I’ve had quite a few years of retail experience and one of the most common questions was about rebates. Most of which included why a customer didn’t receive their rebates in the mail. People tend to forget that the store itself is not responsible for making sure they receive their rebates from their purchases. So that begs the question, why in the world do manufacturer’s offer rebates on their products? Why not just discount the price from the start?

Here are 7 reasons why companies offer rebates:

Companies count on the consumer to forget to mail in the rebate. Very often there are very tight guidelines to make sure the mail in rebate is postmarked by a certain date. We lead busy lives and it’s easy to forget to mail in the rebate, especially if we purchased the product regardless if there was a rebate at all.  According to national statistics, less than 40% of consumers actually take advantage of rebates.  This is especially true for rebates that are only for a few dollars.

Your rebate may not actually be cash back, but store credit. This allows the company to gain even more business once you receive the card in the mail. They rely on your next visit to purchase even more than what the card is valued at.  It’s a win win for them. These are starting to be more common in our current economy. Any way to bring in business is welcomed.

Rebates often ask for many pieces to fulfill the rebate, which if not followed, could lead a denial of a rebate. Did you include the UPC? How about the original receipt? What about making sure you purchased the product during the specified time? It’s not uncommon that the wrong item was purchased and it’s probably too late to return item after you hear back from the manufacturer.

Most likely when sending out your rebate, you can become victim to your information being sold to third parties. Sometimes rebates will explicitly say that your information won’t be sold, but you still could get mailings from the company in the future. Also, it allows them to gain insight on the purchaser for further marketing promotions and research.  Of course, sometimes getting additional coupons in the mail for new products isn’t a bad thing.

To ensure the product is kept and used. Most of the time, a store will not return a product without a UPC in tact or an original receipt. There are exceptions to the rule, but where I worked we were not allowed unless it was exchanged for the exact same product. Of course a common practice is to buy a product, send off for the rebate and sell the product on eBay.

It’s an easy tool to draw people in to make a purchase. They let the store, such as Buy.com or Staples to do their marketing for them. Usually deals with rebates are always on the stores hot list to get people in the store. Getting the consumer in the door for one thing will ultimately lead to further purchasing. You buy a printer and now you need to buy a cable too!

It takes a long time, for the most part, for manufacturer’s to send out the rebates. It’s very typical for the fine print to read that it takes 9 – 12 weeks to receive the rebate. This allows the company to hold the money longer to earn extra interest before having to release their funds.  While it may not seem like much, after thousands of units are sold, it could become substantial. Also, rebates are typically handled by third parties, so there is additional processing time that could result in a delay of a rebate.

I’ve done many rebate transactions over the years and I’ve yet to get burned. I still make sure there isn’t a better deal overall when I’m shopping for things we need.  Sometimes I’ll avoid a rebate worthy product if I can find the same product for a similar price elsewhere without the rebate, especially if it’s only for a few dollars. Not that I don’t like saving money, but I like the flexibility to return it hassle free since most rebate products I buy are electronics.

Of course, these are just my opinions in regards to why companies offer rebates. I’ve never been affiliated with a company that processed rebates, so I would be interested in hearing why a specific company offers rebates.

So readers, are you a fan of rebates or do they leave a sour taste in your mouth?

Stupidly Yours,

Matt