Mail-in rebate?

Question

i'm not sure if this is the right place to ask the question but here it goes. how does a company benefit from mail-in rebate? why do we pay the money and then send in some paper and get our money back ... how does this benefit the company? there is this flash drive i want to buy from Toshiba and its free after mail-in rebate ... what does Toshiba get out of this? why would they take the money in the first place if they're just gonna send it back?

Answer 1

Most rebates don't get claimed. I've heard only about 10% actually get paid. So you see, they are not giving away their product for free, they are still getting something like 90% of the retail price for their products.

Some reasons why so many rebates end up in the Company's pocket instead of the customer are:
1. People don't save every single receipt, "original" bar codes and other documentation required to file the claim. If you are missing one solitary item, your rebate will be denied.
2. People lose one of the required items, e.g. a receipt, barcode, or other item.
3. Deadlines are not met. For example, you must buy the item between day 1 and day 5,
then file between day 10 and day 15, and
then the post office must deliver it to them by day 20 (which you are powerless to verify, so they will often use this excuse for denying a rebate claim).
4. People get lazy and don't feel it's worth the hassle to file the claim.
5. The outsource & fulfillment companies that handle these claims are rewarded for saving their employer money. If fewer rebates are paid-out, their reward is bigger, so they have a strong incentive to lose rebate claims or "blame the post office".

Everyone has bad personal experiences with rebates. You must be young to not know that yet, but I applaud you for investigating this issue now, rather than after you get burned. Sure, some rebates are worth it, but very few. They are rife with traps to invalidate them so that the buyer/customer never sees a cent of the rebate that they thought was sure thing when they bought a product or service (mistakenly) thinking that they would get some of their money back.
Non-product companies like Allstate Insurance even offer rebates, but they too don't deliver. I joined it when their mailer touted $30 of free gasoline for joining. In spite of what they said, they waited 30 days after I joined to mail me the required form, which was nothing more than a postcard that I then had to send them to apply for a rebate form, a needless step. Then 6 weeks later, the 6 forms (not 1) for 6 separate $5 rebates arrived, each of which was to be used in a small time interval every 45-days. Their strategy is clearly to frustrate the customer so the 6 $30 rebates are never collected. Paying postage 7 times and getting gas receipts during a tight time window, mailed within the same tight time window all make it very difficult to claim the rebate. This one is so complex, I believe that 99% of the new members like me will never see our $30. But marketing departments at these companies don't seem to care, since their "sales are up" at the expense of dis-enfranchising their customer base...a classic case of the company shooting itself in the foot, because one department doesn't communicate or care about other departments in the company.
Believe me, Allstate is not alone in shams like these.
Rebates are a very disrepectful tool that companies use to deceive their customers. They promise rebates, but do all that they can to "not" deliver.

Answer 2

More people buy the product since there is a rebate. Then the supporting products, like inkjets bought after a mail-in printer rebate purchase, increase the overall business. The amount lost on the rebate is nothing compared to the additional sales. Plus most people forget to turn the rebate in, so the company doesn't really loose anything.

Answer 3

Mail-in rebates and manufacturer coupons serve this purpose for the company....
Not everyone sends for the rebate or uses the coupons.
Therefore they only have to lose a certain amount of profit instead of giving the lower price to every customer.
But for the people who do use the coupons or rebates,
they will see the ad and go into the store and purchase their products. That's why stores take them....cashiers hate them too!

Answer 4

When you buy a product which promotes "mail in rebate," a manufacturer of the product is offering you a discount in a form of rebate, but you have to fill in the required info on the rebate request form (usually obtained by a retailer where you bought the product), attach receipt to prove the purchase, and sometimes attach UPC code on the product box. Instructions on how to obtain the rebate is usually listed on the rebate form or included in the product you bought. After you filled out info and attached necessary documents, you mail in all of the paperworks to the address specified on the rebate form. It usually takes 6 weeks or more for them to send you a rebate check.

Answer 5

Some products are give aways. People who own one Toshiba are more likely to own the second. Also they do that for new products in the beginning or simply old products they have to get rid of. By doing rebates, retail stores still makes full profits. (it affects their revenues). Also by stretching the rebate payout time to three months they can record the profit in an earlier fiscal quarter, which boost their earnings and stock price.

Answer 6

The thing with rebates is it takes FOREVER for you to get it. With this little fact obvious to most people the rebate a lot of times doesn't get sent in. I think that helps the company out a lot. Very scandalous.

Answer 7

They benefit because the rebate inspires a lot of people to buy the product, but a good percentage of them will never claim the rebate. They also hope that you will have a good experience with their product and will buy more of their products in the future.

Answer 8

This is a marketing strategy to penetrate a market that the company wants but does not have a foothold in.

Also, they make you fill it out because they know not everyone will fill out the rebate form.

Answer 9

To begin with, a good portion of rebates are never sent for.
It gets your info for a cheap item and they will advertise with you forever.

Answer 10

just do it to get it free. i think they do it because most people dont send to get it so they get the money.