Computer Rebates Not As Sinister As You Think 468
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.'"
Rebates Suck (Score:5, Informative)
I'm a rebate whore (Score:5, Informative)
Who is this, Joe Isuzu? (Score:5, Informative)
Putting aside the obvious question (who the fuck is The NPD Group? [npd.com] 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.
The Lie... (Score:2, Informative)
You know what they say, "Fool me once, shame on you - Fool me twice, shame on me"...
Re:Duh (Score:5, Informative)
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
Re:Duh (Score:3, Informative)
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.
Re:Duh (Score:2, Informative)
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).
Re:Is this just a US phenomenon? (Score:2, Informative)
Re:Rebates Suck (Score:5, Informative)
Rebate Ripoffs at Fry's (Score:3, Informative)
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. (Score:2, Informative)
Basic economics, anyone? (Score:0, Informative)
There are two simple reasons that rebates exist, and they're very easy to understand:
1) Money now is worth more than money later
This is always true. Even if they're only gaining a little bit of interest on the $40, a retail chain could sell 1,000 units and earn interest on $40,000. Even if it's a low rate, that's still a few hundred dollars to offset the costs. Furthermore, if they time it right, they can have money in their pocket and look profitable for a little while, send out the rebate checks later, and still end up being profitable because:
2) Rebates are a form of "hurdling". By creating arbitrary hurdles for consumers to overcome to get a price break, they can more effectively address individual demands for a product. Let's say 10,000 people are willing to buy product X at $100 and another 4,000 people are willing to buy product X at $60. By having a mail-in rebate, consumers who don't mind spending ten minutes filling out a rebate form and mailing it in can jump a "hurdle" and get the product at a price that they are willing to pay while many of the 10,000 who would have paid $100 will get the discounted price as well. The ones who don't take the effort to send in the rebate will not get the discounted price, but they were willing to pay in the first place.
Yes, it's annoying when companies have scam rebates and don't send them back. Yes, it can be a lot of work to get your rebates back. My parents have been buying items with rebates for years now and have only failed to receive a few rebates. But there's nothing wrong with taking advantage of "breaking" - if a person figures that it isn't worth their time to send in a rebate, they don't get the discounted price. It's an effective way to price discriminate and sell to different people at different prices, and the net effect is that everyone benefits.
Re:The Joy of Buy.com Wireless Rebates (Score:2, Informative)
Wait 'till you get rejected 8 months from now for not having that UPC, and have to convince somebody at a rebate center to give you $200, especially since they probably don't speak English and have no discretion to help you out anyways.
My favorite is when there are two rebates on one item, and both require the original UPC. Or one says "not valid with any other offer" even though the advertised price included both.
Re:Duh (Score:1, Informative)
Now as for the comments about Staples putting out items wherin the Rebate is about to expire you will notice that rebates will say that the item must be purchased by a certain date and postmarked by a much later date. This is because they dont actually undermind the return policy, everyone has 30 days from purchase to send off the MIR. They just don't let you know about that.
Just a hunch but... (Score:2, Informative)
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.
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.
Re:The Joy of Buy.com Wireless Rebates (Score:2, Informative)
more FUD (Score:3, Informative)
Re:Is this just a US phenomenon? (Score:2, Informative)
Re:I hate rebates (Score:2, Informative)
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 [netstate.com]).
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:Where does that tax go? (Score:5, Informative)
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.
i don't care what anyone says... (Score:2, Informative)
i refuse to deal with them any more.
Re:Who is this, Joe Isuzu? (Score:5, Informative)
http://yahoo.businessweek.com/bwdaily/dnflash/nov
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? (Score:2, Informative)
"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.
Re:Duh (Score:3, Informative)
Nah, Wal-Mart at least has low prices...
Re:The Joy of Buy.com Wireless Rebates (Score:3, Informative)
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!!
Blinded? (Score:1, Informative)
One example; I have shopped on black Friday for four straight years and out of an average 15 rebates per outing that I've filled out, each time I had three rebated rejected. Three rebates! That's a 20 percent rejection rate! I followed all the guidelines on each rebate too, copied everything, mailed them the day after the purchase, and even went as far as to purchase delivery confirmation on several of the submissions. And still I ended up with rejections! I can't imagine what the average Joe who doesn't have a copy machine and doesn't double check his rebates goes through.
Through lengthy correspondence with the companies and re-submitting the rebates (with copies of the original material I sent), I was able to resolve all but one of the rebate rejections. The one which I never got was *drum roll please* a $20 CompUSA rebate, which by the way, I sent two resubmissions for. Both times I contacted the company a month after I mailed the resubmissions, and both times I was informed that they had never received the letters. When I finally told them I was able to produce delivery confirmation for the last mailing, they said the resubmission deadline was up and to "have a nice day". *click*. I wasn't going to spend $50 to file a claim so I didn't pursue it any further.
This year I did all my shopping at Staples, which, as mentioned, has the "Easy Rebate" system for almost all rebate purchases at the store. It's nice not having to send in forms and UPCs that can get "lost"; now they have no excuse as to why they can't fill my rebate! I advise skipping stores like CompUSA which have shady rebate (and retail!) practices.
You are not paying your fair share! (Score:3, Informative)
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.
"Very few are rejected"? Bullshit. (Score:3, Informative)
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 (Score:3, Informative)
Here is the source for these numbers. [whitehouse.gov]
Re:Where does that tax go? (Score:4, Informative)
Pot, meet kettle.
http://www.ct.gov/drs/cwp/view.asp?a=1477&q=26992
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:Where does that tax go? (Score:3, Informative)
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. [state.co.us]:
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.