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

Rebates Suck

[Anonymous Coward]

• If you purchase in an area with sales tax, you must pay tax on the pre-rebate price.
• My experiences with rebates have been, shall we say, less than encouraging. I'm still waiting for the rebate from Best Buy for the WRT54G I bought about one year ago. Of course, since I had to send in original UPC codes etc, there's no way to restart the process.

Re:Rebates Suck

[cflorio]

Funny you mention that. I also bought a Linksys WRT54G (aka Cisco) with probably the same rebate you had. I waited months and finally got a response back - rebate denied. Apparently the form was not the correct form (I found this out by calling linksys when I got this). What the response actually said was no UPC code included. So, after waiting months, then having to make a phone call and waiting on the phone for a good 20 min plus being transfered 2-3 times, I finally got the rebate check about 3 weeks later. What this tells me is that most folks will not go to the trouble of calling, and that means Cisco wins.

Re:Rebates Suck

[pilgrim23]

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).

Re:Rebates Suck

[HD Webdev]

Of course, since I had to send in original UPC codes etc, there's no way to restart the process.

That UPC "send it in" stuff really sucks. I've purchased a bunch of those routers and in the documentation it says that I must have the original UPC for the warrantee to be valid, but on the other hand, I need to give it away (and the warrantee) to get the Best Buy rebate.

It's completely unfair. My Best Buy receipt should be enough for a warrantee. After all, it's not like they can't look up in their database and notice that if I've tried to submit the same receipt for multiple routers.

I don't often purchase those routers from Best Buy. But, sometimes the situation arises where I can't avoid it without delay. And, in those cases, I'm worried about eating the cost of a router because I wanted to get the $10 rebate, so I don't send it in.

Easier still?

[jarich]

Furthermore, Mitchell reports that retailers are making the process easier, by printing rebate forms and receipt copies at the register,

Why don't they take it one step further and file it for us as well? Then we can just take the rebate off at the register? I don't mind paying sales tax on the full price.

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?

[beakerMeep]

Exactly. This guy is a coupon cutting ninny trying to explain away something he knows to be wrong.

Companies are in business to make money and are doing this to *drumroll* make money. There are two ways this can make them money:

1) "Breakage" as they call it. People dont send in the rebates. But this often goes further than comsumer's mistakes. Sometimes companies take way longer than they should in sending back your rebate or will send you a letter claiming that your paperwork is incorrect and that you must resubmit that receipt from that product you bought 3 months ago. And we'll get you that $50 rebate in just a couple more months.

2) they can upsell you while you are in the store or upsell you through advertising (if your are looking at that super cheap computer maybe you will look at the product on the next page)

In his indignance he is saying we should be ok with a very anoying practice that distorts advertised prices and, by it's nature, has at least SOME occurance of fraud -- what level, i don't claim to know.

he can go jump in a lake as far as im concerned :)

Re:Easier still?

[fish waffle]

There are two ways this can make them money:

You missed one:

3) it's effectively a forced registration. Customer lists are an important asset for both internal uses and for sale to other companies.

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.

Re:Easier still?

[beakerMeep]

Ah yes that's very true. And with those lists they can claim a prior business relationship with you getting around most spam and marketing laws (such as the do not call list).

Re:Easier still?

[LostCluster]

The reason is simple. It's hard to enforce sales to a "one-to-a-customer-period" rule. Especially at a chain store, where a customer who doesn't have to present ID can simply drive to another store and get the special over again. One rebate to a mailing address limits the discount to one per household, and gets rid of most repeat claimers.

Re:Easier still?

[bleckywelcky]

That's all fine and dandy for the manufacturer, but why in the hell does the retail store do rebates then? I used to do rebates all the time, and on a lot of the better deals you would have 1 rebate from the manufacturer and 2 or 3 rebates from the actual store itself. Why? (Other than counting on customers to not turn them in.) The supply chain argument doesn't work here because the store can just mark the price down themselves. About the only reason I can see is so the corporation can play games with its stores by offering rebates so that corporate pays out the discount, but the store still gets to count the full sale.

Re:Easier still?

[Generic Guy]

Adding a rebate is a way for manufacturers to discount goods already in the supply chain

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.

Re:Easier still?

[dgatwood]

Put another way (and this is how they are generally used), a rebate is a mechanism for a manufacturer to quickly clear out old stock in the supply chain prior to the introduction of a new model. These have a tendency to fall nearly prior to product release cycles for many companies. If you don't mind buying a product that you know is about to be replaced by a newer model, it gives you a way to get a product at a cheaper price than you otherwise would.

It is also often used as a way to avoid lowering a price on an item that is currently being sold at above market rates, allowing the business to pretend that they weren't screwing the customer originally. Perfect example would be hard drives at Fry's. As a general rule, if there's no rebate, you're paying way too much. This allows them to raise the price back up to the pre-sale value without the public perception that they are raising the price. They aren't; they're ending a rebate. It's just one of the dirty little tricks that many retailers do when they aren't able to move products due to overpricing.

Re:Easier still?

[buck_wild]

Aside from trying to cheat the customer (who may forget to send the rebate in, or simply not fill it out correctly) there is still no reason to not have the STORE file the rebate and collect the money back. Wouldn't reputable stores WANT to do that, in order to garner customer good will?

When sales are back up to par, and the items are considered 'moved' then end 'sale' on the item, returning it to full price.

I guess I just don't see how the store would lose by filing the rebate itself and giving the customer the discount at the register.

Re:Easier still?

[buck_wild]

Awesome. Now it's time to get out there and educate the masses.

Is there money in being an 'address broker' for rebates? That'd be classic...

If they really wanted to make it easy...

