This past weekend, there’s been back and forth argument about rebates over at Consumerist.
I understand that Consumerist is pro-consumers, but when they make blanket statements like, “All together now: rebates are scams.” I feel very irked because that is so far from the truth. I don’t deny that rebates can be fishy and many people have had their rebate rejected, but to make a statement like all rebates are scams just is bad consumer knowledge. I guess my expectations of Consumerist is to educate consumers of the rights and powers and help when big companies and corporations try to bully us, but to mislead consumers I think is very anti-consumers.
So there are very common arguments made that rebates are scams. The most common one being rebates get rejected or denied and the horror stories people talk about when trying to get their rebate. I personally know many people who would not touch rebates anymore because they’ve been denied or rejected one too many times. However, I do have to say, getting a rebate is not as easy as what most people think there is.
First there is the fine print. Be sure to read over the fine print carefully, just like you would on a contract or application. If you think $10 isn’t worth your time to go over the fine print, then don’t bother even doing the rebate as you probably would miss something along the line. Most rebates get rejected because people who file these rebates forgot to include a certain item, the purchase date is outside the valid period, or silly things like forgetting to include your phone number. YES, SOMETIMES REBATE FORMS EXPLICITLY SAY THAT YOU MUST INCLUDE YOUR PHONE NUMBER, although I believe there has been a recently law that says phone numbers are no longer required, though I may be incorrect.
Things I always pay attention to when filing a rebate:
- The dates when the rebate is valid
- The postmark date required
- Stores that the rebate is valid at
- Limit per name/address/household
- Items to include (i.e. receipt, rebate form, UPC)
- Which items can be copies of (i.e. receipts) and which needs to be the original (i.e. UPC)
- How long it should take the rebate to arrive (typically 4-12 weeks)
- Contact information in the event I don’t receive my rebate within the time frame. Usually they’ll include a toll-free number and sometimes a website. Most rebate center websites also provides a way to communicate through e-mail.
Then there’s the rebate center itself. Just like banks, rebate centers also have reputations. If ABC bank offered you a ridiculous interest rate on your deposits or money you borrow from them, you don’t exactly sign the paper immediately without researching more about the bank. Or you wouldn’t fill out all your information on a credit card application just because you were mailed an application. You want to know more about the bank and credit card companies before you actually sign anything over or provide any information. Actually I need to restate that. Many people are actually dumb enough to just sign away their life like that, but MOST smart people research beforehand. I mean can you believe Payday Loans stores are actually thriving?
Another thing you must be sure to do is document everything and make photocopies of everything. I personally scan all my rebates and receipts into my computer, since I don’t like to deal with paper copies, but you should do what you prefer.
Anyway, lets say you do research the rebate company, find them reputable, and fill out the forms and mail it in. Your work’s not done. You still have to keep track, just like you would keep track purchases you made online. When you failed to receive a package, you don’t go screaming that online purchases are all scams. You contact the company and try to figure out what went wrong. Generally you can look up your rebate status online. If you rebate status doesn’t appear online after 6 weeks, it’s time to give the rebate center a call. Sometimes things can get lost in the mail or since these rebates are entered manually by hand, it’s common for things to be entered incorrectly into the system. A simple call can usually can straighten things out and if needed, they’ll ask you to email, fax, or resend the documentation. That’s why documentations and photocopies are important!
Another problem you may encounter is that the status of your rebate shows up as denied/rejected. First double check to make sure the reason you were denied/rejected is not valid. If the reason they rejected your rebate is invalid, you should call them up immediately and sort it out. Generally with a phone call or 2, and maybe some transfers of documentation, your rebate will be validated. You may think this is “a scam” by rejecting your rebate for an invalid reason, but once again, the human component here is the problem. That’s why if a rebate has online filing, I try to do that if possible because it limits the amount of human interaction that may cause any type of error. There have been times where really ridiculous reasons have been provided such as “You did not provide an email address.” when the person received an email about the rejected rebate. However, once again, a phone call should set this straight.
Even if they rejected your rebate due to a valid reason, you might still be able to turn this around. Don’t call and scream at the CSR, but by civilized and respectful as you’re trying to get them to do you a one time favor, which they are usually more than happy to do.
That isn’t to say that I haven’t encountered any rebate problems. If you recall my post 2 months ago: Bait and Switch, many others and I were being scammed by CompUSA. The rebate center there has been reputable and I’ve gotten my rebate from them many times without any problems. However, problems like this can still arise. After many letters sent to our state attorney general and BBB (Better Business Bureau), CompUSA finally gave in and approved everyone’s rebate. This is just one of the very extreme cases and as you can see, with unity, consumers will prevail in the end.
Another common argument against rebates is the fact that if they’re giving rebates, why not give the discount at the checkout counter. Why bother with this whole rebate dance?
There’s actually a couple reasonings for that. The most common one that I hear is that they actually keep your money and make interest off it for the month or two that they hold your money. I personally don’t think this is a very good reasoning and honestly, I don’t think it has much truth behind it. However, I’m throwing it out there because I hear it a lot.
There are 2 main reasons I can think of why rebates are used instead of instant discounts.
- First off, most rebates are provided by the manufacturer and not the retail store you’re purchasing at. Let’s say I bought a calculator at Staples that came with a manufacturer’s rebate. Staples has already paid the calculator manufacturer and when your purchase the calculator from Staples, you’re actually paying money to Staples and not the manufacturer. Lets say the manufacturer wants to move items off the shelf because they’re planning to ship a new model. There they introduce the manufacturer’s rebate because Staples isn’t the one paying you, it’s the manufacturer. One can argue that the manufacturer can give the rebate difference directly back to Staples for each calculator they sell, but I can explain why that’s not done in my next reason. I actually heard that any item purchased from Costco that has a rebate, you’re actually mailing the rebate to Costco, Costco pays you immediately, and Costco in turn gets the rebate money directly from the manufacturer. That’s why Costco is one of my favorite rebate centers that I trust.
- Not everyone files for their rebate. I believe statistically speaking, only 1/3 of all valid rebates get filed and paid, however with more and more high ticket items with large rebates being provided, I heard that number has gone up. But let’s just assume only 1/3 of all rebates are paid out, others either getting rejected for not following directions or because people forgot about it or never knew about it. Anyway, with that in mind, companies can increase rebate amounts to make products more enticing. Lets say that they could lower the calculator by $10 if they gave an immediate discount. $10 off a $200 calculator might entice some, but not much. However, if only 1/3 of all rebates gets paid out, they can provide a $30 rebate, and by this redistribute the savings. In the end, they’ll end up getting about the same amount, but for those who are thorough and get their rebates will get a bigger savings. Those who are lazy and forgetful would have ended up paying full price. With a $30 rebate, it’s more enticing to people than just a $10 discount.
With that said, I end my rant. I think rebates are good, but they’re not for all people. Just like the stock market. People who only invest when everyone’s says its a good time, are people who will lose the most and then end up saying: the stock market is a scam.