Rebate experiences

Submitted by brad on Tue, 2007-01-02 13:30
Topic: 
Observations

I wrote earlier about the controversial topic of discriminatory pricing, where vendors try to charge different customers different prices, usually based on what they can afford or will tolerate. One particularly vexing type of such pricing is the mail-in rebate. Mail in rebates do two things. In their pure form, they give a lower price to people willing to spend some time on the bureaucracy. As such, they would work at charging richer customers more because richer customers tend to value time more than money compared to poorer customers.

However, they are rarely that simple. Some products offer ridiculously low rebates it's not worth anybody's time to process -- they are not much better than a trick. With higher rebates, often the full price is inflated to make the discount appear larger than it is. This can also be a trick. A person who has decided she will not do rebates should normally never buy such a product, however, in many cases people do buy them, and never get around to processing the rebate.

While the vendors never release figures, clearly many people never get their rebate. Companies that manage rebates can in fact make fairly realiable promises about how many of the rebates will actually be redeemed. While I suspect the largest reason for non-redemption is "not getting around to it," in many cases rebate programs work to make it hard to redeem. They will make the redemption process as complex as possible, and not redeem on any little error. Some companies have even been found to have fraudulently failed to redeem correctly prepared rebate forms, waiting for customers to complain and paying only if they do. Of course, few customers complain, as it's even more work, and of those who do, few retain the documentation necessary for a complaint. In many cases, customers do not even keep note of what rebate requests they sent out. Rebate companies tend to deliberately take as long as possible -- usually several months -- to process rebates. This is partly to keep the float on the money, but also I suspect to make people forget about what they are waiting for.

As such, I avoid most rebates, but I do do some of them. In particular, if I can do rebates in bulk, it can be worthwhile. In this case (usually around the holidays) I will gather together many rebates and fill them out all at once. I took a sheet of laser printer address labels and printed out stickers with all the common items desired on rebate forms, including name/address stickers which I already have, and stickers with a special E-mail address and free voicemail only phone number (ipkall.com) to speed up the process.

This year, several rebates now "offered" online processing. This turns out to save time for the company, not for you. You fill in the information (saving them data entry work) and it prints out your rebate form, which you must still mail in along with the original UPC and some form of original receipt. (Fry's has automated their end of the rebate process, printing rebate receipts and rebate forms on thermal printers at the cash register.)

One of the companies, onrebate.com seemed like an even nastier trick. On my first visit the site was incredibly slow, taking 30 seconds per page in a multi-step process. However, a later visit was OK. However, they of course do nothing to make things easier, like re-use of data on a second rebate (including some of the famous "double rebate" products.) One thing they offer which is very positive is payment of your rebate via paypal, which has two giant benefits -- no need for a trip to the bank, and easy tracking of when you are repaid. In addition, it eliminates the common trick of printing rebate cheques with "not valid after..." legends set for the very near future, another way they block redemption.

Onrebate also offers quick payment, if you let them keep about 10% of your rebate. Of course this is a bad deal to just get money 2 months sooner, but we know people fall for it. As an experiment, I filed two rebates with them, one with the instant payment and one without. I got the notice of processing on the instant payment one first, saying I would be paid within a couple of weeks. On the other hand I got the money on the other one first! E-mail notification is positive for tracking, of course. Some companies go the other way. I received a $10 rebate check recently with no indication, other than the name of the general rebate processing company, of what it was for. This helps confuse people about what rebates they have received and not received.

Even with the streamlined bulk process, however, it took too much time this year. One needs to check that one has followed all the rules, which often vary. Some demand signatures, some demand emails, some demand phone numbers. Some demand copies of receipts, some demand originals. Some demand web processing. Almost all demand original UPCs which can be hard work to cut out of products. Some demand copies. A quick and easy idea for "copies" is to use a digital camera to take pictures of the various items. This also is a quick record you can go back and check should you have the inclination. It doesn't say the copies have to be very good. Most households don't have photocopiers any more, but almost all have digital cameras and printers, which is even easier than a scanner.

(I also have a small sheetfed scanner I use for my paperless home efforts, but it has problems with thermal paper receipts.)

We'll never see this become easy because of course the rebate management companies want the redemption rate to stay low. I presume some of them even market to the vendors the low rates, otherwise we would not see the "free after rebate" concept that has become more common.

I filed claims for $290 in rebates this December. So far one $60 (paypal) and one $10 have come in, and the expedited paypal rebates have not. I don't expect to see much before late February, however.

