Store’s rainy-day sale
won’t dampen profits

Furnitureland is one of a
growing number of firms promoting
sales by betting on the weather

By Peter Wagner
Star-Bulletin

A Hawaii furniture store is praying for rain on October 13. A New York insurance company is betting it won't.

Furnitureland, which has stores on Oahu, Maui, and the Big Island, has been running hundreds of television and newspaper ads offering to refund purchases made between Sept. 8 and Oct. 5 -- if it rains at least .25 inch at Honolulu Airport between 9 a.m. and 9 p.m. on Oct. 13, Discoverer's Day.

Nothing would make the store's owners happier than to give away every stick of furniture -- because it's been insured for the day.

"The first two weeks people didn't understand what it was about," said "Furnitureland Dave" Rolf, promotion director. "Then we started running a commercial saying we already made the insurance payments so we wanted it to rain and it's really picked up in last few days."

The store bought a policy with Customized Worldwide Weather Insurance Agency Inc., an eight-year-old firm that specializes in weather-related promotions, concerts, fairs and festivals. Premiums -- in this case two percent to five percent of proceeds -- are based on the event's location and "weather peril," said Michele Borday, director of promotions at the insurance company.

"We insure against rain, wind, temperatures, snow, fog, hurricanes, lightning -- anything weather related," she said.

The firm does careful homework, monitoring data from more than 300,000 weather stations around the world to determine probabilities.

Weather promotions are a booming niche market for insurance companies, Borday said, adding Customized Worldwide Weather has insured nearly 700 events in the past five years.

Car dealerships, jewelry stores, appliance stores, furniture outlets, and other "high ticket" retailers are finding the technique brings a jump in sales.

Royal Hawaiian Heritage, a chain of 14 jewelry stores across the state, has seen a 20 percent spike in sales during "beat the heat" promotions in the past three years. "It's been very successful," said Maggie Breeden, the company's chief executive.

Customers came close to winning refunds last month when the mercury hit 91 degrees on Aug. 31 -- two degrees shy of the 93 degree mark.

Borday said Customized Worldwide Weather last December refunded more than $70,000 to customers of a jewelry store in Casper, Wyoming betting wind velocity wouldn't hit 40 miles per hour.

But payouts are rare: about five or six have been made by the insurance company out of about 300 weather promotions in the past three years. Payouts for scheduled events such as concerts or fairs is much higher, about one in three, Borday said.

So what are the odds it'll rain .25 inch at Honolulu Airport between 9 a.m. and 9 p.m. on Oct. 13?

"Pretty low, especially between those hours," said Paul Jendrowski, lead forecaster for the National Weather Service in Honolulu.

The record for that day -- 1.38 inches -- was reached in 1965 over a 24-hour period, Jendrowski said. The long-term monthly average at the airport is 2.28 inches. But last year, it rained just .07 inch in the month of October -- .00 on Oct. 13.

Still, rain is unpredictable and a Kona weather storm could dump a winner on the airport, he said.

Rolf, meanwhile, is hoping it'll rain cats and dogs.

"We'd be overjoyed to see our customers get the refund," he said.