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Are Rebates Scandalous?
theodp asks: "Motley Fool offers a dead-on take on the computer mail-in rebate fulfillment process--Once I receive your 'claim,' I will begin to 'process' it. Assuming that you filled out all the information correctly, and assuming nothing is missing, and assuming your claim doesn't get lost somehow, and if you call or write a few times to check on your claim's status, then I will mail your check within 10 to 12 weeks. Maybe. Or maybe it'll be four to six months. Or never." What are your thoughts on rebates, and have any of you noticed who, at least in the computing industry, is more trustworthy with rebates than others?
Update by J :
Here's the
short version
of the article.
At times I forget to send them in. What should happen is the selling company, should take it upon themselves to handle the rebate for you in store, instead of you dealing with the nonsense paper trail of it.
Like most Americans, I like my free money right here, right now -- mostly because I won't remember the purchase when I finally get the rebate. Getting a check for $50 in the mail three months after I bought that hard drive is like winning the beauty contest in Monopoly. Wow, fifty bucks out of thin air, cool!
So for that reason I don't like rebates. I like my savings at the register, not in my personal cash-flow analysis at the end of the quarter.
levine
They're buying your personal information so they can either use it to fill your mailbox with their junk or everyone's junk. There's no other reason for them not to do rebates at the POS/cash register.
Regarding computer-related rebates, they are even worse. I bought some CDR media that was "$2 after $10 rebate". I had a weak moment and figured it was worth the $10. The Best Buy receipt offered a way to file your rebate request online. I thought, great! Mailing rebate requests is sure lame!
So I go to punch in the rebate information and am presented with a page that I can print and USPS mail in.
Completely worthless, except now some additinoal "rebate processor" company also has my information.
Part II
Rebate tracking - great forum from FatWallet.com, search for company name before you purchase anything that requires a rebate.
I would recommend Dell, Amazon.com and Viking Components for rebate deals - never had problems with either one of those, and just got another $50 Dell Axim rebate in the mail today. The rules are always clear, the fulfillment is on time.
The whole rebate thing does strike me as odd - if they can pay you back the money, why not lower the price right there in the store? You still have to pay state sales tax on the before-rebate price.
When you think about it, companies offering rebates could have as well simply lowered the price of the product and make more convinient for consumers.
However, they *know* that most people: (1) forget to send them, (2) lose them, (3) fill them incorrectly (even a misspell of a city name is "wrong" for them, (4) or simply cannot fill them because the box where the product came in (and that had the barcode scan number on it) has been long gone in the trash.
In other words, it's a way for them to screw you. I have to admit I only received *one* check in my entire life out of a rebate, and it arrived so long after the purchase that I had already forgotten about it.
My thought is that any self-respected company who *trully* cares about customers, should simply drop rebates and lower the price of the products (even if not by as much as the value of the actual rebates).
Curiously enough, these are much the same set of reasons that a rebate is bad for the consumer.
There is one other bad thing about rebates from a consumer's point of view: you pay sales tax on the non-discounted price of the item.
www.eFax.com are spammers
Seriously, most of the time, I can buy gear via mail order for about what the store price minus rebate is. I've had enough rebates "lost" to be very, VERY wary of them. Just give me a decent price to begin with and quit wasting my, the post office's, and some minimum wage working stiff at the processing center's time.
I can't help wondering whether these rebate processing companies aren't a variant of the coupon fraud crooks, where criminals gather those grocery store coupons and submit them for credit without anyone actually buying any items. al-Qaeda is/was involved in those. "When big corporations use rebates, they're funding terrorism!" (cue scary music...)
I'll give Best Buy credit for having the best rebate system out there. They print out separate "rebate receipts" and rebate forms at the cash register. I emailed them a complaint about the racks of rebate forms they used to have at their stores so I'd like to think I had something to do with that, even though they didn't quite get the hint that rebates in general are fscking repulsive. I think I've received every rebate since they started their new system though, averaging 2 months turnaround time.
A little less than a year ago i bought a Maxtor 160Gb hard drive that was advertised as like $200, after $30(store) and $40(mftr) rebates. I bought the drive, got both my rebate recipts and the forms, sat down to fill them out, and hey, guess what, BOTH CompUSA and the manufacturer wanted an original UPC, no photocopies. There being only 1 UPC on the box i was SOL on the $30 rebate, kinda sucked.
"Sic Semper Tyrannosaurus Rex."
