why do stores given out rebates as opposed to a straight discount?

Answer 1

Because they know that while the rebate will entice people to buy, most will never get around to sending in for it.

And those procrastinating customers have noone but themselves to blame.

Answer 2

The rebate comes from the manufacturer and not the store usually. In other cases, they offer a rebate instead of a discount, because some people buy the product because of the price and forget to turn in the rebate so the company saves money.

Answer 3

An in-store discount is provided by the store whereas a rebate is offered by the manufacturer. Obviously retailers would rather provide less in-store discounts than manufacturer rebates.

There is such thing as an instant rebate provided by the manufacturer but it is better for them to offer mail-in rebates for the following reasons:

1. They entice people to buy something when they ordinarily wouldn't. A new laptop with a price tag of $1,200 might not appeal to as many people as one for $899 (after rebates). It's an advertising gimmick that works. By the time a consumer realizes he will have to spend more money than he though and wait for his rebate, he will have already viewed and considered the product and is more likely to make the purchase anyway.

2. For many products purchased rebates aren't claimed due to the hassle involved in keeping and copying the receipt, cutting out the UPC and other proofs of purchase, and filling out forms. A lot of rebates for less than $10 go unclaimed thus allowing the manufacturer to keep the profit you thought you were getting back.

3. The process of claiming rebates often takes months to play out which allows manufacturers to keep your money interest-free for a period of time before giving a portion of it back to you.

In reality, rebates can be great to the consumer because they will eventually get some of their money back, but most of the advantages go to the manufacturer which is why that is preferred over instant rebates.

Answer 4

It is pure business logic: because they make the most money that way. Because they know people better than they know themselves. Most people (sad to say), buy things chiefly for EMOTIONAL reasons, not because they logically need them, as a businessperson would. Most people make decisions and flatter themselves, telling themselves they are saving money while spending themselves into the poorhouse. The owner of that store, or that chain of stores, thinks like a businessperson, or else that store won't stay in business very long!! He or she knows very predictably what TINY PERCENTAGE of shoppers are actually going to have the (1) time, the (2) presence of mind, and the (3) record-keeping smarts, to actually redeem the stupid rebate that came with their purchase!! Giving the customer a straight discount, generates little more net sales than giving the customer a "discount after rebate," and yet the AVERAGE price paid by the customer, considered as an aggregate, ends up being very, very close to the higher price without the rebate, since almost no one redeems those. They make the highest net profit per sale this way, selling at the highest average price while sacrificing very little in terms of number of sales compared to if they didn't drop the price at all.

Answer 5

Everybody thinks they'll mail in for a rebate, few actually do. Oddly, the majority of people do not apply for a rebate, especially when doing so requires them to take some affirmative steps. So, rebates are (a) cheaper to the store, and (b) retail shoppers give the store full "credit" for the amount of the rebate.

Answer 6

Because usually you have to send in for the rebate, and many people do not bother to send in for the rebate, so the company does not have to pay it out.

Immediate discounts do not turn into additional sales for the most part so it is not worth giving away the money for free.

Answer 7

The rebates generally come from the manufacturer of the product, not the store itself.

Answer 8

They know that a lot of people won't cash in the rebate, so it doesn't cost them as much money as a discount.

A rebate is a written apology for everyday overpricing.

Answer 9

because the store don't want to have to go through all those rebate coupons and send them in and wait on theiir money, they want theres now u can get urs later. even though i think if they would go ahead and give u the rebate they would get more customers.