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

[wk633]

I read the directions and send them in religiously. Got a card back from Belkin saying I hadn't sent in 'some required information'. Not enough info on the card to tell me what information, or what rebate, or when. So what the hell do I do? Stop buying Belkin is about all I can do.

I get 90% of my rebates back, but those that I don't- I really have no recourse, and it's a ripoff.

Just ban rebates

[Anonymous Coward]

Rebates serve 3 purposes. One is to take advantage of people who don't send them in. Another is to trick people by offering rebates that expire too soon for people to actually get them (see Tiger Direct - rebates often expire in a few days). And lastly, in a corporate environment I've heard of _people_ getting rebates for corporate purchases - this amounts to a way of bribing purchasers or other such corruption. If you want to offer a discount, just reduce the price. There's no ethically decent reason for rebates.

Retailers also like rebates because...

[GLowder]

Retailers generally get to report earnings based on dollars brought in at the register, _then_ they pay out rebates. So even if 100% of customers send in their 50% off rebates, ACME gets to report $100,000 in widget sales, when really they only sold $50,000 in widgets.

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.

The State Goverments likes it that way

[Anonymous Coward]

They really have no incentive to change it. Since the rebates NEVER refund the taxes, the states get a extra windfall in taxes.

It just another conspiracy to collect more taxes.

You can win sometimes

[fmaxwell]

I read the directions and send them in religiously. Got a card back from Belkin saying I hadn't sent in 'some required information'. Not enough info on the card to tell me what information, or what rebate, or when. So what the hell do I do? Stop buying Belkin is about all I can do.

What I did in a similar situation was phone and ask what information was missing. The person said that she could not tell me. I told her that I wanted them to return everything that I sent. She smugly informed me that the rebate says that they can keep everything I send. No, I told her, it does not. It says that they may keep it if they pay the rebate. Since they were not paying the rebate, I wanted it back. Suddenly a supervisor got on the line and said that he was approving payment. I had the check in under a week.

Staples Rebates

[shancock]

If we must have rebates, I have to admit that Staples is the way they should go. You get instant online verification of your rebate, no waiting 6 weeks to get a postcard that states you supplied incorrect information.

The rebates at Stapes are handled online very quickly and you have a tracking number to follow. Everything is upfront and out in the open.

I had one item that was disallowed this past Christmas and since it was online and there was recourse (email), the problem was cleared up within days. I had records on my computer and everything worked. Very nice.

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.

Re:Here's my beef

[ScentCone]

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.

OK, reality check here. In most cases it goes a lot more like this:

Manufacturer: "Thanks for ordering a pile of Acme Widgets, Mr. Big Box Retailer! Here's your shipment, and an invoice. You'll notice that the invoice says 'Net Due 60 Days, 2% Net 20' "

Retailer (to self): "Better pay that bill in 20 days so that we can get the extra 2% discount"

[retailers completely live or die on slim margins when the products are commodities like computer hardware, etc., so 2% is a lot over time]

Retailer (to self, 30 days later): "Gosh, I'm glad I've sold half of my Acme Widget inventory, but the rest is moving slowly, and I've got cash tied up in that pile of merchandise. Hmmm."

Retailer (to Acme Widgets territorial sales rep): "Help!"

Sales Rep: "Here's a pile of rebate coupons. Your customers will get $20 back from us if they buy something out of your stock, but they've got to do it this month."

[the sales rep knows that he'll only earn commission on another order from Big Box if he helps Big Box cycle inventory]

Retailer: "Dear customers: you can get a $20 rebate on this thing that we've already paid for, but that's between you and the manufacturer."

So, you get the idea. With some exceptions, the retailer isn't even involved, other at the marketing level. There are a million variations on this theme, and many things like this are planned in advance, rather than being treatment for slow-moving products. But a key concept is that the retailer often is dealing with the vendor at essentially normal prices and margins, and the rebate is used to move the consumer into action while the vendor (not the retailer) absorbs the profit hit. As retailers improve their IT infrastructure, you're seeing the coupons show up as direct-on-your-receipt printouts, and redemption is even flowing back through a service provided by the retailer. But it takes a big company to make all of that work smoothly, so mom-and-pop retailers usually just hand you the printed coupon from the distributer.

This can, of course, turn slightly sleazy, as cheesy retailers and their suppliers gin up the appearance of stock liquidation/incentives just so they can float on your money for a couple of months. That low-rent behavior can be avoided by not patronizing those distribution channels, and by rewarding quicker-acting rebate programs with your business.

how do you deal with the practical aspect of a system that has no ability to be corrected

The same way you'd deal with a supplier/retailer that won't address the fact that they sold you a defective product, or over charged your credit card, etc. If they have crappy customer service, make sure that you, your frieds, and all of your business contacts no longer do business with them. Places like Slashdot are fantastic forums for alerting people to unethical (or, ideally, stellar) retailers. Hence my praise of Costco, for example - their rebates are quick and easy.

Re:Rebates should be illegal

[M. Piedlourd]

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.

We have a law in Connecticut that deals with this. If a retailer advertises a price for a product, they must accept that price at the point of sale, whether or not that price includes in small print "after rebate." So if Crazy Bob's Komputer Outlet wants to sell RAM chips for "$1.99!!!*" they have to take $1.99 at the register. If they want to offer a mail-in rebate, they have to advertise the product as "$91.99 with a $90 mail-in rebate!!!!" We also have a litigious Attorney General who is pretty zealous about enforcing this law, so we find that it accomplishes its purpose.

* after rebate