The trickiest rebate offer I dealt with involved cutting off thick cardboard UPC stickers. Unfortunately the company in question had three different bar code stickers on the box -- all apparently different. Yet only one was acceptable for the rebate. By the time I found out the wrong one had been sent in the rebate was over. Very, very annoying and ended up "costing" several hundred dollars.
on MSFT Flight Sim was so small I had to take it to that guy in the mall that writes your name on a grain of rice so I could fill it out properly.
I have submitted over 6 Frys rebates and everyone has been rejected - something always seems to be missing. At least they send me a notice saying so. I have nothing against Frys (you can see I have kept buying stuff from there), but before I buy I always remember to translate their advertised price to the price without the rebate before deciding, because I don't even bother any more.
Many posts correctly point out that these discounts are designed so that many who intend to send them in never bother/ succeed. But there is actually a more subtle reason as well; the same reason that supermarkets use coupons (as opposed to just lowering the price).
That reason is price differentiation. If the company charges a high price, they sell few units at a high margin; a low price means more units a lower margin. By introducing these coupon schemes, they can charge different prices for the same product. Price-sensitive customers go through the trouble of filling in the coupons, insensitive ones don't. It is the best of both worlds!
Another example of price differentiation is university tuition. There it is called "financial aid" - a scheme clearly designed to make everyone pay exactly what they can afford (note: I am not saying that there is something wrong with financial aid; I am just pointing out that it is very much in the financial interest of the universities).
Tor
...for the inventor of rebates.
Basically it's an interest-free loan to the vendor. You get to pay sales tax on the pre-rebate price, and then have to jump through hoops to maybe get the rebate months later.
The store ought to be required to hand you the rebate at the time of purchase, or submit the information electronically at the time of purchase...but then they'd actually have to give you the money, wouldn't they? Stores can take rebates and use them for reaction mass, as far as I'm concerned.
"Thank you for processing my rebate. I have marked my calendar to receive my rebate no later than (2 months to the day I mailed it.)" = Fill in () appropriately.
Just below this type your information from the receipt including SKU numbers, your mailing address and store of purchase plus how much you are expecting. Printing an actual two month calendar and highlighting the day of rebate is a nice touch.
I will gaurantee you will not have another "missing" rebate. They think, "looks like this guy would sue over a $5 rebate, we better get it right"
A buddy of mine goes a step further and puts:
"Consumer protection laws in my state require that rebates be processed in 8 weeks"
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
A good friend of mine works for Continental Promotions Group, Inc, a Scottsdale, AZ company that processes rebates for Costco, Dell, and several other large corporations.
:)
... go into some office machine store and just feed the rebate form into a typewriter or whatever. At least make damn sure that the claim is clearly written... if you're a's look like o's you're bound for trouble. Assume that the person who will be processing your rebate is completely incompetent and natively reads Sanskrit.
Most of the stories I've heard are largely due to the incompetence of the home workers (many of whom do not speak english as a first language) that basically open the envelopes and enter all the relevant data. Their pay? US$0.08 an entry. Not the highest pay around--working dilligently and competently this comes out to about $10/hour.
The reason it takes 10 - 12 weeks is that CPG will usually invoice the company they're contracted with at the end of the month and there's considerable turnaround time. Costco, on the other hand, directly wires the rebate money to CPG--I got my $2 Dove soap rebate a couple of weeks after I mailed it in. Another reason to shop at Costco.
My friend works the phones at CPG and basically the problems that he handles with regards to Dell are data entry errors. From this I derive that it's best to type your application
Also, he sees a lot of situations in which the rebate didn't apply to the customer for whatever reason because a pushy uninformed Dell phonemonkey just wanted to get off the line and close the sale. Make sure that the product you're getting actually has an applicable rebate. Just another reason to not listen to salespeople and by your stuff online.
I didn't tell you this, but most rebates can be reissued for $20 and under cashed or not because it's too much trouble for CPG and their clients to work the specifics out of actually sending out a STOP payment. Get double the rebate simply by calling them and inventing some story.
The average rebate takes ten or so weeks to process, so mark that window on your calendar and a halfway point to remind yourself in a month to call up and check on the status of the rebate by calling up the 800 number.
Most of what the article bitches about is largely just symptomatic of lazy people forgetting receipts and the rebate itself. If the money is important to you, don't forget stuff. Don't throw anything away until you have confirmation that the rebate is on its way or you actually have the check in hand. It's not that difficult to stow a box in the garage.
Keep on top of things and you should have no problem... I got dicked by Ericsson for a hundred bucks because of some missing paper and by the time I called the window expired--this is what you get when you expect the rebate to come without problems! They of course said they sent a letter in response, I never got it. Buyer beware.
