Rebates?? Exactly, ................why?

Factual Questions
1

Rebates?
Money back via mail after buying a product at full price.
Money back after buying a product at full price, taken off in perks or accessories after the sale.
Why not lower the selling price in the first place?

Manufacturers rebate: The product builder gives you money back after buying said product from the seller, who bought it from them at the normal wholesale price and tagged on the usual retail markup.

What’s the purpose of this somewhat lengthy sale scheme? Why not just take the rebate off of the front end of the deal, without having to get all complicated with it or relying on mailings.

Like Computer for sale at $2500. $1500 after MFGs mail in rebate.

What? Gimme the $1000 deduction now and I’ll buy the darn thing! I might not have $2500 sitting around but I might have $1500! So, the computer seller looses a sale.

Is it just me or is this about as mindless as leasing a car?
What incentives do the sellers get to confuse/lie/mislead the public?

So I go buy this $14,000 car, see? It has a $4,000 mfg rebate, see? I plunk down $5,000, see? Finance the rest, then send in papers to the maker and in a few weeks they send me a check for $4,000 or take it off of my loan.

Is it just me or did I just get screwed on loan interest here? Don’t most car dealers get kickbacks from finance companies they use? The more they finance, the better for them?

Maybe, but how about all of those other rebates one finds all over the place?

Explain those please?

It’s getting to the point that when you go shopping for anything above groceries, you might want to pack along a lawyer well versed in business law.

Even then, I wonder. (Walmart – Butterfinger Minis – $2.98. Same store, 2 days later, all BFs move to Halloween displays, price? $3.98. Same store, 2 days later. BFs still in Halloween display, but now $2.98. ???)

2

Rebates aren’t supposed to benefit the consumer, or even make sense- they’re for boosting profits :slight_smile:

Most people don’t follow through on rebates, even when they start out intending to. Sure, they’ll lose a few sales by not making the price lower up front, but overall they’ll be better off because more people will pay the normal price, intend to get the rebate, then not follow through.

It also lets you advertise at a low price (“price includes rebate”) and know that not everyone will get the low price, because they don’t do the rebate. If you lower the price up front, EVERYONE gets the low price, instead of just some -> lower profits.

It’s the same type of consumer logic in setting prices at $19.99 instead of $20. Bottom line is: more profits.

Arjuna34

3

Most car rebates can be signed over as part of the down payment, which is why car manufacturers have rebates. It isn’t everybody that can afford a $50,000 vehicle. So they put on a $3000 rebate so you don’t have to come up with as much money down. If they just discounted the car that $3000 you would have to come up with more money out of your pocket and as such, wouldn’t be able to buy the car as easily.
As for the other type of rebates, like computers, I wish they would do the same as the car makers. I guess it’s a game they play. Buy now and get $500.00 back in the mail in six months. :confused:

4

I always thought it was a ploy for companies to keep their quarterly sales figures higher, to show their stockholders. Even though the net price you pay is lower after the rebate, they can still show much higher sales figures up front (and keep quiet about the rebates).

5

cheezit I only see car rebates if you buy financing. They make a lot of it back in interest.

Wouldn’t it dumb to take a rebate on a car? Suppose the car is $50,000 & you get a rebate of $5000 =$45,000.

Then suppose you didn’t take the rebate but dickered the saleswoman instead & got the price to only $43,000?

6

I used to work for a software company that offered a rebate that was actually a tiny bit more than the sale price. Yep, that’s right you could actually make a little money by buying it. They were at least smart enough to limit it to one per person. They were totally counting on people not sending in for the rebate. Well, I guess at some point people get motivated because they had something like a 90% rate of people asking for the rebate. They lost a ton of money on that deal. It probably doesn’t need to be said but the company no longer exists.

7

I am generally against government intervention but this is a case where I would pass a law because this practice borders on being a scam as many people never get their rebates.

I would pass a law that if a mail-in rebate is offered, the vendor must honor it there and then and later can be reimbursed by the manufacturer.

Too many consumers never see their money again

8

Another reason for rebates is to get information from the consumer about where/why/how product was bought, and to gather other info in general. For example, a recent CD game I bought asked me what I’d like to see in future games, what other games and game systems I had bought, what gaming mags I read, etc. IOW, they give me five bucks and I tell them valuable marketing info.

