Need explaination regarding the "Rebate" method

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uh.... its $50 they keep in the bank until they submit the check

and sometimes people might not care about the rebate since it takes for ever
 
i believe... they make more money.. because sometimes people forget to make a rebate, which they earn another 50 bucks from you and what not.
 
They gain interest on the money until it is paid back to you. Why do you think rebates take so long to "process"?

In addition, some rebate companies will avoid paying you, or they'll stall as long as possible to gain as much interest as they can. Some others also keep rebate lists of customers which they sell later on to advertisers/spammers (OnRebate does this, I believe).
 
GunSpeed said:
Hi,

Could someone explain to me what do companies gain from the rebate ?
as an example here:
http://www.zipzoomfly.com/rebate/321102_010107.pdf

The only reason I can think of is locating your place after conforming it thru you, and then spam you with offers to your mailbox...etc

Anything else? Or am I correct here at all?
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A lot of people have sort of hit the nail on the head.

I'll give you a good example. 1 GB SecureDigital card @ buy.com is $45 - $45.00 rebate.

(i.e. $0.00)

Now, there is NO WAY IN HELL that card is worth $45. $20 at the most.

for the 35% of people who don't even bother to send in the rebate, they make 225% more than the value of the product. So, profit is up. They also "discredit" a bunch of rebates, so they make that additional profit, too

Secondly, because all these people are buying usually OVERpriced merchandise, and the companies are keeping it for 6 months, that is the "free loan" as they say. $45,000 (say, selling 1000 units @ $45) = quite a nice bit of interest earnings.

Thirdly, companies report gross sales to investors, so, when you sell 1000 memory cards @ $45, it looks like you made $45,000 in sales (you can report that to your investors)

Lastly, a lot of times a rebate item also encourages the purchase of a non rebate item.
When I bought my 2GB microSD cards, I also needed something to use them in! wether that be an mp3 player, cell phone, digital camera. I may have purchased that PREVIOUSLY, or I might be purchasing it after the fact.




Oh, and this ain't a hot deal.
 
I believe the main reason rebates are used is because they are so infrequently submitted by customers. I heard somewhere that Tivo is still in business because 2-3 Christmas' ago they gave out huge rebates to encourage people to buy and then only 2-3% of people actually submitted them.
 
CyberDeus-RagDoll said:
A lot of people have sort of hit the nail on the head.

I'll give you a good example. 1 GB SecureDigital card @ buy.com is $45 - $45.00 rebate.

(i.e. $0.00)

Now, there is NO WAY IN HELL that card is worth $45. $20 at the most.

for the 35% of people who don't even bother to send in the rebate, they make 225% more than the value of the product. So, profit is up. They also "discredit" a bunch of rebates, so they make that additional profit, too

Secondly, because all these people are buying usually OVERpriced merchandise, and the companies are keeping it for 6 months, that is the "free loan" as they say. $45,000 (say, selling 1000 units @ $45) = quite a nice bit of interest earnings.

Thirdly, companies report gross sales to investors, so, when you sell 1000 memory cards @ $45, it looks like you made $45,000 in sales (you can report that to your investors)

Lastly, a lot of times a rebate item also encourages the purchase of a non rebate item.
When I bought my 2GB microSD cards, I also needed something to use them in! wether that be an mp3 player, cell phone, digital camera. I may have purchased that PREVIOUSLY, or I might be purchasing it after the fact.
Click to expand...

Most succinctly put ! All has to do with economics and the time value of money.
 
I've been a frequent rebate user (~10 per year) for years. I always fotocopy all the required materials and stick them in a folder just to be safe, and I try to get the stuff in the mail ASAP so that I won't forget.

Lately I've been noticing a new tactic on the part of companies. In past years I've had a couple of rebates denied, and I had to really argue, or quote serial numbers, or send stuff in to prove I was owed the money. This year several of my rebates get 'denied', some notifying me with a postcard or email, others not notifying me at all. When I called the 1800 number to complain, they all immeadiatly said they've made an error and are sending me the money, no questions asked. This seems dirty... I wonder if anyone else has noticed this changed.
 
^^ Well said.

It's a disturbing new tactic that companies like Microcenter love to use.