"[T]he single essential element on which all discoveries will be dependent is human freedom." -- Barry Goldwater
I bought TurboTax for the past few years and sent in the $40 (approximately) rebate with ALL of the information filled out correctly. I swear I spent at least 30 minutes putting together each rebate package, copying the contents in their entirety and mailing them on time from the post office. Out of $140 (approximately) that they owe me in rebates for YEARS now, I received only about ten bucks for a state rebate. I assure you that everything was done correctly.
Then, my mother bought a Sony laptop. There was a $100 rebate. I spent over an hour putting together the entire rebate package, going over the rebate checklist several times, and I *know* for a *fact* that I did it correctly. I also sent it in ahead of the deadline by nearly a month. A couple of months later, my dad (who checked my email) said that I got an email from Sony stating that there was some error in my preparation of the rebate papers. I got so pissed off at that point that I decided no longer to buy products that offer a rebate of any kind.
Yes, this story is absolutely true. Rebates are fraudulent and these companies get away with it because they know that most people consider it too much trouble to go after them for a rebate and the rest will call in a few times, so when lawsuit threats come, the company can shut them up by mailing the check then. Sony can go to hell. Intuit can as well.
COMPANIES, WHAT YOU SHOULD DO: Make the stores handle the rebate process. The store should charge me the price AFTER rebate and then deal with the distributor for the money, the same way as coupons are handled at the grocery store.
http://www.wordorigins.org/wordorr.htm#Rebate
Connecticut has a Rebate Advertising law requiring retailers who advertise the net price of an item after deduction of a manufacturer's rebate to pay consumers the amount of that rebate when they buy the item. If the retailers don't wish to do this, they cannot advertise the after-rebate price as the final price to be paid by the consumer. Thus, there should be no confusion about the amount the customer must pay at the cash register.
Here is the law:
Sec. 42-110b-19. Advertising "free," "reduced," "discount," "below cost," or a rebate
It shall be an unfair or deceptive act or practice to:
(a) Advertise any merchandise or service as free by the use of the word "free" or any other terms of similar import when the merchandise or service is not, in fact, free (see (d) below). Failure to disclose any and all terms, conditions and obligations required of the consumer shall be a violation of these regulations.
(b) Advertise the price of merchandise or service as a reduced or sale price, or compare the price to a previous price unless the advertised price is lower than the actual, bona fide price for which the merchandise or service was offered to the public on a regular basis by the advertiser, for a reasonably substantial period of time prior to the advertisement or as a discount price, unless the advertised price is lower than the price being charged for the same merchandise or service by other sellers in the area; provided, however, in the case of a new product, if the advertised price is less than the price which the advertiser, in good faith, expects to charge after termination of the introductory sale, there is no violation of this subsection. The actual price after the sale shall be evidence of the advertiser's good faith expectations.
(c) Advertise the price of any merchandise as below cost, unless the price is, in fact, below the cost for which the merchandise was purchased and prepared for sale by the advertiser.
(d) Advertise merchandise or service as free or the price of merchandise or a service as a discount, reduced, or sale price if receipt of such merchandise or service is contingent upon the purchase of other merchandise or service at a price which is higher than the actual, bona fide price at which the merchandise or service was offered to the public on a regular basis by the advertiser for a reasonably substantial period of time prior to the advertisement, or at a price which is substantially higher than the price being charged for the same merchandise or service by other sellers in the area; provided, however, in the case of a new product, if the advertised price is less than the price which the advertiser, in good faith, expects to charge after termination of the introductory sale, there is no violation of this subsection. The actual price after the sale shall be evidence of the advertiser's good faith expectations.
(e) Advertise the availability of a manufacturer's rebate by displaying the net price of the advertised item in the advertisement, unless the amount of the manufacturer's rebate is provided to the consumer by the retailer at the time of purchase of the advertised item. A retailer will not be required to provide the purchaser of an advertised item with the amount of the manufacturer's rebate if the rebate advertises that a manufacturer's rebate is available without stating the net price of the item. For the purpose of this subsection, "net price" means the ultimate price paid by a consumer after he redeems the manufacturer's rebate offered for the advertised item.
These guys are the best (don't flame me yet). Years ago they were doing a $50 rebate on the latest and greatest office. The real neat thing was instead of just the usual UPC code they accepted the following, from ANY of the products you UPGRADED from.
Top of the box
Front page of the manual
Paper insert from the CD. (didn't specify front or back so I used both.
You had to have a receipt (real tough to make..)
The original rebate coupon (slick paper copied great at kinkos)
So at the big company I worked for they actually bought boxed versions, no license agreement and we kept them in the storage room, TONS of them.
