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

[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.

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.

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.

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.