Why Mail Rebate?

[sai]

Hi guys,

I've participated in a couple of mail-rebates and they work great and I love them.

But I was wondering why these big companies do mail-rebate instead of just giving you an instant-rebate at the shop.

I'm sure there is an economical, accountant or taxes related reason for it and I would love to know it,

thank you

[warrenlewis]

The response rate for mail in rebates is 14%.

[geoffs]

Warren if thats true it is amazing.Money seems to have so little value to the majority of people.?

[joshroot]

I do not know that the number is 14% for camera equipment. I think that is an industry number that includes the $1 rebates for lightbulbs etc.

 

But the point is still the same, some percentage of people won't bother to take the steps to get their rebate, or will lose the necessary documentation, or some will simply forget to do it. In any case, every person that doesn't get their rebate is one person that the company won't have to pay. If the company gave an "instant" rebate, they would have to pay 100% of the people.

[zorro de platte]

I too have often wondered why companies do this, I looked at a HP computer this week in Staples it cost $849 with a $500m rebate from HP. I bet you pay the California sales tax on the total $1349 not the $849 and that is a rip off. Am I wrong about this? Des

[kelly_flanigan1]

Most folks cannot read and follow EXACT instructions; thus as Warren pointed out the payout is low. The rebate allows a company to make the sales quarter; let it be boosted; this helps with clearing inventory; stock options and impressing Wall Street. A rebate may say to photocopy receipt; circle the price; include the UPC from the box; mail one to Snails Bend, another to Rebate City. Most folks assume; most cannot follow the exact instructions; thus they blame the rebate clearing house instead of their dumb upbringing. To many folks following exact instructions is not in their DNA; they assume stuff; assume that the clearing house will bend the rules; its a good bet since many folks are cocky; they "skim" the instructions and connect the dots; assuming that it somehow will magically work. Maybe if it was sports and basketball folks could walk the ball; use ladders; use a smaller ball; rules might make sense. The problems with most all rebates not being awarded is due to not following the rules; ie the duffus factor. <BR><BR> An instant rebate has a radically higher payout; it frees the duffus brain of the dumb buyer from actually reading; actually follwing exact instructions. It also has a WAY higher cost; since the "assumers" get a rebate.<BR><BR>The rebate chaps know that a rebate is a lure for sales and many folks cannot follow instructions; thus its a good lure with a small cost. An instant rebate has a radically higher payout than a mail in one; thus its more like a discount.<BR><BR>A mail in rebate has a real low return; the number actually filled out properly is low; the payout is often by check; issued weeks, months ; a year later. The typical duffus assumes that they can not follow the rebate rules; mails it late; doesnt circle the price; omits the UPC label; doesnt photo copy XYZ; mails it off to the wrong addresses; thus they get no rebate.<BR><BR>Rebates are also used as marketing data; what a real gizmo sold in Ames Iowa at a brick and mortar store on ABC date.

[JDMvW]

Although, with some struggle on occasion, I have always got my rebate eventually, my general policy is to only

buy such rebated products if the cost without the rebate is a bargain. At the least, the company offering the

rebate gets an interest-free loan for however long it takes.

[kelly_flanigan1]

A successful mail in rebate entry is often done by a person who can read; follow directions; follow EXACT directions; by folks who are not living in a fog. The rules are purposely made HARD; confusing; with dates and things to photocopy, circle and mail. The mail in rebate filters out the typical person living in the fog, the duffus; the assumer; the person who is late, the folks who connect the dots; or maybe folks who just forget about it too. Many folks just mail parts A and B to address Z; instead of Z and Y to save a stamp and the rebate is rejected. The rebate screeners dont get brownie points for allowing wrong rebates to slide thru; they get fired for not following the rules. Its their job to check the goofy things; and reject the mostly ill rebates. Read and reread a rebate and follow the rules and you will have a higher return. If it says to circle the price you paid on a photocopy of your receipt; do it; do not let that duffus DNA in all of us take control.

