Jan 12, 2009

Maybe you've wondered why retailers offer rebates on products rather than simply discounting the price at the point of sale? The always cynical Merle Wayne Sneed has long suspected that it is because sellers know that most people are attracted by the possibility of a rebate and most people won't file for them, leaving a lot of free money for the sellers and manufacturers. There was a story about rebates in yesterday's Hooterville Daily Dish. The article said that about 60% of people who are entitled to a rebate, never claim it. That's a lot of lost opportunity. Manufacturers use what are called rebate-fulfillment houses to process their rebates for them. These fulfillers are simply middlemen who collect the rebate information from the consumer and collect the money from the manufacturer. They validate the rebates and send out the checks. All for a fee. Yesterday's article intimated that manufacturers instruct their middlemen to automatically deny a certain number of rebates, in the hope that the consumer will simply give up. Apparently as many as half do. That prelude brings me to my story of the day, involving a rebate submission I made on the Ace Hardware website. Ace is more progressive than most retailers when it comes to rebate submissions. If you have an Ace Rewards Card, their loyalty program, you can submit a rebate on line, without having to fill out any forms or mail any proof of purchase. You simply pick the product you bought from a list of rebate-eligible purchases and the system verifies that you purchased it, using your card records. I bought a portable DVD player at Thanksgiving, which had a $30 rebate. I immediately applied for the rebate and the Ace system validated it and told me that a check should arrive within six weeks. A few days ago I got a postcard from an outfit in Miami telling me that my submission was invalid and that I should send copies of my receipt and the product barcode to them by January 28th, in order for it to be reconsidered. They also provided a phone number for me to call with questions. When I called them this morning, the agent asked for my tracking number and when I provided it, she said my rebate would arrive within 15 days. No explanation, no arguing, no nothing. It left me with the suspicion that the entire affair has been a ruse to see if I would just give up, like so many must do. As I'm fond of saying, bastards! Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong, sometimes just full of it, but always judgmental and cranky

9 comments:

Kurt said...

I suspect it also helps with sales revenue figures. I'm making this up, but they probably use the pre-rebates total as their revenue total, and then put the rebates in another column (or in another quarter).

mouse (aka kimy) said...

sneaky bastards indeed! but yeah your 30 bucks should be arriving soon.

I am quite cynical myself about rebates and unfortunately more than once I've missed out and forgotten to send in my rebate form (with ALL the accompanying proof of purchase) by the deadline. just hate when that happens.

thanks for the info - found the 60% figure interesting, guess it's higher than I would have predicted(by 10%)

tut-tut said...

Yes; I have a friend who worked for American Express years ago. The same principle applies for Travelers Checks; if the purchaser didn't use them all up on the trip, they, by a rather large percentage, were never cashed. AmEx counted on this as part of its revenues. Go figure.

D is now deeply involved with many phone calls to Sears concerning a rebate for the delivery of our freezer right after Thanksgiving.

Barbara said...

Rebates are in a way like those gift certificates that sit unused in my drawer. You have to make a little effort to cash in and some people never get around to it. Cheap money in the bank for someone else!

Glad you are getting your $30. Maybe it will slightly offset the Visa loss.

Anonymous said...

Loyalty. It seems like it only works one way: Loyal Customers.

Reya Mellicker said...

Insurance companies do the same thing.

My guess is that with the economy tanking, people might suddenly get more interested in applying for the rebates. do you think?

Mariana said...

Hi! I hope you get your Visa money back! I love your blog and I've given it the Dardos award. Thanks!

http://gatochy.blogspot.com/2009/01/smashing-200.html

alphabet soup said...

There are many, many devious ways of companies making money.
Customer inertia has to be a sure winner.
Ms Soup

bella rum said...

Back in the day, we were responsible for sending our claim to our insurance company. They repeatedly claimed they had not received our claim. It happened so often that we started making three copies - send one - wait - send another - wait - and send the third one. I know it was their policy. They counted on people giving up.