Outside of bulk processing or very good rebate deals, the non-redemption rate seems to make it better to always check if there is a non-rebated product at a good price. Figure out your own "discount rate" for how often you personally complete rebates and how often you actually receive money. I doubt many get 100%. Then factor in a value on your time -- what do you get paid per hour, figuring 2000 to 2500 hours for salaried people? Expect to spend 10 to 30 minutes on a rebate form, including post office trips, bank trips etc. (This is much lower if you regularly go to these places, or have at-home mail pickup as I do.)

Of course, you may not even agree with the company's original goal -- to find a way to charge more to people who value time over money, and thus less to those who value money over time. It is interesting, however, to speculate on what other systems might be devised to reach this goal that are not so random and bureaucratic as the rebate system. For example, use of the web only became practical once you could presume the "money > time" crowd had web access -- a system that allows discounts only for the rich is not going to be very effective. I am interested in alternative ideas.

One might be to offer the rebates to those who agree to take a web journey that exposes them to advertising. This both assures they value money over time but actually sells that attention. A web process, upon which you are paid by paypal at the end, could be highly reliable without the "lottery" factor. Vendors could even start including tokens in products with one-time-use numbers on them which people could type in rather than having to mail physical UPC codes. (However, the mailing of the UPC code, aside from adding work and cost to the process also is important for disallowing returns of products after rebates are filed. Stores would need to check that the token number was present, and not used, before doing a return.) Stores could also print a similar magic number on sales receipts.

The work associated in the logistics of rebates can't be eliminated by the web, though. The goal, after all, is to make the process time consuming, so you can only shift work from one place to another. But it can be made less random, which would actually encourage more people to buy rebated products if they truly believe they will offer up their time and attention.

Share on:
  • Reddit logo
  • Facebook logo
  • Twitter logo
  • LinkedIn logo

Comments

Brent Chapman

Wed, 2007-01-03 16:14

I routinely buy rebated consumer electronics items, and file the rebates pretty quickly (usually within a week). I keep a folder of pending rebate claims that I'm awaiting payment on. Right now, all that's in there are rebate forms for two TiVo units (one of which is a $220 rebate on a $219.99 purchase) and a Verizon Treo 700p that I bought in early December, all submitted on 12/12/06. So, I have a 100% success rate in claiming rebates over the past several years. Per my records in Quicken, in the past couple of years, I've claimed about $600 worth of revates on TiVo units, disk drives, software, LCD displays, and memory cards.

So, rebates work for me.

Moz

Thu, 2007-01-04 04:26

I've had a couple of strategy board games last year that came with a code you could type in to get a few months of playing the online version free. This is both a good idea (practice playing against the AI to learn the rules and basic strategies, or other players to hone them) and good marketing - they get to show you their other products and any expansions. Which worked on me. Where this breaks is encouraging people to search for free online versions, play them, then decide the game sucks (I've done that too).

But the rebate scam... just say no. Closest I've come is offering to split the ($300) rebate with a cash-poor friend if they did the work... I'd pay them the after-rebate price plus half the rebate, they had to collect the rest. No interest from them even though they were trying to sell me on the rebate idea. I'd rather wait or buy off ebay (I trust eBay sellers more than rebate offers... hmmm).

Anonymous

Thu, 2007-01-04 14:33

Your article mentioned onrebate.com as offering good options; however before using them I checked first via Google and found hundreds of people claiming fraud. They did not get paid regardless !

See some of the complaints:

SCAMS Onrebate.com / TigerDirect.com
http://www.tigerdirectsucks.org

This shows that TigerDirect and Onrebate.com are SAME:
http://jerryfeil.com/tigerdirect.htm

YOUR PERSONAL information is for SALE:
http://glaserlists.com/Lists/OnRebate%20Enhanced.htm
http://directmag.com/mag/marketing_listline_29/

PLENTY about Onrebate.com:
http://www.tigerdirectsucks.org/index.php?disp=comments
http://www.ripoffreport.com/results.asp?q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search!&q5=OnRebate
http://www.xpbargains.com/xpricer.php/store_reviews__store--Tigerdirect.htm
http://www.resellerratings.com/forum/showthread.php?t=117159&page=2
http://digg.com/tech_news/TigerDirect_and_OnRebate_Scam
http://www.thewolfweb.com/message_topic.aspx?topic=431408
http://forums.slickdeals.net/archive/index.php?t-189363.html
http://www.bl3nder.com/music/rhapsody/reduced.php?entry=NBSPMNTBRPBLKSPTMR
http://forums.windrivers.com/archive/index.php/t-60292.html
http://digg.com/technology/Tiger_Direct_uses_False_Advertising_to_get_sales
http://forums.slickdeals.net/showthread.php?t=321865

FTC ruling against tigerdirect in 1999 for their deceptive practices, not honoring warranties, bait and switch tactics etc?