Of course, I could make the whole thing up, but it benefits me more to be honest and, to be frank, five bucks to a company like Sierra ain’t much.

9

Those are called “coupons”.

10

Ok then:

1 Whereas, we the people are sick
2 of having to wait for weeks
3 and sometimes not getting the rebate
4 Be it enacted that
5 mail-in rebates
6 shall be
7 treated as
8 Coupons.
9 and such manufacturers
10 who do not like this
11 can go screw themselves.

You like it? :slight_smile:

11

Dickered the saleswoman and get 7k off? I want the name of that dealership - I’m buying my next car there.
Oh, he said dickered. Never mind.

12

Other reasons for rebates vs. lowering the price – it doesn’t affect the dealer’s profit margins and it ensures that the dealer passes the reduction along to the consumer.

With a rebate, the retailer makes as much money on the sale as if the item had sold at full price, so the retailer is going to be happy to feature the rebates.

In addition, if the manufacturer just cut prices to the retailer, some retailers would keep the price where it was and pocket the difference. This happened a few years ago when one of the cereal companies (General Mills?) cut back their prices, but the lower price never showed up on grocery store shelves. The result is that sales are not boosted.

13

retsin2000, you are right, most people, 80% ? don’t mail in the rebate. Aren’t those 50 cent rebates dumb? You pay for postage & get so little back.

Another reason for having rebates is they suck all your personal information from the rebate thing, sell it to more comps to mail you more crap.

14

That is an excellent impersonation of Annie-X-mas and/or Anniz.

15

Actually it was pepperlandgirl who was posting bills like that. I thought I’d start drafting my own bills that i’d like to see enacted. :slight_smile:

16

I think RealityChuck is on the right track. I would add to that by suggesting that the manufacturer is wanting to cut prices on products that have already been sold wholesale to the retailer. Rather that send a large refund for the lot to the retailer who may or may not pass it on, the consumer is paid directly only when an item is purchased.

17

I thought some manufacturers set strict limits on some of their products selling prices? Like they’d give the retailer X percentage of a discount so long as they did not sell them above Y dollars each.

That, I did find out, does not hold true in grocery stores. When the price of beef dropped after the great beef crunch (started by the government, thank you very much)! most places did not lower their retail prices accordingly.

18

Having done marketing for computer companies large and small over 25 years, one of the principals at work with a rebate is the ‘breakage’ or the fact: FEW OF THEM GET REDEEMED.

First, let me separate auto rebates from most consumer goods. The car companies use it as a limited-time discount and they are redeemed in large percentages because of the way the dealer system works.

However, most consumer goods have only 1% to 3% of the rebates redeemed. People lose the receipts; lose the rebate forms; forget or simply don’t care. So the rebate is just an attention-getting scheme: one where the price appears ‘lower’ than it really is for most buyers.

In a rebate scheme involving $50 on a $125 software product, we planned for 5% of the rebates to be used. The actual numbers were less than 2%. Yet sales increased during the promotion period by 20% - 25%.

Realizing this, here’s how we handle rebates in this household:

  • read the terms & conditions before you consider the product
  • don’t consider anything below $4 because your time and postage won’t be worth the effort
  • make sure that you leave the store with rebate form and extra receipt (if needed)
  • mail the rebate immediately upon arriving home

By the way, retailers are generally neutral about rebates. They realize that they’re a promotional vehicle that works. They don’t like anything administered at the cash register (it slows the checkout process down); they don’t really like handling the forms – but you can put the rebate forms on the package.

19

I work for an automobile dealership and I agree with cheezit. Dealers offer the incentive/rebates for people to use as a down payment. As a matter of fact we dont even tell the finance company what it is we put the money as cash down. Sometimes if the customer already had the cash to pay for the car they would just do the paperwork for the rebate. But, 99% of the time it is just a means for people who have very little down to get a boost on the downpayment therefore lowering the amount of interest they would have to pay on a loan. It also makes the finance company think that they are giving more than they really are inturn they are easier to finance.