Rebates! Humbug! Bah, Humbug!

After two sobering entries on an important subject, here is a post on one of life’s petty annoyances, rebates. As we head into the Christmas shopping season, one of the many ways we will be manipulated by marketers will be through the use of rebates. If you remember this is nothing more than another ploy to separate a fool from his money you will be OK.

Rebates are an attempt to psychologically manipulate the buyer. The company offering the rebate knows that only 50% of all rebates will actually be paid out. They know that the larger the percentage the more likely it is that the rebate will be cashed. Hence a $1.00 rebate on a $2.00 item is more likely to be cashed than a $1.00 rebate on a $10.00 item. One might question the efficacy of submitting such a rebate, given the value of time that could be spent doing something more useful than filling out a form that could, in a small way, compromise your privacy. The cost of a postage stamp is 44 cents. The cost of an envelope is around a nickel. So what am I really getting?

Of course, I am going to take the big rebates when and if they are offered. I was offered a $50.00 rebate on my printer. After months, I actually received the rebate. When a friend built me a new computer for my home, I submitted something like five rebate forms for some of the pieces parts that went into my new machine. I ultimately received one less rebate than I submitted. I didn’t bother trying to figure out who lost my form or what happened. It simply was not worth the aggravation. Another rebate I received came in the form of a $75.00 prepaid credit card that came from the purchase of a new refrigerator. That was Sears way of offering “free” installation. By the way, I had to pay sales tax on that money. If the installation was really free I would not have paid 6% tax on that $75.00.

By the way, rebates no longer come in the form of checks that can actually be cashed. They are likely to come in the form of stupid prepaid credit cards that can not be turned into cash at your local bank. The companies that issue these things know that it is unlikely that you will ever use all of the money on the card. They get to keep the $2.37 that you forget about. If you receive one of these annoying things, use it quickly and completely on purchases like gasoline or food. Zero it out in one or two purchases. These things are not covered by any of the recent credit card reforms. If it is lost or stolen you have 24 hours to report the theft. Typically, after one year they expire, even if unused. I have read about but not yet received a rebate card that can only be used at one store.

All things considered, rebates are extremely annoying. If possible try to find a comparable price at another store that is not offering a rebate. It is actually possible to find a better price without a rebate than the price with the rebate at a more expensive retailer. If the rebate is offered by the manufacture, a little shopping will give you the best price and the rebate. If you decide to buy an item with a rebate, take care of paperwork quickly, the option to apply for the rebate can expire in 90 days or less. Remember, the people who dream up these schemes are not your friends. Take what is offered when it is offered, only if it makes sense. Do not buy something you do not need just because it is on sale or it comes with a rebate.

Thanks to USA Today for inspiring this rant.

http://www.usatoday.com/money/perfi/tips/2010-11-07-rebate-offers_N.htm?csp=hf