http://www.ftc.gov/os/1999/11/tigerdirectcmp.htm
http://www.ftc.gov/os/1999/11/tigerdirect.do.htm

FTC ruling and penalties against COMPUSA for the very same Perversions & Peccadillos.
http://www.out-law.com/page-5384
http://www.out-law.com/www.ftc.gov/os/caselist/0223278/050311agreecompusa.pdf%20

Where to complaint:

File a Complaint with the Florida Attorney General's Consumer Protection Office

http://www.myfloridalegal.com/ConsumerComplaint.pdf

File a Complaint with the Miami-Dade County's Consumer Services Department

http://www.miamidade.gov/csd/complaint.asp

File a Complaint with the Palm Beach County's Consumer Affairs Division

http://www.pbcgov.com/pubsafety/consumer/html/home.asp

File a Complaint with your state's Attorney General's Office

File a dispute with your credit card company (if the purchase was made by credit card)

Typically, you have 60 days to file a dispute with your credit card company. The credit card company will then initiate a dispute between you and the merchant's bank.

If all else fails, file a dispute at your local Small Claims Court.

Ask Microsoft not to allow TigerDirect to sell Microsoft products:

Bill Benton
Sales Manager
Microsoft
Bill.Benton@microsoft.com
Fax: 425-936-7329

The brains and pockets keeping your money:

Systemax, Inc., ONREBATE.com AND TigerDirect's parent company

brad

Thu, 2007-01-04 19:30

Well, I did get my money already on a product purchased at Fry's but with an onrebate.com rebate. I got the ACK but not the money for a tigerdirect.com product with onrebate rebate and paying for instant payment. As noted, we'll see how that goes.

BTW, I fully expect if you do rebate forms they are going to sell your information. That's why I always use a unique, throw-away email address on rebate forms, and I use a phone number which only goes to voice mail. You can get such things free without too much work. You do have to give them your name and physical address of course, but the direct mail companies already have that info long ago.

I've bought a few things at tigerdirect, no major problems, but it's a small sample.

In general, any time you shop with discount retailers, including just about all online retailers, I expect there to be problems. The only real question is how often the problems occur and how hard the companies work to fix them. If they work hard to fix them, I know they aren't very common -- these are the companies to give your business to.

And of course, sometimes the deals online are so good that you can even have them go sour some of the time and still be ahead, if you are able to handle that mentally.

eBay's reputation system, for all its flaws, generally delivers a good experience there. eBay sellers make mistakes but those with good reputations are always, it seems, ready to jump some hoops to make it better, moreso than larger realtors from what I have seen.

Lee Dembart

Sat, 2007-01-20 10:54

As you correctly note, the rebate regime is set up to allow vendors to advertise a low price for something (with the words "after rebate" in small type) and then make it difficult for buyers to actually get the rebate. I have seen published references to the fact that half the people who buy something that entitles them to a rebate never even take the first step and send in the forms, receipts, UPCs, etc. to get the money. After that, each successive hurdle -- and there is frequently at least one -- makes more and more people drop out.

My success rate in getting rebates is at or near 100%, but only because I'm very dogged about it, even though I know that it's not worth the time and effort to get back the usually relatively small amount of money involved. Still, I don't like to let them get away with it. Most people make the economically smarter decision and give up, which is what the vendors are counting on.

One solution, it seems to me, is to enact legislation requiring that if a price is advertised for a product, that's the price that the customer should pay before leaving the store. That is, give the rebate at the cash register. Then there's no problem about receipts or UPCs or proving that you actually bought it or whatever. If there's a sign that says "$34.95 (after $10 rebate)," you should pay $34.95 when you leave the premises and not have to send in anything and wait six to 10 weeks to get a $10 check.

Of course, that would make the rebate regime less attractive to vendors, because then every purchaser would get the advertised rebate rather than a minority of purchasers.

Given the long history of well-documented complaints about consumer rebates, I'm surprised that there hasn't been more legislative interest in stopping this frequently abusive practice.

brad

Sat, 2007-01-20 14:44

But I don't think the advertising is that big of a reason. Most of the ads I see the print saying "after rebate" is not that small, perhaps California law requires it?

They do want you to think you will get the product for the low price, and of course, much of the time you can, though they know that a large chunk of people will not.

But in fact, rebates would still be used even if everybody who cared got the rebate, and those who did not care did not. That is their actual goal, to offer a lower price to heavily price sensative users and a higher price to those who are not. I think tricking people into believing they will get a rebate when they actually won't follow through perfectly also plays an important role, but it's not essential.

