what is logic in mail-in-rebates?

Answer 1

A hundred dollar item, a fifty dollar rebate. How many rebates are paid? Assume thirty percent do not get sent in and the rebate company fails to send out the rest. How many will pursue the rebate company to get their fifty dollars? First you have to wait two to eight weeks before you can complain and then in two more months you have forgotten about it and they win. I do not even consider rebates any more unless they are over a hundred dollars.

Answer 2

I believe that it is designed to encourage buying. Someone sees the rebate and makes the purchase thinking they will save. However, most consumers do not mail in the rebates...they forget, or its too much of a hassel, etc. So in the end, the manufacturer wins... those who dont send in rebates far outweigh those who do. They make more money even though they payout a few rebates.

Answer 3

It's a company's incentive to make customers buy a product, knowing full well that a significant number of people will: a) forget to send in the rebate form, b) lose/misplace the form, or c) try to claim the rebate, after the form has expired. Consequently, the company puts out the dangling carrot, yet takes a limited hit on actual dollars paid out.

Answer 4

First of all, not everyone mails in for the rebates, so the company saves money that way. Second, even with the rebate, they will still make money off of the product. Third, so they have your address so they can mail you junk mail.