FTC Tells CompUSA to Pay Up QPS Rebates

prostoalex writes "FTC told CompUSA they will have to keep their word on paying out rebates for QPS equipment purchased at CompUSA. QPS is currently bankrupt, according to the article, although it's not clear whether they went out of business before or after the promised 6-8 weeks deadline came. CBS MarketWatch says this should spur rebate re-evaluation among other electronic retailers. The habit of offering rebate incentives seems be especially notorious in the consumer electronics and computer hardware industries as a third of shoppers for such goods bought a product with a rebate offered. Reason for such popularity? 41% of shoppers never send in their rebates."

Comments

Common sense

[dauthur]

"41% of shoppers never send in their rebates."

Of course. It's too much hassle to sign a receipt and mail it to the company and wait a few weeks, in which they'll most likely forget all about the whole thing, and get a surprize $30 in the mail. Laziness costs more than cigarettes these days.

Re:Common sense

[blahplusplus]

Well considering the amount on peoples plates in modern life, remembering to send in a rebate to save $20, $30 when they have so much to consider doesn't seem unreasonable. The fact is offering rebates should be illegal because the reason they are offered is because they are burdening the customer with after sale Bullshit and schemes that amount to con-artistry.

The fact is they pump up the price and offer the rebate, and the rebate usually only brings the price of the item to 'market' value for someone who spends time looking for the lowest prices. Rebates are bait and switch, no bones about it.

I've sent in rebates I have not recieved. I also had rebates that "expire" by the company claiming that it "didn't get it on time" a month after the fact, when they should have recieved it within two days after mailing it.

There are actually 'expiry schemes' where they have expirations and the stores offering them continue to advertise 'rebates' knowing that the expiry will keep them from having to put out money, if they even do it at all.

The fact is, if you can't sell the item for the rebated price outright, you have no right to even offer the rebate in the first place.

Rebates should be illegal or legislated at the time of purchase (and advertisment of the rebate) the customer who bought it then does not have to worry about expiry.

Re:Common sense

[Anonymous Coward]

The fact is offering rebates should be illegal

I'm glad you're not in charge.

Re:Common sense

[ScentCone]

offering rebates should be illegal

Oh, please. What you mean is that fraudulantly offering an unredeemable rebate should be illegal, which it already is. Rebates are usually offered by the manufacturer, not the point-of-sale retailer. For the manufacturer, it's a form of advertising, and they usually let a third party handle the transaction, usually by snail mail. This takes time to process.

Rebates are bait and switch, no bones about it

No they're not. I've never seen a low price on a product that was low because of a rebate when that wasn't clearly marked as a factor in the price. True on tags, true in mailers, and on web sites. Someone who is shopping around for a low price on a competitve item should have the IQ to actually see and understand the words "after mail-in rebate."

Personally, I love the way that Costco handles it: you get a register receipt with a URL and code on it, you visit the site, spend 15 seconds keying in a scrap or two of info, and you get a check in a couple or few weeks, without fail. Another reason I spend every consumer dollar I can on worthy products there (I know, which means a lot of those dollars go to China - but unless you're looking for a $400 handcrafted New England birdhouse or something, that's where the commodity brands ship from these days).

I've never had a problem with a rebate from Best Buy, Circuit City (who sometimes redeem the rebates at the register), an allergy drug manufacturer, car parts vendors... come to think of it, I can only think of one that seemed to have gone un-payed, and it was from a local grocery store several years ago, and was hardely worth the stamp and the envelope.

If you think you've got a fraud problem with a retailer, go to the Better Business Bureau. If you think you've got a fraud problem with a manufacturer, talk to the FTC about that instance unless you know for a fact that they're scamming everyone (and five minutes on Google will tell you that). Otherwise, if you don't like rebates (and I understand - on the big ones, it's annoying to know that you're minus that cash flow for a month, but figure that lost dollar-or-so of interest into the price you just paid on that piece of hardware, and get over it), just don't buy stuff through those channels. Use eBay instead, or choose a brand that allows the retailers to take incentives off of their own costs, and represent that during the transaction (which is how car and most furniture dealers do it, but then you've got to know the scoop - with a rebate, the retailer can't pocket the difference if you weren't aware of the incentive).