Lee Dembart

Sat, 2007-01-20 22:22

...I just meant a sign in the store. If there's a sign that says $34.95 or $59.95 or whatever, that's the price you should have paid when you leave the store, regardless of whether "after rebate" appears in small type or big type. Never mind all the complicated instructions about what you have to send in and what has to be an original and what can be a copy, and, by the way, you have to go to Kinko's to make copies of everything, and so forth.

And that's all before they start telling you that you made a mistake or they never got what you sent them (which I've been told more than once -- the Post Office appears to be negligent with mailed-in rebate forms). And even after they receive your material and approve it, they say the rebate check will be sent in 10 to 12 weeks. (According to the allrebates website, that's how long I have to wait for my $40 rebate on ZoneAlarm, which I purchased at Fry's in mid-December.) Ten to 12 weeks??!! You get a refund from the IRS quicker than that. What can possibly require 10 to 12 weeks to cut a check and mail it to you after they've approved your rebate?

I understand that the seller is trying to differentiate between buyers who are price conscious and will pursue the rebate -- they get the lower price -- and buyers who either don't care or correctly figure that it's usually not worth the time and trouble -- they pay the higher price.

But even for those who are price motivated, the system is rigged against them. That's the annoying part. Sellers frequently make it difficult to get the rebate, which makes the whole enterprise a kind of bait and switch. Put up a sign that promotes the after-rebate price, but arrange it so that only a minority of buyers actually pay that price.

That should be illegal, and that's why there should be legislation that all rebates be must given at the cash register.

Mike Chittester

Wed, 2007-02-14 19:47

I purchased a Verizon DSL Actiontec Gateway at CircuitCity and sent for my $90.00 rebate to Allrebates and waited 8 weeks like they tell you too! I didn't here anything from them so I called them and they gave me the runaround and they said they never recieved anything? I said that is bullshit and they said it was to late to resubmit because the date had passed? Now I'm really pissed off! What do you think I should do? Thanks Brad!

brad

Wed, 2007-02-14 20:29

The key to rebates is they want people who value their time more than money to not bother jumping through the hoops. The key to dirty rebates is it's not worth the time to try to process a claim when they "forget." Of course all companies are going to lose a few rebates, but indeed there are things to suggest some companies are too forgetful.

You tried the first step, to complain, which often is enough. (They just figure that only a fraction will complain.) If that doesn't work, you can try the attorney general. Alas, if you didn't document what you sent (a very easy way is to take digital camera photos of the whole process) you won't be able to do much. The AG however can notice that a lot of complaints of "didn't get anything" are coming in, too many to be accident, and act on it if so. Not much hope for you.

Anonymous

Fri, 2007-05-11 17:40

If you have bad experiences with a rebate company please file a complaint with the Better Business Bureau so a record may be compiled against these them. It's easy to do and you can do it online.

CMc

Thu, 2007-07-05 10:14

Only did Staples' on-line rebate process offer easy, no-nonsense fast rebate payment.
My experiences with DELL, ON-REBATE, HOME DEPOT, BESTBUY and now COOPERVISION'S Mimai rebate processing center have all been a fight. H.D. actually mailed the rebate in an envelope that looks exactly like any other type of junk mail - there were no identifiers on it. This was obvious to me that they hoped it would have been trashed. It was so obvious that I sent them a letter that if they did not begin using a better envelope identifying Home Depot that I would report it to the attorney general of Florida having kept a copy of the envelope.
But in all the other cases, it is always the same thing - asking for "missing" information that was sent the first time around. The requirements for Best Buy were so exact for a bundled computer/printer package that I wanted to give up and say screw it as I spent over an hour copying and sorting for the Best Buy rebates and then the Manufacturer rebates. But I have learned to keep my own records of what was sent and to note my calender to remind me to follow up.
You have articulated this rebate situation for exactly what it is. The companies that allow this abuse will hopefully get penalized buy the consumer. But praise to STAPLES!

Robert

Wed, 2007-08-15 18:19

By blogging about my negative experience with TigerDirect and OnRebate, a resolution seems to be offered. The story is not complete, but looks as if it will come to a satisfactory end. This is the blog article (be sure to read the comments): wordpress.com article: I was a sucker for a tigerdirect rebate scam

Anonymous

Mon, 2010-02-22 19:39

Years ago when Carly Fiorina was still Prez of H.P. I bought 2 H.P. note books from Comp USA in Fl. About 900.00 ea. (1 for myself and 1 for my mate) oh yeah also a printer.
I filled out the miserable forms accompanied by correct labels from boxes and receipt copies. I was supposed to receive about $200. back. I called, I argued, I never saw a dime.
Madison Ave. should recommend that their clients should never deceive their customers. I don't buy anything with a rebate unless it makes no sense to do so otherwise.
If I lived in Ca. I would not vote for Ms Fiorina.

Add new comment