[Anonymous Coward]

If they really wanted to make it easier for consumers, why wouldn't they just discount the price by that much to begin with?

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 :)

Re:Why? Tell us WHY?

[jeffmeden]

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 :-)

Re:Why? Tell us WHY?

[taustin]

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.

Re:Why? Tell us WHY?

[iabervon]

Wouldn't stores do better to get the manufacturer to give them the rebate instead of offering it to the customer, and then having a sale? It seems like it would reduce the dollar loss to shrinkage and unsold stock if they saved the rebate amount on these items. (Of course, the manufacturer loses out in these cases, but that's not a reason for retailers to prefer rebates.) I believe that it improves retailers' gross income, but that doesn't seem like something worth improving at the expense of the bottom line.

I'm a rebate whore

[phaetonic]

Check out http://www.rebate-tracker.com/ if you want to have a central point of management for all your rebates.

Valid rebates

[BushCheney08]

Something the article seems to miss is that many rebate processing houses like to invalidate rebates for no reason whatsoever. They often claim that you didn't include all of the materials, or that they weren't mailed in time. I've had this happen to me several times. Thankfully I've kept copies of everything, which I was able to fax to them to "prove" that I did send everything that was required. If rebate houses behaved a little more honestly, they wouldn't have such a bad reputation.

Who is this, Joe Isuzu?

[Anonymous Coward]

He's lying.

Putting aside the obvious question (who the fuck is The NPD Group? Why, a marketing consultancy!), the guy who talked to the ComputerWorld reporter is full of shit at best ad bald-faced lying at worst.

I should know - I used to manage a service with rebates. (Hence the anon post.) The rebates were only cost effective because of breakage. In fact, we once had to reduce the rebate amount for a particular group of users who had too good a take rate (business users who would send in rebates en masse, for an IT product.) The only way we could tell customers they saved $XXX was because we knew some of them wouldn't turn it in.

If this so-called reporter had asked even one or two sources inside a company that uses rebates, instead of talking to a consultant who probably recommends them for a hefty fee, he would have figured this out.

Re:Who is this, Joe Isuzu?

[shylock0]

Well... you're just plain wrong.

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

Re:Who is this, Joe Isuzu?

[timeOday]

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

Says who? Do you have a link? The rebate fulfillment rate is the one hard piece of information this article could have provided that would have been really interesting to me, and speaks volumes more than some ad-guy spin. But no, he couldn't or didn't report it.

Re:Who is this, Joe Isuzu?

[geekoid]

actual, 60% of rebates are claimed. Higher at staples where they have made it easier to do so. No great surprise.

http://yahoo.businessweek.com/bwdaily/dnflash/nov2 005/nf20051123_4158_db016.htm

quote:
" Why the rage for rebates? The industry's open secret is that fully 40% of all rebates never get redeemed because consumers fail to apply for them or their applications are rejected, estimates Peter S. Kastner, a director of consulting firm Vericours. That translates into more than $2 billion of extra revenue for retailers and their suppliers each year. What rebates do is get consumers to focus on the discounted price of a product, then buy it at full price. "

Re:Who is this, Joe Isuzu?

[Anonymous Coward]

"Says who? Do you have a link?"

That sort of stuff is typically company confidential. You won't find companies going on record with these numbers. That's why I'm posting anonymously to inform you that in the computer peripheral industry here in the US (mice, speakers, webcams, etc.) the breakage averages 50%. It varies widely on the amount of the sale and the amount of the rebate, but breakage is a bell curve, with the swell between 40% and 60%.

The NPD guy's statement was either grossly mischaracterized, or he's full of crap.

don't count your chickens before they hatch

[mapmaker]

The guy might have had a point if he actually waited to see if the checks showed up before he came to his conclusions.

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.

from my experience...

[AxemRed]

I have talked to some people who claimed that they never received rebates. But as for me, I have turned in about 50 mail-in rebates over my lifetime, and I have received all of them. Sometimes they really do take the full 8 weeks stated in the fine print, but I have always gotten them eventually.

Rebates ARE worth every penny!

[cob666]

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

Re:Duh

[CheshireCatCO]

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).

The Lie...

[Chris Bradshaw]

I made the mistake of being sucked in to the big rebate lie on more than one occasion. Twice I was duped by tigerdirect (http://www./ tigerdirect.com) into buying an item that was advertised at an unbelievable price, and then in small print at bottom "after $x rebate". To this day I still haven't recieved my $40.

You know what they say, "Fool me once, shame on you - Fool me twice, shame on me"...

I hate rebates

[Omnifarious]

If you want to give me a lower price, give me a lower price. It should be illegal to advertise the price after rebate more prominently than the price before. I've sent those in once or twice, and each time I do it, I get a complaint that I've made some minor error and I get no rebate check. Largely, I just don't send them in.

I've walked out of a few stores after learning that the advertised price is a rebate price and gone somewhere else and paid more than the before-rebate price simply because that store was at least honest.

Re:I hate rebates

[pappy97]

"If you want to give me a lower price, give me a lower price."

Exactly. Is it SO revolutionary of a concept TO JUST GIVE US THE LOWER PRICE???

Rebates only exist as a way to jack up the price and make money off the 70% of people who won't correctly send in the rebate.

For example, let's say an item should cost $49.99.

Best Buy will come up with a brilliant idea. Sell it for $69.99, but offer a rebate that supposedly makes the effective price of the item say $19.99.

BB advertises the price to be $19.99, but with tiny lettering about rebates. Now idiot consumer goes into the store, lured in by the ad, buys the item for $69.99, and forgets to mail in the rebate.

