Computer Rebates Not As Sinister As You Think

Lam1969 writes "Robert Mitchell dug up some details about rebates after getting up at 5 a.m. to get a free (with rebates) computer bundle at Circuit City. He had to deal with five separate mail-in rebates to get his money back, and decided to ask an expert about whether rebate come-ons are some sort of attempt to trick consumers. The reply: 'The big lie that the media and attorneys general want you to believe is that all the retailers and manufacturers are crooked and the reason [they] do rebates is breakage, which is people not turning them in.' Furthermore, Mitchell reports that retailers are making the process easier, by printing rebate forms and receipt copies at the register, and letting people track rebates online. His conclusion: The trade-off of having to do a few hours of copying and envelope-stuffing is worth the price of a new computer, so stop whining -- 'suck it up and accept your rebate check like a man.'"

Comments

Why? Tell us WHY?

[Chmarr]

If the manufacturers REALLY wanted us ALL to send in the rebate forms, and were NOT expecting this 'breakage'... then why? Tell us WHY you have this convoluted rebate system in place, rather than offering us a lower price WITHOUT the rebate system?

The ONLY reason I can think of is that they want to collect the interest on my $40 cheque between the time I've bought the product, and cashed the rebate check. Surely they could not be earning enough interest on that to warrant the expense of maintaining the rebate system.

The only OTHER reason I can think of is so the manufacturer can advertise the 'after rebate' price, but exclude bunches of people from being able to obtain that price (ie, multiple orders, businesses, etc).

Well, okay, I think I just answered my own question :)

Rebates as a way to get your personal info

[wired_parrot]

What about rebates as a way to get around privacy laws by making you fork over all your personal data in exchange for the rebate? For me, this one of the things I disliked the most about rebates - I shouldn't have to pay an extra premium on my purchases because I refuse to give out my contact information the company.

Re:Easier still?

[taustin]

Or better yet, just reduce the price at the cash register. It's called "putting the item on sale," and it works really well.

Re:Easier still?

[jsrober]

Adding a rebate is a way for manufacturers to discount goods already in the supply chain (they already sold them to distributors and retailers). It's the ONLY way that the manufacturer can VERY QUICKLY stimulate buyers to buy their products.

Differential pricing

[PsiPsiStar]

I'm surprised noone's mentioned differential pricing yet.

Companies want to make as much money as possible. (duh)

Lets say person A is willing to buy a particular hard drive for $20.
Person B is willing to spend $25.

If you set the price at $20, you don't make as much money as you could.
If you set the price at $25, you lose a customer.

Ideally, you get each person to pay the most that they're willing to pay.
Rebates help accomplish this. A person who makes a high salary will be willing to pay more for an item, and they'll value their time more. They won't send in the rebate.

A person who values their time less and makes less money will take the time to fill in the rebate.

To put it another way;

When I lived in China, you had to haggle over the price of most goods. If you sat there and haggled for half an hour, you could get the price down. A person who made more money wouldn't see the value in haggling for half an hour for a few quarters of a price reduction, and would pay a higher price just to get the sale done. Rebates accomplish the same thing, without requiring any inefficiency on the part of the seller.

I'm sure there are other reasons as well, but this would seem to be one use for a (deliberately inconvenient) rebate.