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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.'"
The guy might have had a point if he actually waited to see if the checks showed up before he came to his conclusions.
As much as I dislike some of the 'underhanded' sales tactics of Best Buy, the rebates they offer are usually well worth having to buy something there.
As long as I know exactly what I want when I walk in there I usually end up with a nice deal.
Quite a few people complain about Best Buy not honoring rebates for a myriad of reasons but again, I follow the instructions on the rebate form they give me at the time of purchase, send them in and usually have a rebate check within 3 weeks.
Ka - Ching
Do what thou wilt shall be the whole of the Law - Aleister Crowley
Actually, I'm still waiting on three of my four rebates from CompUSA on a router I purchased. The first check arrived two or three months ago (the rebates went into the mail four months ago). I'm not saying that I won't get them, but let's just say I'm entertaining that possibility. Worse, I can't return the router without the reciept. Since the router was giving me no end to the troubles, that was also rather vexing.
When you get right down to it, FOUR rebates to mail in is ridiculous. The all went to the same building, as I recall, just to different PO boxes. There's no reason for that as far as I can see. Even if there is, I propose that the retailers ought to tell you when you'll be having to send in more than one rebate form (and how many, in that case).
You forgot two other reasons: One: So called Earnings. They can claim, as a company, to have sold x dollars of merchandise, which is the price of the goods going out the door. They look better on paper even though they have the oncoming cost of rebates. Two: balancing out the 30 day return. The rebates are often only sent out under the condition that there is no way to return the item under any sort of no-risk clause. Either they make you mutilate the box and forfeit the reciept, or they hold the rebate until after the return period has expired. This means they only give the discount to good customers who don't cost them by returning their junk.
:-)
Just off the top of my head
Having worked in retail for 20+ years, most of it at fairly high levels, I can tell you why manufacturers do rebates: retailers demand them.
"We're WallyWorld, and we control 99.867% of the retail market for your product. If you don't offer a rebate, we won't advertise your product, we'll advertise your competitor's product. In fact, we won't even carry your product."
Retailers want rebates because it lets them hold (and advertise the hell out of) a sale without actually having to put anything on sale. The retailer benefits from increased revenue from more selling product at full price to the marks, er, consumers, who think they're getting a deal.
The failure rate for rebates - the percentage never actually paid, even though they're sent in, is also quite high, because manufacturers don't like rebates much at all.
Naturally, I wasn't going to slack when it came to filling out a $200 rebate. Within a couple days of getting the phone I took an hour off to fill out the rebate form. Only one problem. The box they sent me didn't have the required UPC code. But whatever, I'm sure I could call them to straighten that out.
So I filled out the rest of the sheet and had almost everything together, and then I noticed: You had to wait six months before sending in your rebate. And at the six month period, you had to include your most recent cellphone bill.
What absolute stupidity. I mean, why couldn't they accept the rebate right away and say that you won't get paid for six months, when they do a check to make sure your cellphone account is in good standing? And it gets better. At the end of that six month period, you only have a thirty day window to get your rebate in!
How many consumers are this organized to send in a rebate not earlier than six months after purchase, and not later than seven months? Well, lucky for me, I am. I've made a note on iCal. I've also made a mental note: never purchase anything from Buy.com again.
I'm generally "Interesting," "Insightful," and even "Funny" here. What the hell happens to me at parties?
As any first-year MBA knows (and has been mentioned on in a few previous posts here on Slashdot) there are basically three reasons why rebates exist:
1) Breakage. But this reason has been in steady decline and is increasingly unjustifiable. While it used to be that only 40% of rebates were turned in, that number has been steadily climbing for the past ten years -- yet rebates are more popular than ever. Furthermore, quite a few retailers have streamlined the rebate process with the explicit goal of making rebates easier to file. Also -- and this is particularly interesting -- recent studies by marketing academics have shown that there is a practical ceiling on the percentage of sales that can be counted in rebate breakage. Specifically, rebate rules (tear out the UPC) basically prevent people who are buying gifts from filing rebates. It is estimated that 20-30% of all retail sales are gift items; so if only 40% of rebates are turned in (the number nowadays is closer to 60%), that's more than half of the people who could file rebates.
2) Accounting. This has been mentioned on Slashdot before, and it's now probably the #1 reason why retailers -- particularly during the holidays -- have rebates. A regular sale eats into margin AND sales. A rebate "sale" only eats into sales. CEOs look better on paper when all of their "sales" are rebate and not direct-price based. This is actually discussed in some accounting textbooks!
3) Marketing/positioning. For example: Circuit City buys a bunch of Western Digital hard drives. They don't sell well; in fact, they just sit in inventory. WD is concerned that CC won't buy from WD anymore, because their product isn't selling (probably because it is more expensive). So WD issues the rebate (or has CC issue the rebate). In effect, its letting CC put existing inventory "on sale" at no cost to CC -- and CC now has an incentive to put the rebate in its weekly flyer, etc. This reason is why so many rebates are store and not product-specific -- even if they are manufacturers rebates.
Anyway, like I said -- the poster doesn't know what he's talking about. When rebates were first concieved in the 80s, his analysis would be correct. But it isn't, not anymore.
-Shylock
Statistically speaking, there's a 99.998% chance that my IQ is higher than yours. Get over it.
Agreed. The posted price is the price. If you purchase going in with the assumption the price (without rebate) is the actual price, then when you successfully get a rebate, it becomes an unexpected windfall. I am still awaiting one rebate (Fry's purchase) from 2 years ago, and another I gave up on. ALWAYS assume it is a scam you won't ever win. Then, in the rare case when you do get the "This is a warrant not a check", take the money like what it is: a miracle (or will be in 10 business days when it clears).
- Minutus cantorum, minutus balorum, minutus carborata descendum pantorum.
I call shenanigans.
Time was, a manufacturer could put a sale discount on a product, and retailers would get a refund (or future discount) on items sold during the sale period. The retailer was in the position of claiming the refunds, sort of like the AMD vs Intel lawsuit thing going on, but usually without the pressure of screwing over competitors.
I don't know if rebates come out of pressure from the stores, whom obviously would benefit from getting out of this task while still being able to advertise a "sale" price. Or perhaps strategy from the manufacturers, where many claims are not filed, and many others can be denied/delayed/ignored. Perhaps collusion of the two. But it puts the effort of claiming the refunds on the shoulders of the consumer -- with as I mentioned lots of tricks to deny or ignore claims. It is certainly not the only way to put existing items on discount, just "better" for both the vendor and the maker.
{ - Generic Guy - }