Are you occasionally frustrated by the rules and procedures retailers and manufacturers implement for redemption of their mail-in rebates? Do you occasionally throw away the packaging with the necessary UPC symbol, misplace the rebate form or receipt, or procrastinate too long and miss the submission deadline? All of this work and then you must wait many weeks for your rebate to be processed and returned. When it is returned, it may be in the form of a store gift card or a check that must be cashed fairly quickly.
A recent article by Jayne O'Donnell, though, reports on a promising trend. Apparently, a few years ago, nearly a third of Black Friday promotions involved mail-in rebates. So far, this year, however, that number is only about 10%. Some consumers have complained that mail-in rebates are such a hassle that they are no longer viewed as a viable means of saving on purchases. For instance, gift givers cannot cut "proof of purchase" codes or symbols off of the packaging or their recipient can no longer return the gift.
Because of increasing complaints, some retailers, such as Best Buy, have eliminated mail-in rebates all together. As instant rebates are much more popular with consumers because they do not suffer many of the same disadvantages of the mail-in variety, they represent a popular alternative. Some locales have encouraged this by enacting laws that require discounts and rebates be made available at check-out. Some retailers and manufacturers, although maintaining the practice of mail-in rebates have taken steps to either enable online submission or provide paperwork in a manner that simplifies the mail-in submission. Merchants like Kohls are advertising the before-rebate price, then the possible savings, as opposed to just promoting the after-rebate price.
Mail-in rebates can still be an attractive means of saving money. As a consumer, though, you should understand the psychology behind them and why they became such a popular marketing tool. Associated Press writer Candice Choi provides some guidance about rebates and how you should evaluate them in a recent article.
Although this is obvious, rebates only benefit those that actually redeem them. Apparently, however, only about half of those eligible for the rebate will actually receive it. From a marketing viewpoint, then, companies must only give a fraction of their customers the advertised discount. While in reality, a dollar is a dollar, rebate redemption rates are tightly coupled to perceived value. For instance, many more people would submit for a $1 rebate on a $2 purchase than for a $1 rebate on a $100 purchase. Similarly, convenient submission procedures (e.g., customer is handed the necessary materials at the sales register) increase redemption rates over those that inflict more hassle for the consumer (e.g., shopper has to tear a rebate slip off of a store shelf).
Consumers should also realize that rebates are typically a purely psychological marketing strategy. While demand for merchandise typically drives the discounts offered and the ultimate price that a merchant is able to charge, rebates are often offered immediately upon release of a new product.
Rebates may not necessarily be issued as cash. Stores often like to offer gift cards because they give shoppers a reason to return and buy more. Even if the rebate is returned as a Visa, MasterCard or American Express pre-paid card that is accepted almost everywhere, rebate cards are not subject to the new federal regulations that limit inactivity fees and expiration dates on gift cards. Not all rebate cards can be cashed or deposited, but if yours can, taking it to your bank to cash or deposit it might be the safest option to ensure that you use its entire value.
With the holiday season back upon us, even though the mail-in rebate trend seems to be reversing somewhat, retailers and manufacturers will continue using rebates to entice consumers. This is not always bad, but shoppers should evaluate these rebates realistically against other alternatives. Non-rebate pricing at other stores may or may not compare favorably. If it's a manufacturer offering the rebate, you can likely mail away for the discount no matter who you purchase from. Therefore, shopping around may provide the combination of best price in addition to rebate. Regardless, my advice would be that you evaluate rebates with respect to their advantage to you and take care not to fall into any potential temptations, tricks, or traps that might be associated with them.