This is a “reactive rebate”  so resellers should not actively solicit or advertise the price protection offer, according to an HP email.

HP  told VARs that it will offer full refunds to “resellers and our end customers who purchased the TouchPads at the higher price (prior to 8/20) and who have requested a rebate or a return.”  

HP launched the long-hyped product July 1 at $499 but quickly discounted it when buyers stayed away. Then it shocked the world last week by announcing that it was nuking tablet business.

HP distributors that took on product will be asked  to help process refund claims.

This is good news to loyal HP VARs who followed the company’s request to pre-order and tout the slick-but-now-dead devices and paid over $300 for them. It’s hard to make a profit when your vendor suddenly kills a product that lists for $499 and launches a fire sale offering the same untis for $99. Impossible, in fact.

HP’s cost for the tablet was reportedly $380 on which VARs could make 4% margins or $20 per unit.

Several VARs lauded the TouchPad’s multitasking capability and iPad-like interface but said HP priced them too high initially. They should have come out at $399 initially instead of trying to out-Apple Apple, one said.

“You can’t come out at the same price as iPad unless you have something dramatically better. The problem with TouchPad was a lack of apps,” said one long-time HP partner.

Let us know what you think about this post; email Barbara Darrow, Senior News Director at bdarrow@techtarget.com,