What's the problem here? THE ORIGINAL PRICE OF THE ITEM WAS $49.99. Best Buy not only got people to come in and make purchases with the alluring ad, they were able to use the rebate system as a way to JACK UP the original price of the item.

It's scam written all over it.

If you want to people to come in and ACTUALLY take a loss on a item, then just slash the price for that item to get people in the store. Some of these places do it on Black Friday, but why not for other days?

In Wal*Mart's with a grocery department, Wal*Mart takes a loss on its entire grocery dept (yes, the ENTIRE dept operates at a loss) to get people in the store to buy the stuff they have 300% mark-ups (From their paid price) on. Best Buy can do the same thing, without trying to be greedy in a SCAM sort of way.

Re:I hate rebates

[amitola]

It should be illegal to advertise the price after rebate more prominently than the price before.

That appears to be exactly the case in Connecticut. I lived there until I left for college in California, and still go there every year for Christmas, and last time I was there I noticed that every advertisement listed the in-store price, and the after-rebate price was in the small print with the description of the rebate itself. It's the same corporations--Staples, Best Buy, etc.--so I assume they weren't doing this out of the goodness of their hearts, or because the citizens are unusually clever (although it is a tradition, see nutmeg state).

So yes, I couldn't agree more, the STORE's advertisements should be required to display the price that you will pay IN THE STORE, and the rebate should be advertised as an extra discount available to some people under some circumstances requiring persistence and luck, which is what it is.

Re:I hate rebates

[Tired_Blood]

Seeing as how your comment is moderated +5 insightful... I'll bite.

First you say, "just give us the lower price". Then you say BestBuy should follow WalMart's example of selling other items at 300% markup. In either case, one sale is subsidizing another sale and, in your example, BestBuy subsidizes the rebate with the same item being marked up.

All of this is a no brainer: just don't buy any random thing and understand that entering a store doesn't require purchasing a product. We're not talking about essentials (food, shelter) when discussing these rebates - if a store wants to sell Bic pens for $100 each, and offer $99.99 rebates: what's to stop them? Caveat emptor, and all that.

Your scam concept falls apart when you account for more than one store available to consumers. If the item really costs the retailer only $49.99, it would be easy to find some other store that sells it for only slightly more than cost. Such competition does still exist.

As for the case that people don't bother submitting rebate forms, how is that the store's fault?

Re:Duh

[Billly Gates]

I used to work at staples and we purposely put products out with expired rebates or a rebate that expired in mere days before consumers could file them in.

Also I bought a video card that was defective at compusa and it was teh last one in stock. The same exact card was available at circuit city for $60 more. Even with the rebates teh price would only equal the exact one at compusa.

So in other words you are getting no value at all depending on the product with the rebates. This is also assuming that the rebates are not expired. So yes whinning should be appropriate and I believe Circuit City does this to make consumers think they are getting a better deal when they see "BIG SAVINGS" on the price tags of the shelves.

This made me a customer who no longer shops at circuit city as a result. I supposed I could shop at ..gulp.. worst buy even though they treat their employees like dirt and seem to be the walmart of the tech industry.

Re:Duh

[Austerity Empowers]

You don't always get your check, sometimes they get held up due to "delays" or "problems with submission". It's a low percentage but high enough that I don't believe it's totally accidental. i.e. No one is telling employees "lose receipts", but they may arrange processes where it's easy to do so.

You have to go out of your way to track your receipts and follow up on them after the timeout period (usually 2 months later). You'll get your money, but I'd still refuse to buy based on rebate prices. I buy based on whoever has the best price without the rebate and don't go to Best Buy/Circuit City that seem to have bad prices unless you fill in all the rebates.

Is this just a US phenomenon?

[tosspot1]

Are there other countries doing this? I must admit I haven't been everywhere, but I've been to a quite a few countries, and usually when something is advertised at a price, that's the price it is. You don't have to "earn" your discount by performing some sort of (irritating) action after the purchase.

So is this done anywhere outside of the US? If I suggested this idea to my friends and neighbours they'd probably look at my like I was crazy.

I mean, let's think about the process. The consumer fills in a form, and mails it to the company. The company then has to fill in another form (known as a cheque, or since it is the US I suppose we'd better call it a check), and post it back to the consumer. The consumer then takes the check and posts it to their bank. Their bank then processes, creates additional paperwork and posts it to the company's bank to verify the signature. Presumably at that point the money transfer is done electronically.

Is there something wrong with this? Are not a lot of resources being consumed unnecessarily? Why do they persist with this stupidity? Why don't governments simply pass laws to encourage retailers and manufacturers to deal in a more straightforward way with consumers?

Or am I missing something here?

Re:Is this just a US phenomenon?

[drazaelb]

Are there other countries doing this?

Canada does, but they're close enough to the US that the distinction isn't important.

Why don't governments simply pass laws to encourage retailers and manufacturers to deal in a more straightforward way with consumers?

Because that's not how the free market economy works. Don't like rebates? Then don't buy products with rebates. If nobody goes along with it, they'll quit doing it on their own.

Re:Is this just a US phenomenon?

[aniefer]

Here in Canada, I've never had a problem getting my money from a rebate. (hard drives, video cards, mp3 players) In fact, often its an american product and the rebate cheque comes in US dollars. bonus!

Re:Is this just a US phenomenon?

[marcosdumay]

I was wondering why I never saw something like that here at Brazil (and how do you manage to be robbed like that). Well, here it is illegal to anounce a lower price than the selling one (even if you plan to make a rebate).

If a consumer comes to a shop that announced something by R$19.99 with the note "R$119.99 with a R$100 rebate" on small letters, he can pay only the R$19.99 for the item.

Brasilian consumer protection law was based on some european countries, so expect the same from there.