In my opinion, it's a poor way to conduct business and I try not to buy deals that require rebates.

The last rebate I had was for one of my X1900s and it took 3 months for the rebate to come back.

That's a 3 month loan in my opinion.
 
All the above scenarios are true to an extent. Quite frankly the interest part is minute at best. The most common reasons they do this are:

1. To get you to buy more items. This is a bate tactic used by physical stores for years on sale items anyways.

2. Most online companies are also wholesale distributors with their own shipping departments that make money on everything shipped. Do you really think an SD card costs around $8 to ship?

3. Many companies (we'll use Ultra as an example) try to get brand recognition for market share. Dell does this very aggressively and even though their products have really gone down the toilet, most of the pc users can barely do more then play Solitaire on their system and will continue to buy what they "know". So, companies like Ultra get companies like Tigerdirect.com to "give" their product away and make money on the ones who don't go through the hassle.

4. Some companies (again we'll use Ultra) will give companies like Tigerdirect.com a special deal for buying a large quantity of one product if they agree to buy a large quantity of a promo item. The company such as Ultra marks up the other product a bit to make their money; Tigerdirect.com gets a good rate on both; They both make money; and you are left trying to figure out why anyone would give it away and make money.

There are many other scenarios and they are rarely as simple as the simplistic conception of "the can't make money off of giving it away" idea.
 
Apallohadas said:
In my opinion, it's a poor way to conduct business and I try not to buy deals that require rebates.
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I'm the same way now. I am of the opinion that "rebate" deals are no longer worth pursuing. Why? Here are some reasons:

1) It's a hassle.
2) Even if I do everything right, the rebate processing company may still make it difficult.
3) It takes forever for the rebate to get back.
4) Most things sold with a rebate either a) are inexpensive in the base case (see above example about the 1GB flash card) or b) can be found (or a very close equivalent can be found) for the same price without having to send in a rebate.
 
I sent in a rebate to buy.com for my Logitech G7 mouse a LONG time ago, still haven't heard anything about it. Rebates need to become history, it's just a dirty scam.
 
They BS you till u get pissed off and say never mind so they end making money. But i take pictures so i always win lol.
 
The soyo motherboard debacle is the reason I will never buy things with a rebate again.
 
To : “KINGSTON/BUY.COM” For : 2GB MINI-SD upc # 7 – 40617 – 09314 - 8

According to your rebate terms, there is a limit of one rebate award of $16 on the purchase of this item, “2GB MINI-SD”. I have purchased one of these cards from BUY.com. I am including the receipt, the UPC, the rebate form, and this letter, all in one envelope. My BUY.com invoice, order # XXXXXXXX, is dated November 09, 2006, which DOES fall between the 10/29/2006 and 11/11/2006 purchase window.

My contact information (which is on the rebate form, and invoice, but in case you say it can’t be read) is:

Name : XXXXXXX XXXXXX
Address : XX XXXXXXXXXXXXXX
City : XXXXXXXXX XXXXXX State: XX Zip :XXXXX-XXXX
email : [email protected]
Phone : XXX-XXX-XXXX

This MATCHES perfectly the contact information on my invoice, as well. Additionally, this item “must be mailed within 30 days of purchase” I am mailing this item on November 27th, 2006. That is 18 days from the date of purchase, This is over a WEEK prior to the 12/09/2006 deadline

Finally, I am scanning a copy of the attached UPC/SKU code from the packaging showing them stapled to the rebate forms. I expect, a rebate in the form of $16.00 check

As you can probably tell, I keep a log of ALL transactions, and have had much experience with rebate companies such as yourself. EVERYTHING is documented, including the purchase dates, shipping dates, product numbers, et. al.

Sincerely,

XXXXXX XXXXXX
Date : XX/XX/XXXX
Phone : (XXX)-XXX-XXXX
Click to expand...

Then, you scan the UPC with it stapled to the receipt, You scan the rebate form which you filled out legibly. You highlight/circle all pertinent dates. You scan the envelope you put everything in, with a stamp attached (or, if you are fortunate enough, like me, to have a postage machine, you scan it with the DATE STAMP on the envelope)


I no longer fail to get rebates.
My last failed rebate was the one EVERYONE got screwed on, the Soyo P54C for $90 @ newegg
 
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