) Items
If Newegg no longer carries an item that is sent in for replacement, or if that item is simply out of stock, the item will be sent to our Back-Order RMA Department. You will be notified via email of two options: 1) Newegg can send you a comparable replacement item, or 2) Newegg can issue you a refund at the current market value of the product. A current-market-value refund may not exceed the original invoice price. If the item is returned within 30 days of the original invoice date, a full refund will be issued.
If someone wishes to cash out on a low, that is their problem. I wouldn't expect Newegg or anyone else to do that. They only need an EMA on the exchange rate, profit margin, possibly a little buffer at first which they can remove over time to remain competitive, and price and exchange at or above that level. It's not rocket science. If they want to limit or reduce their risk, they can only offer certain items for sale with BTC, not offer a return policy at all on them, insure themselves by investing an equivalent amount of their risk elsewhere, etc.
So let's say you have Newegg accepting BTC how does Newegg get it's dollars out of it? The exchanges are limited in the amount they can pull out in a day, MTGox is what $1000? They would have to limit sales to the amount they could reclaim to cover cost not to mention sending those dollars to DWolla or however would show up as thousands in possible international money transfers, RED FLAG IRS!
The same way we do. Yes, the exchanges are small, but once you get retail markets involved, it will expand, probably rapidly. Few are willing to tie up capital in order to be the counterparty to any deal, so they are mostly simple brokers between parties at this point.
I think the better idea if for Newegg to offer on a daily basis X number of $10 Gift Cards, limit per user to say 5 (yes some people would just backdoor multiple accounts). They could thwart the scammers by offering those cards in batches spread throughout the day so one users could be sitting at his PC with multiple accounts open at 12:01AM PST in order to pick up ever single Gift card.With a limited number of cards in the wild they should be able to cover any withdrawals they need to make per day to cover the dollar cost of the cards, the price of the cards are fixed and Gift cards are not refundable. Now if you use that card today or a month from now doesn't overly matter and any returns would be based on the dollar price of the product purchased with the gift card. There may be some legal room in there too since they would only be exchange a card for BTC vs. BTC for a physical product.
Good idea. At least it's something.