Re:Is this just a US phenomenon?

[Scarblac]

Why don't governments simply pass laws to encourage retailers and manufacturers to deal in a more straightforward way with consumers?

Because that's not how the free market economy works.

Actually, that is how a free market works - buyer and seller know the product and the price, money changes hands, buyer owns the product. Among the reasons it works well is that the buyer has full information and can make a well informed choice. This is a case of the retailer trying to make the market less free by making it less transparent (buyer isn't 100% sure which store is more reliable giving rebates) and introducing friction (buyer isn't sure if all the work is going to be worth it), in the hopes of getting an advantage.

If government is supposed to protect freedom of markets, they should make rules against this practice - like making it illegal to make a price after rebate look like the normal store price in ads.

The Joy of Buy.com Wireless Rebates

[Schlemphfer]

Sure, there are companies like Staples that have put effort into making sure their customers don't have to jump through needless hoops to get their rebates. But let's now talk about companies that INVENT needless hoops in the hopes of keeping your money. Oh, what a perfect time to share my little rebate story with you all. About four months back, I saw you could get one of those sweet little Motorola Razr cellphones for free from Buy.com, upon signing up with Cingular for two years. You would get a $200 rebate that covered the cost of the phone. I needed new cellphone service, so I went ahead and ordered the phone from Buy.com.

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.

Re:The Joy of Buy.com Wireless Rebates

[LVSlushdat]

Talk about a bizarre 'rebate'.. When my wife and I went shopping for a new car, we wanted a Hyundai Santa Fe.. So since we have three Hyundai dealers in town, we cruised them all and came up with very similar prices, with one exception.. One dealer was offering free gasoline for a year.. hmmm. To make a long story short, we bought our Santa Fe from this dealer.. I must have been wearing my 'stupid' hat that day, because I went for this deal before reading the 'fine-print' on the free gas.. Some of the highlights: They give you a coupon book, you have to hand-carry (no mail) the dated-with-seven days-receipt to the dealer with the coupon for that month, you get no more than 17 gals on one receipt per month.. If you miss it for that month, you miss-that-month.. In short, its a ROYAL PAIN IN THE BUTT.. --But I'm getting some satisfaction.. When I do the fillup for a receipt, I go to one of our few full-serve stations, get the full-serve, put in premium (at nearly $4/gallon).. snicker..snicker..snicker...

Re:The Joy of Buy.com Wireless Rebates

[Tim2005]

I'm going through the exact same thing as you. I will never, ever buy anything fron Buy.com again.

Just so more people are aware, Buy.com has subbed out their cellular sales to a thouroughly evil little company called Inphonic. Inphonic is also known as Wirefly. This is not clear at all when initially purchasing the phone that you are dealing with a company other than Buy.com.

The rebate is a scam. In fact, Inphonics business model is to offer extremely generous rebates and not honor then. Check out yahoo shopping, resellerratings, or Bizrate for Wirefly or Inphonic. I have never seen a company have such irate customers. The OP's description of the horrendous rebate process is correct except he is leaving out the bit about where they refuse the rebate even though everything is correct. The stories are rampant about customers who correctly waited until the 30 day window to send in the rebate and still get a rejection letter stating that the rebate was not sent in at the appropriate time. Since they require the original UPC code, get ready to spend several hours on the phone if you want to get a (small) chance to clear things up.

They are absolute bastards. The original story is a crock.

Beware consumers!!

Wow

[bill_kress]

It's not like the "media and attorneys general" told me to think any way. I learned exactly how rebates work first hand:

1) You send it in
2) They don't reply
3) You call
4) They fix it and send you the rebate.

They make step 3 so simple you don't even notice that you are doing it, and there is always some reasonable excuse (they don't have enough info, or "But we were gunna send it, give us time!"), but if you don't call you get:

1) You send it in
2) They don't reply
5) Profit!

Now, to hear that the media and attorneys general have come to the same conclusion??? Only evidence that this is not some atypical experience but real.

Thanks for confirming my suspicions.

Bloody corporations

The Office Supply Depot...

[Lord Pillage]

I work at a major office supply retailer as an electronics department associate. Every week we get new rebates on computers and have bundles (PC, monitor and printer) advertised in the flyer. Much of the time, the instant rebates are very significant, saving the buyer upwards of $300, basically paying for the monitor that's included with it (I believe the store is actually the ones providing the rebate in this case). That's not even counting the mail-in rebates.

I know that we've also been moving toward an online system where rebates can be redeemed directly from our website, so that the customer doesn't even need to send anything in (took long enough though). From what I can tell, it is a pain sending them in but you almost ALWAYS get your check back in the mail. People love telling people about how they got jipped because they charged them money that they promised back and it never got returned to them. This is why you always here these stories about rebates never coming back. However, people don't usually say, "Hey I got my rebate check, it was really fast and everything."

From my experience rebates are made for the customers, and the sellers. It gets people into the store, they save money they'd normally have to spend, and usually the store picks up the lost money on items added on (ie. Extended Warranty, mice, keyboards, cables, mouse pads, webcams, the list goes on and on). But this move to an online system makes me think that the mail-in will soon be on the way out.

$0.02

Re:The Office Supply Depot...

[AeroIllini]

From my experience rebates are made for the customers, and the sellers. It gets people into the store, they save money they'd normally have to spend, and usually the store picks up the lost money on items added on (ie. Extended Warranty, mice, keyboards, cables, mouse pads, webcams, the list goes on and on).