But mostly, don't penalize honest retailers, manufacturers, and consumers with a body of regulation that won't have any impact on people who are already making the decision to operate outside of the law. When scammers are already using fake/impossible rebate schemes (which can be prosecuted), another regulation saying they can't isn't going to help unless you remove that entire marketing mechanism from the market. If your objective is to get more government involved in transactions between private parties, though, you're headed in the right direction.

Re:Common sense

[Cryptnotic]

offering rebates should be illegal

We have too many laws already. We really don't need any more "protecting the stupid" type of laws. Really, have some faith in humanity. People can figure these things out for themselves. In the case that companies do things that are illegal, recourse is available in the courts.

Glad I don't have to deal with that.

[eddy]

I'm glad rebates of that kind doesn't exist over here. Here rebates are pretty much unheard of besides for groceries, and those are handled directly at the checkout, no mail-that-in-later stuff.

Doesn't take a genius to figure out that all that handling just makes it more expensive for the customers in the end.

Rebates should be illegal

[Spy Handler]

Seriously. It's borderline fraudulent. There are laws to protect consumers, this should be added to it.

I have personally mailed in dozens of rebates in my lifetime. I have received less than half of these back. Sure, some probably got lost in the mail. But even though the USPS does suck, their success rate in delivering an envelope to its destination is still well over 90%. So what happened to the other 40% of my rebates?

Now I'm not gonna hire an attorney over a $20 rebate I never got, and they know this, so they can sit there and go "eeny meeny miny moe" and pick out every other rebate request and toss it in the trash.

They (the gov) don't even have to outlaw rebates. Just make it false advertising to put prices in ads or store displays with the rebate amount already subtracted.

This is why

[tuxlove]

You know why 41% of people don't send in rebates? Because most of the time you never get your damn money. It's not worth the $10 or whatever to fight with customer service when your money never arrives. I even signed up for a recurring rebate for a drug prescription, and they sent me all the materials and a rebate card with my name on it; shortly thereafter came a letter saying that they had no record of me and couldn't issue my rebate. Then how did they issue my personalized rebate card?! This sort of fraud seems standard practice with rebates. It's no wonder nobody sends them in. I've given up.

Re:I deliberately don't consider rebates when buyi

[digitalhermit]

I had similar problems with some retailers.
From: http://www.miami.com/mld/miamiherald/8138630.htm

After being extremely diligent in filling out the paperwork and making sure that I adhered to all the requirements of the offer, my rebate was still denied by Maxtor (a digital storage manufacturer) because the paperwork ''wasn't received in time.'' If true, it would have meant that it took the postal service more than two weeks to move a letter about 20 miles from my home to the Miami rebate center. It was only after contacting the Better Business Bureau that was I able to get my request honored.

After doing an informal poll of some of my co-workers and associates, many of whom work with information technology, I was surprised to learn that almost all of them had had rebate requests denied. Unfortunately, many didn't send their requests via certified mail because the rebate amounts, often $5 to $25, didn't seem to warrant it.

After my experiences, I would suggest a few steps:

Read the rebate requests thoroughly. Many times, they require the actual register receipt and not a copy. Some will require that the rebate item is circled on the receipt even if it's the only item listed.

Keep physical and digital copies of your paperwork and receipts, including the envelope used to send the forms. This makes it easier to forward copies to the state consumer affairs department, Attorney General and the Better Business Bureau.

Submit the paperwork immediately. Retailers count on customers to lose receipts or forget to request the rebate.

Use certified mail to prevent the convenient excuse of ''late mail.''

If you're denied your rebate after complying with the offer, make sure to send your information to your state Attorney General's office. It can't take up your case directly, but it can help establish a pattern of activity.

Here's my beef

[tkrotchko]

"What you mean is that fraudulantly offering an unredeemable rebate should be illegal, which it already is."

Here's my beef.

Rebates in some theoretical sense are fine.

There's two things I have a problem with, one of them is philosophical, one of them is practical. Lets start with the practical.

I have in several cases, sent in rebates. I'm usually very careful. I have in several cases (a) not received a response ever or (b) The rebate fulfillment house claims I didn't send in enough paperwork (and well past the deadline for submission.

