Mail-in Rebates
If you’ve ever purchased something that offered a mail-in rebate, then you probably share in my frustration over the process. Several stores, including OfficeMax, Staples, and Best Buy, use mail-in rebates extensively in their sales promotions, although Slashdot reported on an article that reported Best Buy is trying to phase out some of their rebate programs by 2007.
Wikipedia offers the following reasons why mail-in rebate programs are so attractive to retailers:
- Only a small percentage of people remember to mail the coupons. While the return rate varies greatly depending on the amount of the rebate, the particular store, and the particular product, a general estimate is a return rate of less than 10%. Some estimates have been as low as 2%.
- During the turnaround time, the company can continue to earn interest on the money.
- If the turnaround time crosses a financial period boundary, such as annual quarters, a rebate offer can be used to inflate sales at the end of a period, at the expense of the initial budget of the next period.
- Extended warranties and other price-dependent factors always use the initial purchase price, not the price after the rebate.
- If the rebate is from the manufacturer, the retailer has a “free” sale.
- If the rebate is from the retailer, the manufacturer has “free” advertising.
- Rebate can also be used to collect consumer information as it is required by most rebate forms for consumers to fill in personal or household information. This information can be used by producer or retailer to analyze consumer behavior.
Senator Charles Schumer (D - New York) offered this press release earlier this year offering a heads-up to consumers about the potential pit-falls of mail-in rebates, as well as several suggestions to make sure you are treated fairly by the retailer in redeeming your rebates.
Consumeraffairs.com also has an article called Rebate Madness - How To Defend Yourself Against Ruthless Rebate Scams, which covers many of the same topics.
Also, the Federal Trade Commission issued a consumer alert about mail-in rebates including the following:
When purchasing a product that offers a rebate, the FTC encourages consumers to:
- Follow the instructions on the rebate form and enclose all required documentation in the envelope when filing for a rebate.
- Make a copy of all paperwork to be mailed when applying for a rebate. It’s the only record a consumer will have of the transaction if anything goes wrong.
- Contact the company if the rebate doesn’t arrive within the time promised.
- If the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, the state Attorney General or the local Better Business Bureau.
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