Let's Have A Rebate Debate
MayorBob.
Posted to Business on Thu Dec 28, 2006 at 06:58:43 PM EST (promoted by port1080). RSS.
Most of us have been there. You went out and purchased your wireless, Hi-Def, digital Ramalaminator and paid (US)$250 for it. But wait, if you match up the receipts with the bar code, fill out the paperwork and mail it into Ramalaminator Inc. within the next two weeks, you'll get $100 back in a rebate! Sounds like a deal, so you buy the thing with the best of intentions of taking advantage of the manufacturer's largesse. But there's a dark side to the bright prospect of getting money back, of course - dissatisfiers like lost receipts, taking too long to claim a rebate, the glacial pace of the postal system, glitches in the rebate process, even dishonesty on the part of the manufacturer. All these things add up to a feeling that rebates aren't really worth what retailers make them out to be. They also leave the buying public with questions of why can't manufacturers just drop the prices on the stuff they sell and save us all from rebate hell?
One complaint customers have regarding rebates is the disingenuous way they are marketed. Case in point, the price after rebate is listed in big bold letters on the store shelf, while the price you'll be paying at the register isn't as boldly displayed. But, you've already bitten into the concept of buying the thing and you just want to get out of the store and home to set up the Ramalaminator, so you pay the full price. After all, you got the receipt and the rebate forms, what could go wrong?
You might wait too long to begin filling out the form. You might have tossed the receipt or the package with the original bar code on it. But, if you're lucky enough to have done this, you send off your multiple rebates to several different manufacturers. Now, you have run into the problem of keeping track of them. Voila, there are tools and products available to help you keep track of rebates.
This is when you enter rebate limbo. You've been waiting forever for your checks to come in and so you have to call the manufacturer. This will either expedite your rebate check (if you define expediting getting it two months after purchase) or a sour stomach from talking to a customer service functionary. Examples of rebates gone wrong aren't difficult to find seeing as how they tend to be legion.
With the opportunity high for customer dissatisfaction so high, one wonders why companies don't just discontinue offering them. Part of it might be because the rebate redemption rate is so low - 20 percent. However, that rate is based on total sales - a fairer statistic would be the redemption rate for incremental sales (the rate for items bought by customers because a rebate was offered). That rate works out to about 68 percent. Thus, it means that a lot of customers are taking the time to send in the rebate forms after all. The potential for dissatisfaction being what it is has led Office Max to opt out of mail-in rebates last year. Best Buy has announced they will discontinue the practice in 2007.
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