I have no recourse in these situations. I'm just out the money. And what's worse, nobody has an incentive to make this right, because the company is simply out money if its correct, and they get more money if I'm screwed.

On a more philosophical level, I have a beef with rebates. Lets go through this:

Merchant: Buy this widget for $2, and I'll give you $1 back in the mail.

Me: Why not just sell it to me for $1?

Merchant: Because I'm hoping you'll forget to send it in, and I won't have to pay you that $1.

You see? Its almost fraud but not quite. So from that viewpoint, I understand why people think it should be illegal to offer rebates.

But even if you disagree with my philosophical conclusion, how do you deal with the practical aspect of a system that has no ability to be corrected? Its like playing the lotto as to whether that rebate actually comes.

Rebates are part of a flexible pricing plan

[PenguinOpus]

I disagree with several of the posters here who say that rebates ought to be illegal and offer no value other than to return products to market value.

If the rebate is not paid, then that is fraud, otherwise:

Rebates are the equivalent of a flexible pricing plan that allow those people that care enough about the $20 to go through the hassle of completing the transaction. At this point most consumers are fully aware of the annoyance level and factor that in to their buying decision.

Poor/Parsimonious people who really need the product will follow through, get the discount and purchase the product. The rest will do so at some much lower hit rate (well below 50%).

This means that the price people pay varies based on need.

The result is that more people are able to buy the product so it can be manufactured and sold in higher volume (and therefore possibly at lower cost).

Regarding the cost benefit of rebates, I can state definitively that the best rebate deals at Fry's are usually selling products below cost of manufacture (eg 250G HDDs for $99, network hubs for $0). Sure, some products use rebates to return prices to the discounted price of their competitors but smart consumers can do the math, realize that, and decide if its worth the hassle.

Even without rebates, the airline industries pricing model, convenience-store pricing, and apparel industry off-season discounts are all examples of flexible pricing to capture different consumers at different times with exactly the same product.

As a lazy consumer, I wish everything were flat priced so I would never have to worry about whether I'm getting "screwed" by paying more than the best (or even average) price.
Legislating flat-pricing would be nice, but I believe it would end up producing higher-priced products overall.

Rebates rule...

[jwcorder]

I don't understand the issue here people. I don't mind rebates and I actually love Staples new easy rebate program. You don't have to send in any information, just go to a website and fill out a short form and 4-6 weeks later here comes your check.

I can honestly say that in my 25 years as an active consumer, I have had less than 10 rebates give me any problems. It does require about 10 mins to carefully read the instructions and fill out the form, but as long as you have the ability to pay attention to detail, you shouldn't have a problem.

On the rebates that I have had issues with, normally a simple call to their customer service line will get results. Especially if you start the conversation by stating that you have no problems informing your local Attorney General of their failure to comply with their rebate offers.

My worst experience was with Office Depot which has a notoriously bad rep for not fulfilling rebates. To get my rebate from them last year, I finally took a handful of paperwork from my small claims court to the store where I bought the product and the Store Manager seemed happy to cash out the amount of my rebate to me on the spot.

Rebates are okay by me. I don't care where you look online, you can't find a 160GB hard drive for 30 bucks straight out. Nor can you find a Dlink 802.11G Router and PCM Card bundle for 20 bucks. Both of these deals I got within the past 6 months with rebate offers.

rebates are a scam

[The Cisco Kid]

Personally I find 'mail in rebates' just a way to advertise a lower price than they are really selling an item for and get away with it - They put *29.95* up there in large font but then in small print below it include (after $50 mail in rebate).

If they put 29.95 as the price in large print, I should be able to walk in the store with 29.95 (plus tax, etc), and be able to walk out with the item. Its just a scam that I have to *loan* them an additional $50 interest free that I then have to jump though hoops to *maybe* get back - and yes I'm sure they count on lots of people to not even bother.

For that I would never consider rebates (except in-store ones) when comparison shopping. I go by the amount they expect me to pay at the register.

