Posted on 12/25/2006 9:45:09 PM PST by SmithL
Exactly. Then they could avoid this:
Diffley of Helgeson Enterprises said that such steps are necessary to protect against fraud. The procedure takes several weeks because the form has to be processed by his company, then sent to the manufacturer that funds the payment.
Because it takes that long to open all the envelopes, go through all the paperwork attached, read people's handwriting, process a check request, ets.
The same reason it used to take 8-12 weeks for the IRS to process a refund check. Now it takes 2-3 weeks for the same process when you file your tax return electronically.
Same here. Send all your evidence and supporting information (NO photocopies) to some PO Box in new York.
So I no longer buy things with "after rebate prices". Just shut up, tell me the price, and I will either buy it or not.
Iomega was sued for never paying rebates. It should happen more often.
But...but..the online filing ruins the "The dog ate your paperwork", "Lost in the mail, wink wink", "Detail error in filling out paperwork", "Mail delays caused expiration of offer", and "So Sue Us" mechanisms.
This could ruin EVERYTHING!
You're right. It could!
Because rebates do not exist for the benefit of the consumer. They exist for the benefit of the retailer and/or manufacturer. It allows them to move much more product under the guise of a lower price, knowing that the majority of consumers will never cash in on them.
Let's say it is the Christmas season and I am a manuafacturer of some electronics good. I ship 100,000 units to retailers for the Christmas season with a sticker price of $100. That's $10 million dollars in potential sales.
However, my competitors are selling the same type of product for between $60 and $75.
And let's say that my "break-even" price is $65 per unit, or another way of saying it is that I need to generate $6.5 million in sales to break even and anything above that is profit.
So what I do is offer a $50 rebate to the consumer, making my "sticker price" appear to be $50, which undercuts the competition. Now the consumer still has to pay the $100 sticker price and so my product sells out and I get my $10 million in revenue for a total profit of $3.5 million.
And using the laws of averages, about 20% of consumers send in for their rebate. Well I still get to hang on to the initial revenue for several months before having to pay out the rebates and it only amounts to about $1 million (20,000 units @ $50). That leaves me with a profit of $2.5 million (not including interest I made on that $1 million the first few months).
Now had I offered instant rebate at the register, I only would have seen $5,000,000 in revenue and since my break-even point was $6,500,000, I would have LOST $1.5 million.
You got that right. When I bought this computer I went to the trouble to find which one had the least rebate and bought it.
If a rebate is offered the price is too high to begin with.
I go out of my way to avoid rebates.
Exactly. So, the organized person gets a bigger rebate at the expense of the eternal procrastinators.
My personal deal with rebates is that if I have an item with more than a $10 rebate, I will not let myself use the item or even open it until the rebate forms are filled out and in the mail. It usually takes less than 5 minutes.
Things less than $10, I don't mess with unless I can do it online.
The only "extended warranties" I've ever bought on computers have been the manufacturers' warranty (never buy the store warranty, ESPECIALLY Best Buy!) on laptops with the accidental damage protection. They'll pretty much cover the laptop against anything, short of you taking a hammer to it.
For desktops, I'll go with the standard 3 year P&L manufacturers warranty. Unfortunately, to cut prices, many companies are now making those warranties optional and extra cost on their consumer systems. I've seen some Dells that only ship with a 90 day warranty. Anything more is extra.
Mark
The only reason rebates came about in the early '70's is because of government intervention in the market.
When Nixon put prices freezes into effect, the rebate was retailers way around it to keep free enterprise going.
Chalk another one up for government intervention in the market...
After they became popular retailers found that most didn't follow through with cashing in on rebates so they continued the use of them even though price freezes are long gone to make money off of those rebates not followed through on by customers.
Interest revenue made by the promoter of the rebate in an 8 to 12 week period can be a lot of income depending upon how much the company has sold and the cost of the rebate to them.
Com-Pusa rebates are OK, but it is a major hassle to return defective merchandise to them for exchange or refund. It's worth avoiding them for that reason alone.
A brilliant analysis. One point: This is a manufacturer driven process, but the retailer also makes money via increased sales. However, the retailer is at the head of the line for complaints and non-"fulfillment" of legitimate rebate requests, and the retailer at some point has to decide whether the hassle and abuse of customers during the rebate process is reflective on their store(s). Old saying: one unhappy customer equals ten satisfied ones, as far as repeat business and word of mouth advertising are concerned.
I am working on one right now with Home Depot....so far I know the amount of phone time and copies and mailings it has cost the company and me much more than the rebate...I don't understand why they just don't lower the price...they really are a waste of time and paper....let alone the people involved
Well, that is a different subject, but it's also the reason that I haven't bought hardware from CompUSA in over 5 years.
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