The system you are talking about, where people are attracted to a sale because the price is low, and then the store makes it tempting to add on extras with a higher profit margin, can be done with old-fashioned, honest-to-goodness low prices. Rebates need not be involved. And if that were truly the only reason the rebates were there (to offer lower prices) then the stores would be losing lots of money on the people they pay to process rebates and mail checks.

No, my friend, rebates are just a way of "cooking the books." A store is obviously not going to offer a product for a loss*, so they price the product right where they want it, then mark it up an extra $X and offer an $(X-Y) rebate, where Y is the cost of processing the rebate. That way, if every single person mails in and receives their rebate check, the company breaks exactly even. However, even if a SINGLE customer out of millions doesn't send in the form, or is disqualified for not following instructions, then the company just made some money for essentially doing nothing. And even if only 1% of the customers don't mail it in, the company is rolling in it. The same thing is true of gift cards, for mostly the same reasons: they are pure profit.

What disturbs me is not that I am very slightly inconvenienced by the rebate form, it's that the companies would have the gall to do this sort of thing in the first place. I would like to know what happened to plain old customer service. How about offering a quality product at a reasonable price with knowledgeable staff and no strings attached? Is this something that major retailers cannot grasp? Is the drive for another 0.00001% profit margin so strong that you are willing to alienate, frustrate, and anger your customer base? This, simply put, is not good business, yet it's rampant. And just because some group who works in the interest of the large retailers comes forward and gives the rebate situation a positive spin does not justify the practice.

By the way, I also get as upset at grocery store SuperSaver cards. If they don't know who you are, you pay more, and that's unfair. Make the benefits of club membership something OTHER than the prices in the store. Give out frequent flyer miles or free teddy bears or something. Don't punish those of us who wish not to be spammed.

OK, rant over. We now return to your regularly scheduled lives.

*Certain extenuating circumstances do exist where a company will offer a product at a loss, such as inventory reduction, going-out-of-business, or lock-in, where other business units make up the cost (like the X-Box, or cell phones with plans). However, these are *exceedingly* rare in the major national retailers, and usually only happen in furniture stores.

Re:Duh

[bizard]

Yes. I have had rebates not honored. The best was a $50 rebate for FileMaker Pro which arrived as a check with a 2 week expiration. It arrived with one week left and by the time it got deposited at my bank (I had to mail it in to an online bank) it had expired. This also cost me processing fees.

Repeated attempts to get it sorted out simply resulted in FileMaker claiming that I couldn't get the rebate twice and then that they had no record of me applying for one. Finally they just told me the rebate had expired. Net result, -$15 in rebate (bank fees).

Boo Rebates!

[ImaNihilist]

I HATE rebates with a passion. The principles behind them piss me off.

1) You have to pay out more upfront, and pay tax on that amount. You don't get back that tax.
2) You might make an error on the form, and not get your money back at all.
3) Since sometimes it takes up to 90 days to get your money back, that's 3 months that you could have been earning intrest on that money.
4) The time spent trying to get your money is annoying.
5) The forms are often SO TINY it's hard to write legibly on them.

Think of all the money those companies get to keep in intrest alone that they make on the rebate money. ARG!

I'd much rather pay a little extra, and not have to deal with rebates. Stupid pricing games.

This is how they make their money

[slashfun]

1) Breakage. Folks forget to mail it in. They win.
2) Bendage. Folks mail it in, then forgot that they mailed it in. Slight problem and, ...they win.
3) Bondage. You didn't follow fine print item #12. Rebate rejected. They win.
4) Recharacterization. You comply, get rebate. They keep extra markup from sales tax they don't have to report. They win.

Rebate Ripoffs at Fry's

[tburt11]

I buy alot of rebate items at Frys Electronics and I have found over the years that...

1) The cashier will give you the wrong rebate form. This was notorious when they had 8 rebates for Seagate drives. The cashier would grab the first one they found. Result. Rebate refused. Note: Fry's now prints the rebates with your receipt, so this happens less.

2) The rebate will require that you include some part of the package that doesn't exist. This is true with memory modules. Read the fine print, and it says to clip the logo and the UPC. Trouble is they gave you a package without the logo or missing the UPC (memory comes from the cage, and may not have a UPC).

3) They refuse your rebate, saying it was late. Now I got copies of everything, including the envelope. How can I prove when I mailed it? Stand in line at the PO and send it registered mail? WTF?

4) The form says to include the original receipt. The cashier says it is OK to send the Rebate Receipt. Wrong.. Rebate receipt is not acceptable, must include the original! Refused.

All of the above have happened, more than once. Worst are the memory rebates. They lie like dogs. They trick you. Anything but play fair.

I agree. I avoid the rebates whenever I can.

marketing information.

[Truekaiser]

They do the rebates because your personal information such as address, telephone number, etc is worth more then any rebate they can give you. remember boys and girls that business will not do something out of the goodness of their hearts if there is no profit for them. even when they play nice and give aid and relief for natural disasters or something else they do it because it's great 'advertising' and nothing more.

Re:Duh

[BigZaphod]

Best Buy is far worse than Walmart. FAR worse... *shudder*

Just a hunch but...

[Ari1413]

...Perhaps a company who tells viewers on their front page that they "provide the answers to help you understand your customers and your market" might not be completely impartial with respect to the best interests of those same customers.

Indeed, delving a little deeper into the NPD group website, we see that they claim to "provide global consumer and retail information that helps manufacturers and retailers make more informed, fact-based decisions in order to optimize their businesses." One of the ways they do this is by "Optimizing promotional support." Not to imply that this makes them evil or unethical, but it DOES imply that anything they say isn't exactly coming from consumer advocates.