Toughest part was the limit of two per address. Ended sending them to every friend and relative I had. Also tried (and succeeded) by slighty changing my name and street name for multiple receipts at the ole home address. Worked, and redemption time was pretty quick. We called them presents from "Uncle Bill" Odd thing though, about eighteen months later I did start getting random junk mail to those bogus address...
??? Profit.
Another thing I don't see people addressing is the topic of tax.
When you buy an item for $1,000 (which includes a $100 rebate), you're actually paying the tax on the $1,000, not on $900.
So, make sure you factor in the tax factor before committing to a rebate sale. Actually better yet, everyone should just boycott any and ALL items with rebates. It's all just a scam. If they wanted to give you the money they would've discounted it at the counter.
eTrade SUCKS
Also, how to prevent information from being sold ? You can't, but how do you deal with potential SPAM ? Each company gets their own rebate address. Also the only company that really seems to sell information is Staples.
I've gone out now 3 years now, and spent over 1500 and gotten 1200 of it back. (and I DO track my rebates).
What people are probably doing (not doing ?) is following the instructions EXACTLY so of course they get screwed.
The only products I won't buy now are Mad Dog (they keep screwing my rebates claiming a problem).
UPS Sucks
A big motivator for some folks buying laptops and other big ticket items for their small-medium size business is that the purchase price is a tax deduction (and reduces cash on hand at the end of the year), but the rebate is totally off the books.
So that $5000 projector yields not just $1200 in rebates, but a tax free $1200! That makes it equivalent to something like a taxed $1600 worth of income or so.
I worked at a company that made scanners several years back, and like most high tech firms, they didn't handle their own rebates. They hired a special rebate company to do it. A good number of people just plain fail to mail in their rebate forms, and that's how the rebate folks make their money. The statistic that was quoted to me at the time was that for a 50 dollar rebate, only 50 percent of the people managed to mail their forms in. For a ten dollar rebate, only ten perent of customers mailed their stuff in. I have no idea how true that was, but it seemed to make sense, given the fact that I've never mailed a rebate coupon in at all, for any amount. Rebates are an entirely sleazy practice, but then again, what isn't in big business these days? It's just another example of how corporate america makes people jump through hoops to get basic service, in the hopes that most people will just give up. I just pretend the rebates don't exist, in the hopes that they'll go away. I look only at the price that I'm paying going out the door - if that doesn't work for me, I buy something else. Shawn
So what you're telling us is that over the past 3 years you have *loaned* several companies $1200, interest free.. and don't have a problem with that?
No. I think he was trying to say, in return for loaning those companies $1200, he has received discounts on goods and services.
Just suppose that he spent all of his money in year 1, and he could get a rate of 4.00% a month on this money, had he kept it:
Nominal Rate of Return: 4.00%
Investment Duration (Years): 3 years
Compounding Frequency: Monthly
Compounded Rate of Return: 12.73%
$1200 * 12.73% = $152.76 opportunity cost.
He obviously thought that $152.76 + $1500-$1200 = $452.76, was worth $1500 worth of goods and services.
My first ever post WOO HOO! =) Ok, I have been using rebates for many many years. I have about a 99% success rate. The only one I lost was a $50 rebate for a tape drive. When I called about it, it sounded like two guys running a business out of their garage. They claim it was lost of course. Ok, So I use to just throw everything in an envelope and send it on its way. That was back when I had only 1 or 2 pending rebates. Then, after the tape drive ordeal, I started keeping copies. Actually had to call a few companies when I didn't get a rebate. It's funny, every time I ever had to call they ALWAYS said the check was ALREADY mailed and I did recieved the check within two to three days of calling (and the postmark date was the day or day after I called). Then the rebates got too many to deal with manually. So I set up an asset account with Quicken to track exactly how much $$ I was owed in rebates. It also allowed to to quickly see which rebates were overdue. So now I have a pretty good system. I scan everything I send. Everything is taped to one sheet of paper with annotations indicating all the requirements. It's been pretty good. Now the rules have changed. I got some pretty substantial rebates from CompUSA and some pretty small ones. I glanced at a random rebate for that I received and everything looked normal. Then a few days later I went to fill them all out. The BIG rebates ($70, $100) had a requirement that the prbate be postmaked the NEXT DAY (that is about 4 days from when I purchased the items!!!). The smaller rebates were the normal 'postmarked within 30 days of purchase'. The big ones were withing the SAME WEEK!! Not many people rush home to fill out their rebates. They want to play with their new router or hard drive (which may take 4 days for some people). So, yet another way for the companies to deny your rebate. What's next 'Must be postmarked on a Monday before noon or Thusday after the post office is closed'.