Friday, April 17, 2009

Rip-Offs and Rebates

A few years back when the “rebate” was conceived, I figured it was a pretty desperate marketing ploy to (try) to fool consumers. The idea was to imply that purchasers would get cold hard cash-on-the-barrel-head back if you bought their product. Back then I believed people were smarter than I believe they are now. I assumed everyone would see through the ruse immediately – the retailer upping the price of their product and simply giving them some of their own money back. Wrong!!! Consumers (some of them even good friends of mine) were completely taken-in. Rebates worked… all too well, as it would turn out.

Then it got worse: The “mail-in” rebate – advertise to the consumer they will actually pay a lower price for the product after receiving a rebate in the mail. All the consumer has to do is fill out a form (don’t we all love to fill out forms) and mail it in along with the (original) receipt and the cardboard box the crap came in to the company… then wait. What a scam!

The numbers are foggy, but of the people who decide to buy a product based on the promise of receiving a rebate, anywhere between only 2% to 60% ever actually receive their rebate. The psychology strikes of genius - Most people never bother to complete the paperwork or send it in. This means that, even though you bought the item thinking you would pay less, most companies instead end up pocketing the money they promised to rebate to you.

I was taken-in in also; I had the misfortune to believe I would get a rebate when I purchased a pair of Motorola walkie-talkies. I even sent in the rebate materials via certified mail as proof that they received it. I spent more time and money in phone calls and letters... but I never received my rebate. I mean “never”... as in: I will never buy anything from Motorola again.

Another scam I see a lot recently with car companies is the Manufacturers Suggested Retail Price (MSRP). Of course the manufacturer is going to set the retail price very high so it will appear as though they are offering significant discounts. We visited a local furniture manufacturer’s showroom in town once – Inquiring about the price of a table, my wife asked about the convoluted price structure on the sales tag. The sales person implied what a great deal she would get if she purchased the item for the discount price below MSRP. “But aren’t YOU the manufacturer”, she asked? The sales person stammered a bit. Generally, you could also refer to the MSRP as actually the JU (Jacked-Up) price. After your “discount”, you end up paying the full retail price you would have paid for the thing anyway.

Rebates are studies of the intricacies of contract law; and there are all kinds of laws covering rebates in marketing and sales... all of them designed to protect the company, not the consumer. I would be nice to see that changed… say, having the company that stiffs you end up owing you TWO TIMES the amount of the rebate if they don’t get it to you within 60 days - maybe keep that penalty multiplying for every month the rebate is outstanding.

Recently OfficeMax has completely done away with offering mail-in rebates, primarily due to so many customer complaints, and is opting instead for instant rebates paid at the time of purchase. Your best protection is to either avoid buying products that offer rebates altogether or choose only in-store rebates. Until then, most consumer morons will continue to believe that the retailer is relinquishing some of their hard-earned profit because they are so damn happy you bought from them. But don't take my word for it... Send me crisp $20 bill and I will send you a $10 rebate! How can you lose?


Frank Moricca said...

Cooper Tires has a rebate on a set of 4 tires through the end of April. go to for details but I know people are getting their checks in less than four weeks. and if you give them your email, you can check the status - a very friendly promotion

Robert the Skeptic said...

Thanks for the comment, and the tip, Frank. But as you can imagine... once bitten, twice shy!

I know companies LOVE to have people's e-mail addresses - spam is soooo much cheaper than junk mail.

Rachel Noy said...

I've been filling out rebate forms on Miele washing machines this morning!

We do actually get money back, and so does the customer, but they're a nice company. Wouldn't do it with anyone else. I've been bitten by rubbish companies at work too, most of the time it's not worth the hassle.

I hope you save many people a headache and money loss with this post!

Rachel said...

For the most part youre absolutely right. My first smart phone from tmobile i had to send out 3 separate rebate forms, all after 9 months of owning the phone. I never sent the forms because by then it was "whatever!" It just wasnt a priority anymore.

However, sprint did have a good rebate program and I got my rebate in 6 weeks.

kara said...

i got one from verizon that works like a debit card. only a bunch of places won't take it. stupid.

Robert the Skeptic said...

Rachel(s) - Spot on! Most of these outfits depend on it being too much of a hassle to pursue. Ka-ching!

Kara - Debit card! Maybe you can use it for ID.

Most firms use private "rebate fulfillment" companies to handle the rebates. Just Googling the above phrase brought up a story about a lawsuit against "Young America, Inc.".. interesting, the VERY SAME company that bilked me outta my Motorola walkie-talkie rebate. God help 'em when they try to collect!