Interestingly, a google search of their website reveals this site: http://www.npd.com/dynamic/releases/press_041227.h tml "USE THEM OR LOSE THEM: REBATES KEY TO DRIVING TECH SALES"
While they're not exactly sitting around cackling over the fact that not everyone redeems rebates, they do mention this gem:
"While rebates are very popular, the NPD study indicates the redemption process is still a source of frustration for many consumers. The most commonly cited reason for dissatisfaction with rebate programs was "prefer instant cash" (35 percent). Another 25 percent said rebates are "too much work for the money" and 17 percent said they forgot to mail in or go online to redeem their rebates before the expiration deadlines. Additionally, 15 percent said it was difficult to know what to do to redeem rebates and 13 percent said they didn't have enough time to complete and submit the forms necessary to redeem their rebates."

Depending on whether these are all answers to a single question or not, their research indicates 17-30 percent of rebates aren't redeemed. This isn't exactly lost on manufacturers offering them, I assume.

From the article re: prepaid gift cards

[pappy97]

"I had read that retailers like to sell prepaid gift cards, and that they're highly profitable because consumers lose them or let them expire."

Even in California, where it is illegal for a gift card/certificate to expire, these cards are good money makers and in some way take advantage of the customers.

Jack In The Box sees so much revenue potential in the card that they are giving customers 2 free tacos for getting a gift card with $10 or more.

Mickey D's is giving free $1 gift cards with certain purchases, to show off their new gift card system.

Although gift cards are not as bad as rebates, retailers honestly don't have them for our benefit. They have them because market research shows some certain amount of money is never used, meaning easy profit for the store.

Even if more gift cards were redeemed, if you've ever had a business class, you know everything revolves around cash flow, and gift cards are the epitome of cash flow.

Re:Tax deductibility is better though

[Anonymous Coward]

ts not a big enough moneymaker given all the hassles of rebates that I'll buy stuff I don't need to do this, but it makes the time spent seem less wasted if I know I'm screwing the government just a little bit!!!

You're not screwing the government, you're screwing the millions of people that depend on government money to survive. Stop scamming the government, millions of people on welfare depend on taxpayers.

more FUD

[ameyer17]

The interviewer from TFA interviewed someone from "The NPD Group" which (from http://www.npd.com/about.profile.html ) "provides global consumer and retail information that helps manufacturers and retailers make more informed, fact-based decisions in order to optimize their businesses". Maybe it's me, but that sounds like a retail industry mouthpiece to me.

Re:Rebates are a tool for manufacturers.

[roguewraith]

2. It is very hard for manufacturers to later bring the price back up. The expectation from retailers (and end-consumers) is that the sale price is the "proper" price. Whereas a rebate is not as strongly associated with permanent price changes.
Then why don't electronics manufactures do stuff like food manufacturers and give out coupons. They work exactly like rebates except they don't get the opurtunity to screw you over.

BS or as the french say leBullshit

[bogie]

"The big lie that the media and attorneys"

You just know he wanted to say

"The big lie that the LIBERAL media and TRIAL attorneys..." I'm a

Rebates are the tool of the devil. The put them out full well knowing that something like only 40% of rebates are returned. If they actully gave a shit about their customers they would give the break at the register and not put us through this dance.

Oh and interesting how one of the two times I've done rebates in that past Bestbuy screwed me saying I hadn't included something. I can't tell you how many times I've heard of people having the same thing happen to them. I avoid them at all costs.

IMHO they should be 100% illegal. Give us the price at the register or don't advertise it. Or how about this? Say its $100 with a $50 rebate. I'll pay $25 and promise to send you that extra $25 within 4 to 8 weeks.

Re:BS or as the french say leBullshit

[pla]

IMHO they should be 100% illegal.

AFAIK, In most countries, they do count as illegal. This topic, without mentioning it, pretty much only applies to the US.


The put them out full well knowing that something like only 40% of rebates are returned.

You forgot to mention the 90% of those rebates that customers do file for, which the company conveniently ignores (aka "rejects without notification"). Okay, I made that number up, but back when I still naively believed "Oh golly gee, lookit that, I can get this $200 hard drive for a penny after the rebate!", I batted a perfect zero on at least half a dozen tries.

As with class action suits I find myself having "won", I've learned not to even bother. I now completely disregard the rebate price when making purchases. I assume it costs full retail, and unless that still beats all competitors of comparable quality, I move on to the next item in the "sort[ed] by price" list.

Re:Where does that tax go?

[magarity]

do they cunningly assume you'll file the rebate and refrain from paying that portion of the tax
 
Impressively cynical, although devoid of understanding of the use tax. Read the fine print on any coupon; "purchaser is responsible for all taxes". If groceries are taxed in your area, check the next time you buy a box of pop tarts with a coupon from the sunday paper. You pay tax on the original amount, not the coupon discounted amount, and yes the store has to pass it on. Same goes for rebates even if it's you who has to send in the coupon to the manufacturer and not the store Think of rebates as just coupons that the consumer, instead of the vendor, remits to the manufacturer.

Rebates...best and worst case

[Hamster Lover]

I once bought a Fuji Finepix camera with a $100 rebate, which is excellent when the selling price was $400. I followed all the directions and received the rebate cheque in five days! I couldn't believe it. I bought a second camera with the rebate for my mother at Christmas and received the rebate cheque seven days later, and that was during the Christmas season. Needless to say I was pleasantly surprised.

On the flip side, against my better judgement my brother bought a stack of CD-Rs on a Boxing Day sale with a $20 rebate (or around there). Months later he still did not receive his rebate so he called and called and went to store and called again. After a months of this and several "told you it would happen" from me I joking mentioned he should take the company to small claims court. Long story short he filed a claim, paid the $100 filing fee and had the company (which luckily was based in the province we lived in otherwise he would not have been able to file a claim to begin with) served with the statement of claim (or whatever they call it in small claims terms). He received a call a few days later from the company which was all apologetic and a cheque for the rebate and the $100 filing fee. All this for $20, but I guess he made his point.

