Arnold Kling  

Mail Un-Rebates Revisited

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I hope this got it out of my system.


If mail-in rebates went away, then retailers would still have to earn their profits somehow. Either other shady sales practices would expand, or the retailers would have to raise prices. In my opinion, higher prices without the rebate game would be an improvement, because so much of the cost of the rebate game is administrative overhead and unnecessary paperwork. In that sense, I think that the rebate game constitutes a market failure. Still, even though I find it annoying and offensive, its overall social cost is probably low.

Anyway, for my father's computer, I went to Office Depot. No way I am ever setting foot in a CompUSA store again, unless it's with an IED.

For Discussion. Are mail-in rebates a gimmick that is here to stay?


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CATEGORIES: Business Economics



COMMENTS (14 to date)
Mark Nau writes:

Seems like a valid way to exercise price discrimination. It's just a more elaborate coupon.

Carl writes:

As much as I sympathize with your CompUSA problems, I have to say I've never been denied a rebate. I usually shop at Best Buy; maybe their "rebate receipt" system works better than CompUSA's in terms of correctly deliniating the requirements.

On the whole, I'd rather they just take $40 off the price of the product rather than giving me the hassle of mailing stuff back. But mail-in rebates probably aren't going anywhere soon, and I'll take advantage of them when I can.

Bob Dobalina writes:

For the record, I can vouch for Amazon rebates as well. Their fulfillment process is spelled out very clearly, and I am 6/6 with them.

Don Lloyd writes:

The rebate process breaks up the purchase transaction into two parts.

First, you end up paying a higher price at checkout than the product is worth to you.

Then, with that purchase in the past and a sunk cost, you have to jump through hoops and maintain your attention for weeks to recover an amount of cash that you would have to think twice about if you saw it lying on the sidewalk from your third floor apartment.

Regards, Don

Scott writes:

I wouldn't think twice about going down to get $50 off the street from my third floor apartment if I knew it was free for the taking. (But what is the ethical thing to do? How do you return it to it's rightful owner? Maybe best just to keep it and be part of a valuable lesson to keep a tighter grip on money.)

Scott writes:

AK:

Some of the anger I feel is directed at my fellow consumers. Clearly, a lot of them are falling for the rebate game, or else the retailers would not play it. My guess is that many consumers are unwilling to admit that they are swindled. In fact, I suspect that many of you who claim to get the rebate "every time" are kidding yourselves. I mean, I hope that you're right, because one way to kill the rebate game would be if more consumers played it successfully. However, I worry that some of the very consumers who swear by rebates are in fact losers-in-denial. If so, then they are playing a big part in perpetuating the scam.

Hmmm... Perhaps many people are kidding themselves, or perhaps this makes you feel better about getting ripped off? I don't think it's a personal failing that you had a bad experience, Arnold -- I'm quite sure that they happen more than infrequently and it's because of pressure to meet that guaranteed rate.

For me, I know that I always get the rebate: My Palm Pilot guarantees it -- I set the reminder 8 weeks ahead and then it stays at the top of my list until I get it. I've only had one rebate where I had the hassle of calling the company and had to resubmit something. The others all showed up usually within 8 weeks, sometimes up to 3 or maybe even 4 months for one. If I did miss a rebate, I'd be unhappy, but I factor that chance in to my calculations when deciding to buy the product.

I mentioned this in one of your other threads, but my biggest rebate concern is that they probably use your information for marketing purposes. I read through Best Buy's terms and it appears that you agree to let them annoy you at their leisure.

They ARE a nuisance, but as many others have pointed out, it's a way of getting your purchases subsidized by others.

Paul N writes:

Think of rebates as a progressive tax: people whose time is worth little can afford to fill them out.

Brad Hutchings writes:

I'm sure Arnold meant IUD's -- to keep the rebate people from reproducing. Simple typo, I'm sure. He's excused.

In an extension of Clintonian ethics ("because I could"), they do the rebate game because it works. Fry's was by far the worst at this game. I haven't shopped for big ticket things from there for a long time, but it worked like this. You'd get in a long line and when you got the register, the clerk (who spoke close to zero English) would see that you had something that needed a rebate certificate and offer to go check the rebate board for you. 10 minutes later she'd come back with nothing or the wrong thing and the rebate wouldn't be worth the effort. I always thought of the after-rebate price as the "incessant jerk with time to spare" price, cuz that's what you've gotta be to get it.

Scott writes:

Nice sweeping staments, Paul and Brad. It's great for you guys that your time is worth so much that you can't take 15 minutes to fill out and mail in a form to get $50 or more. And if I'm willing to spend that 15 minutes (and a few more to cash the check), why does that make me an incessant jerk?

Brad Hutchings writes:

Calm down Scott. If you bought rebate items at Fry's at the height of their rebate craze, you'd know what I mean. That's all I was talking about. To even get the right form took planned patience and the manager and often a threat to cancel the whole sale. I am sure most people gave up. I wouldn't give my credit card until all rebate forms were accounted for. I'm sure it made me look like an incessant jerk.

Randy writes:

Rebates are an inconvenience, but I am being compensated. The alternative is higher prices, and I'd rather deal with the inconvenience than pay more. In my opinion, the rebate is quite ingenious. I save money and Dell gets to take advantage of the float. Its win - win. I have not yet had the experience of being scammed on a rebate. If I am, I will simply not do business with that company again. The rebate is not dishonest, the scam is.

Scott writes:

Now I see where you're coming from, Brad. Yeah, I was riled by the comments, probably more so by Paul's implication that my time is worthless.

It's not that I love the rebate process so much as that I'm a cheap bastard and if I can get a TiVo for $50 I'm all for it :-)

Duncan Brown writes:

Staples has a nice online rebate system. It took 4 weeks to get my $10 rebate on a Sandisk USB memory stick.

Duncan

Lawrance George Lux writes:

This Economy is going to go down in flames in the search for Walmart-style pricing. Mail-in rebates are here to stay, but so is HIV. lgl

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