[kelly_flanigan1]

In NEW stuff thats hawked on Ebay the item might be under a rebate period; the item is still in the box unopened but the UPC label is removed;and thus the rebate will not work. Here I have seen this with flash memory cards; hard drives; and power tools. I have also seen where the UPS label is gone on power tools at the box stores; like a yoyo removed it for their rebate; or the store has; or whatever. Here the failure mode for me has been to "put off working on the rebate"; and thus the rebate cannot be used.

[sai]

So it's all about companies taking their chances. That makes sense.

But now, for example Mac, you do the whole rebate process online and you only give them your receipt numbers and BUM 5 days later there's a cheque in your mailbox.

Thank guys!

[Michael R Freeman]

>"But I was wondering why these big companies do mail-rebate instead of just giving you an instant-rebate at the shop."

 

As others have noted, the numbers that will actually properly redeem the rebate are quite low. So companies entice a lot of buyers to purchase their wares, and with the low qualifying percentage, the net cost to the store/company is considerably lower than the offered rebate.

 

Also, at least here in Canada, you have to pay sales taxes on the price *before* rebates. So the deals, which may look very attractive, are actually less so.

[RobertChura]

You are the only person I know who has stated they love rebates

[richard_beisigl]

Could it be that the companies who offer rebates do this to get consumers names, addresses, phone numbers, and e-mail addresses as well.

Then they can call, e-mail, or send you unwanted junk.

[marc_bergman1]

Before we put all the blame on the stupid public at large let's consider another possibility.

 

Many rebates are administered by someone other than the manufacture. What is their motivation for authorizing the rebate check? Do they receive a bonus for the number of rebates?

 

I know how to fill out the forms and include the proper items. I have a positive experience about 80% of the time. I consider the others to be ripoffs and I don't buy from that company again.

 

Generally a rebate offer has to be worth my time. I find so many products I want to be on sale that I tend to exclude most rebate offers.

[rogerjporter]

You have to consider too that if the shops drop the price, it is a bigger hassle for them. they show lower profit dollars on

their p&l statement, which owners and investors hate, which could ultimately lead to the store closing. If the manufacturers

are hot to incentivize the consumer to buy something, why should the store drop their prices and take the hit. Even if the

manufacturer reimburses the store, the store still shows huge revenue drops. I sold "free" after rebate printers for a living

for years (along with the cameras to qualify the deal) and our statistic was 11% of people will not redeem the rebate. It's a

gamble for the manufacturer to do it, but if you take into consideration the cost of ink (in the case of printers) it shows the

true value of the printer itself, and the manufacturing cost of the replacement inks. no, printer companies do not take losses

on these deals. they still make lots and lots of money off us.

And Marc, to answer your question, the motivation for outside companies to handle rebates is money. there are a ton of

rebate fulfillment centers out there than the specialize in this service, they run the whole outfit saving the photo and

computer (or whoever) companies personnel costs and the headache of doing it themselves. It's a business service, much

like janitorial companies, outside accountants, or green-thumb companies to keep your plants healthy.

so stick it to the "man" by always mailing in your rebates is the moral of my story!

[mike_sinquefield]

Don't forget the cash flow aspects of the mail in rebate. The manufacturer holds onto those rebate dollars until you send in the paperwork. Even if there was a 100% response of correctly filled out rebate forms, the company still has that extra money for at least an extra 6-8 weeks.

[matthew_newton]

Also most companies rebate programs are funded by marketing budgets, and do not impact product income/revenue the way that it would if they simply just reduced the price. That and the low response rate.

 

I have seen a few (homedepot) start to do online rebates. I am still not a fan of rebates, but if you could at least move away from a paper process that would be nice. It would probably save manufacturers/retailers some money as paper processing is human resource intensive (after to process them by hand) despit probably having a somewhat higher rate of filing.