So it can go both ways.

I call shenanigans!

[binarybum]

this article is in fact sinister in and of itself. For those who have not already, I would not recommened RTFA - it's a load of faulty logic that doesn't add up and finally culminates with the uninsightful revelation that rebates are the corporate world's gift to mankind and we should show some gratitude to our marketing overlords. WTF?

    Rebates work because of breakage and interest made on the delay - they are generally a pain in the ass and are a perversion of the common free market practice of purchasing goods. Sure, if the deal is sweet enough I will succumb, but I (once more) feel like the kid who has to do a little dance to get his stolen lunch back from the bully.

Re:The other thing to consider..

[symbolic]

If you make a purchase where you have to deal with five separate vendors for rebates (as did the person in the article), aside from potentially not getting your refund, you now have FIVE MORE commercial vendors with your name, phone number, and address.

For me peronally, I don't care how much the rebate is...it's just not worth it to prostitute myself like that.

Re:Tax deductibility is better though

[PsiPsiStar]

millions of people on welfare depend on taxpayers.

Welfare is less than 1% of the federal budget.

Though I assume you were just trolling, or you'd post with a username.

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.

i don't care what anyone says...

[drewxhawaii]

...but i've only gotten checks from about 50% of the rebates i've sent in.

i refuse to deal with them any more.

Information gathering?

[Cutterex]

Hopefully this hasn't been mentioned to death and I didn't notice it. Has the topic of gathering and/or selling customer information been breached? I would think the possession of all the intrusive rebate form responses, not to mention the address where the rebate will sent, would be valuable to the companies who receive them.

I'll take the bait

[abbamouse]

I assume this article is really an excuse for us all to gripe about our rebate experiences. I sent in a rebate form, original receipt and UPC for a Brother all-in-one machine MFC210C which I bought at Fry's. Guess what? They notified me that the original UPC wasn't included. Then they refused to accept a photocopy (my proof of what I sent them) because only the original UPC (which I sent them) counts. Yep, I feel ripped off. I suppose I could complain to the consumer protection folks at the AG but how do I prove I sent an original UPC? As I recall, it's only $20 which is even too small for a small claims action (filing fees are more!)

Re:Duh

[yeremein]

This made me a customer who no longer shops at circuit city as a result. I supposed I could shop at ..gulp.. worst buy even though they treat their employees like dirt and seem to be the walmart of the tech industry.

Nah, Wal-Mart at least has low prices...

I have a guess on this.

[tkrotchko]

I think there are companies that essentially assume the debt of rebate and then make money on not paying them.

What I mean is, if you are "SuperComputerManufacturer" and offer a rebate of $10 on 1 million items, you now have a liability of $10M dollars.

I think that companies will then bid on the debt to pay the rebate. In otherwords, they'll bid an asking price of $9M. Therefore the manfacturer gets out of $10M of debt for $9M, and the rebate company makes $???? money by assuing they'll only get x% of the rebates properly cashed. So every rebate they deny is essentially their money.

It really makes perfect sense (although this is pure supposition).

And if this turns out to be viable business model, I own the patent.

You are not paying your fair share!

[NotQuiteReal]

:-)

More a statement of the US Tax system than anything else.

BTW - you are not screwing the government, you're stealing from your business!

For all you other whiners in this thread - have you declared State "use tax" if applicable to out-of-state purchases (e.g. Internet) which didn't collect your local sales tax? I thought so.

to screw the share holders, that figures.

[twitter]

You forgot two other reasons: One: So called Earnings. ... Two: balancing out the 30 day return.

So you lie to your shareholders about your earnings. Why not? The whole deal is a big FU to the customer and the employee.

I know someone who actually worked at a CompUSA and they hated it. They told me the whole place was all about sucking the maximum amount of money from the customer and that it was a miserable place to work. The work was monotonous and management was as abusive to them as they were told to be to the consumers. If you think rebate coupons are rotten on your end, think about the peon on the other side of the register.

This person was amazed when I told them that I had worked at places that actually cared about their customers and tried to get them what they needed instead of what earned the most money in order to build customer loyalty and trust. It was like a culture shock after so many months of abuse.

The whole Wintel group is a kind of anti-company. A company exists for the benefit of three groups: the shareholders, the employees and the customers. No one group should be screwed for the others and any company that does will get around to screwing them all. Microsoft, CompUSA and ComputerWorld all collude to screw people. Microsoft has the upgrade train to move their software and other people's hardware. CompUSA tells you how smart you are to buy into it all, when they are not telling you to suck it up for a "rebate" you may or may not ever receive. When someone tell you to "suck it up", you are in bad company and it's time to go somewhere else.

The whole thing is a huge fraud. Not sending the rebate checks at all is not beneath companies that have paid PR firms to write letters from dead people to congress critters, sued public school systems, operated close to 20 years before paying a dividend and think spyware and popups are part of business as usual. I'd rather spend a few hours making a computer from the garbage work than I would filling out rebate forms with what some dumb slob thinks is valuable marketing data.

THIS is why they do rebates...

[MaTriXxx1]

First off, back before I started my career in the IT world, I was stuck working at office stores. (staples, circuit city, office depot) and they all had rebates, and they all had MANY customers coming in screaming that they never got their rebates. With that being said... Here is why they want you to do the rebate crap. Cut the UPC off the box, and send in your reciept.... Product breaks 2 days later, good luck returning that product to the store with a cut up box!!! Now your forced to deal with the manufacturors warranty (aka, send it in, and you may recieve it back in 3 to 6 years) THAT, in my opinions, is why rebates exist... to keep the average Joe from returning products to the store they bought it from.