41% is good

[Anonymous Coward]

If everyone sent in their rebates, there would be no more rebates. Companies can offer insanely low proces with the rebate because they can bank on the 41% that don't return it, thus they make a profit. If everyone ent in the rebate they would make no profi, hence the rebate would go away. We should APPLAUD those 41% for allowing the rest of us compulsive people to get good bargains.

How to get your rebates, or at least a good laugh.

[Futurepower(R)]

How to get your rebates:

Here are my opinions about how to get your rebates and how to think about rebates in general. We've applied for several thousands of dollars of rebates, and gotten almost all of them, usually after a lot of work. I'm not saying you should get involved with the rebate game, but you may get a good laugh from reading about it. Getting rebates got to be a hobby with us. Like a lot of people, we carried our hobby to extremes. My wife just read this and said, "Oh, it's not a hobby, it's painful when I need to call", but she feels very different when she is in a store that has ridiculously low prices after rebates.

Use the F word: Just say "Fraud". There are only a few rebate fulfillment companies. Once you are on the list as someone who uses the fraud word, they don't try to steal from you.

Always be friendly. Always be businesslike. Call the rebate company. Politely ask the name of the person who answers. Write that down. Mention that offering a rebate and not sending it may be fraud. The employee will usually give some scripted lie, like saying they didn't receive the rebate request. Just politely continue asking for your rebate, and mention that, in legal cases involving fraud, it usually won't be the top managers that go to jail. Mention that anyone who has knowledge of the fraud may be prosecuted.

The rebate staff person does not want to risk legal trouble for a minimum-wage job. They are authorized to give you your rebate in extreme cases. Be an extreme case.

The rebate company does not want to lose a staff person, because it costs money to hire and train them. That is what is likely to happen if the staff person is afraid of legal problems. The manager of the rebate company will tell the staff that there is no chance they will be prosecuted for fraud, which will only make the staff more scared. In this particular case, this particular F word is very powerful.

More tips:

Beware of worthless items: Be aware that many computer items that are sold with rebates are actually worthless. They have been found to be so defective that they could not be sold normally. So, they are advertised as free after rebates, or for a very low cost after rebates. (Usually they use more than one rebate to make it less likely you will do the work.)

We bought three Netgear FVS318 router/firewalls from Fry's. They were advertised with a rebate. After many lost hours we found: 1) The remote administration of the FVS318 requires sending the password in the clear, so there is little remote security. 2) The Log Out menu choice sometimes does not log out. Sometimes the FVS318 becomes confused, and cannot establish a VPN. 3) There were other bugs, more than can be recounted here. 4) Netgear first-level technical support is (at least partly) in Tamil Nadu, India. They are friendly and will happily talk for hours. However, Netgear does not appear to have given the Tamil employees much training. So, in my opinion it is arguable that no one should buy the FVS318. Maybe that's why the rebate offer.

Fry's and Netgear played another trick with the FVS318 rebate offer. They wrote a very long rebate form, with the name and the address at the top, as usual, but asked for the name and the address again at the bottom. If you didn't see the second request for name and address, or thought it was a mistake, they denied the rebate request. We didn't enter the information at the bottom. Our rebates were denied. A friendly Fry's mid-level manager told us she would take care of it, and, after two or three calls to her, she got Netgear to give us our rebates. Elapsed time: 5 1/2 months.

On the other hand, there are good deals: We bought four CD recorder drives for $5 each after rebate that work very well and came with a non-restricted copy of Roxio Easy CD Creator 6.

Shop on the day after Thanksgiving: The best time for rebates is the day after Thanksgiving. That's when people begi

Idea of rebates is good, just bad implementation

[Spock_NPA]

Rebates serve a real purpose that benefits the consumers. Rebates allow manufacturers to sell the same product at two different prices, with the customer self selecting which price group they belong to.

Generally, those who are more affluent ends up not sending in the rebates since the time it takes them to fill in the rebate forms is worth more than the amount to be recieved. Those to whom the rebate amount is more valuable will tend to send in the rebate. However, the rebate system as it is implemented today has some real problems. They take too long to process and are too unreliable. But the idea of rebates is not an evil one.

So Pres Bush is responsible for rebate fraud?

[Anonymous Coward]

What started out as an interesting post ended up being an anti-Bush rant. How you got there, I have no idea.