Don't like rebates? Here's what you do...

[Macdude]

So you don't like rebates? Here's what you should do.

Go to the store and take the flyer showing the rebated price in big letters (and the real price in teeny letters) with you, pick the item up off the shelf and take it to the counter. When the sales-droid rings up your purchase and tells you the price tell them they're wrong and show them the ad. When they point out the fine print, point out the big print and tell them that's what you're going to pay. Argue with them for a bit. When they won't give you the advertised price call the manager over. Argue with him for a bit. When he won't give you the advertised price leave the item on the counter and walk out.

The retailer will hate this, you've caused a scene in their store, delayed the cashier from ringing through purchases, annoyed other customers and they've lost a sale. If just a couple of people did this per store per day rebates would end in no time.

If you're really keen, after this file a complaint with the consumer protection department of your local government (don't bother with the BBB) claiming "bait and switch", unethical business practices and deceptive advertising.

And there is the reall dirty secret...

[Belial6]

"Worse, I can't return the router without the reciept."

Yes, the stores and manufactures rely on people not submitting the rebates. Yes the stores and manufacturers rely on "loosing" or denying rebates for added profit, but in the end, even in a best case scenerio, you loose the right to return the product. So, when the product does not meet the specs on the box. Too bad. If the product dies three days after you bought it, you have to go through the expense and hassle of returning the product to the manufacturer. This is something that they know many people won't do.

"Very few are rejected"? Bullshit.

[The Wicked Priest]

The quote in the summary is bad enough, but if you follow the link, this Stephen Baker character actually has the nerve to say that "very few [rebates] are rejected". I fill out my forms to perfection, and they're routinely rejected. Most often, they claim I didn't include the UPC. When I call them and tell them I did, and that I have photocopied proof, they'll reverse themselves... when I can be bothered to call.

Oh, and how about that absurd multi-month processing delay? It seems calculated to be just long enough to make you forget that you ever sent anything in. What really gets me is this typical* email from Parago: "Please allow 8 weeks from the postmark date of your submission for processing your rebate." This is four days after I sent it in. They already entered my email address and name, at least, correctly into their database. So what do they need the other seven and a half weeks for?

* I say "typical", but of course it's even more typical to hear nothing until the check arrives, if it ever does.

Re:Tax deductibility is better though

[greenrom]

I call bullshit. The 2005 budget was $2.4 trillion. Medicaid alone made up $188 billion of that. That's almost 8% just with that one program. If you go a step further and and include medicare and social security which are essentially welfare benefits funded by payroll taxes that are paid to the elderly, unemployed, and disabled, it adds up to almost $1 trillion of the $2.4 trillion budget. Then there's all the other programs like food stamps, WIC, etc. I'm not going to go through the budget and add everything up, but total spending on welfare programs is clearly more than 1% of the budget.

Here is the source for these numbers.

Re:Where does that tax go?

[Jah-Wren Ryel]

although devoid of understanding of the use tax.

Pot, meet kettle.

http://www.ct.gov/drs/cwp/view.asp?a=1477&q=269924 #Coupons

Q. If my customer uses a coupon when making a purchase, do I charge sales tax on the price before or after subtracting the coupon?

A. Sales and use taxes must be calculated on the sales price net of all price reductions from coupons. Any additional value assigned by the retailer, such as to double or triple the coupon, is also excludable from the sales price. For example, if the price of the item was $5.00 and the customer presented a $.50 coupon, sales tax would apply to the net price, $4.50.

That's for Connecticut, I recently looked up the same for Texas with the same results. From my experience, having lived in 9 other states from one end of the country to the other, that's pretty much the way it works everywhere.

Re:They work

[arkanes]

I don't buy the articles premise. Firstly, offering a rebate instead of an actual sale price or discount of the same amount is *more expensive* to the store - they have to either manage the rebate handling or (more likely) pay a rebate processor to do it for them. So the only reason a store would do it is because the amount of people not filing the rebate makes up for the extra cost. My father in law has worked processing rebates and according to him the actual fulfillment rate is tiny. He does not believe that his company could have made money if the fulfillment rate was high.

Secondly, nobody involved in the rebate process has any interest in ensuring you get your money - they already have yours. You are basically at your mercy. There is only the market pressure of bad customer experience, which is a relatively weak force - and it means that you need to go out of your way to ensure that you get what is owed to you. If you tried the same tricks on your Best Buy Financing payments that they use on your rebate checks, you'd watch as they destroyed your credit rating.

Rebates are absolutely a scam - the fact that you can, with not inconsiderable effort, reduce the effect of the scam does not change that fact.

Re:The other thing to consider..

[SilverspurG]

Agreed. And here's why.

I was at the bank the other day. I walk up to the teller to take care of my transactions and, after she accesses my account, she says,"Oh. You live at such-and-such address? I used to live in that building as well."

WAIT.

How much do I want unprivileged people (bank tellers, rebate processors, anyone) to know where I live? I don't know where they live. Lord only knows who works in those institutions.

Re:Where does that tax go?

[magarity]

Pot, meet kettle.

Special person, meet me.

From my experience, having lived in 9 other states from one end of the country to the other, that's pretty much the way it works everywhere.
 
Well, you're very special to have lived in 10 states and therefore safely deduce ten are like fifty and call people names.

But maybe all fifty aren't like ten.:
Because the retailer is reimbursed by the manufacturer for the amount of the reduction, sales tax applies to the full selling price before the deduction for the manufacturer's coupon.