Rebates: Mailing It In

Discussion
May 16, 2007

By Tom Ryan

Consumers have long had a love-hate relationship with rebates. Although they love the deals, they hate the paperwork, the wait, and all the hoops required to actually get the promised rebate check.

In its recent Cranky Consumer column, testers for The Wall Street Journal took part in five rebate programs and found that only one – a T-Mobile offer – was hassle-free.

“We learned that terrific deals exist for shoppers who have patience for paperwork and follow-up calls,” said the author Suzanne Barlyn. “But even the most careful shoppers may inadvertently bungle requirements, such as cutting out the Universal Product Code instead of the proof of purchase.”

The testers found they couldn’t avoid missing filing deadlines on some or botching paperwork on others – common issues that lead to rejected rebate checks. The bigger headache appears to be the Kafkaesque procedure to inquire about missing refunds.

“We often waited months for a response and had to check the status via phone and online,” said Ms. Barlyn. “Postcards with confusing messages denying our rebates arrived by mail.”

Retailers and manufacturers have struggled with mail-in rebates. While rebates can boost sales, they also risk disappointing or even angering customers who can feel scammed when the check never arrives.

“Rebates have generated such negative feedback from consumers that they were beginning to drag down the reputation of the retailers,” Joe Ridout, spokesman for Consumer Action, a national nonprofit education and advocacy group based in San Francisco, told The Press Democrat in Santa Rosa, California.

Two years ago, Best Buy phased out mail-in-rebate programs and instead offers instant rebates at the cash register. The programs were eliminated even after Best Buy tried several initiatives to make them more consumer-friendly, including paying rebates with gift cards and setting up a way to track rebates online. But shoppers were still frustrated having to wait weeks for their savings to arrive.

“We did it because customers hate them,” Best Buy spokeswoman Dawn Bryant told The Press Democrat. “Customers are looking for good value, and value doesn’t always mean price.”

Competitors, such as Circuit City, continue to offer rebates from manufacturers, but have taken steps to try to make the process more consumer-friendly, such as having technicians fill out all the rebate forms while installing computers or other devices in customers’ homes.

But some retailers will have to do more to convince the Journal’s testers of their value.

“In the future, we’ll use delivery confirmation for rebates over $50,” Ms. Barlyn wrote. “We’ll check our mail carefully because rebate checks often resemble junk mail. And we’ll often pass on rebate deals and comparison-shop on the internet instead.”

Discussion Questions: Are rebates still a viable marketing tactic? What can be done to make them less of a nuisance to consumers and more effective for marketers?

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18 Comments on "Rebates: Mailing It In"


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Odonna Mathews
Guest
Odonna Mathews
15 years 10 days ago

I have always felt that rebates were a “come on” to enable a retailer to make a “sale” look like a price reduction, even when it really isn’t. Consumers have gotten too smart for that.

Rebates are more trouble than they are worth. The forms are hard to find at point of purchase, and often cumbersome to fill out. Rebates seem to take forever to be processed, it they come at all. Consumers especially enjoy reading all the fine print in the rebate when they get home, only to find out that an original receipt is required for each item on rebate.

Why not just offer a lower price instead of all this hassle?

John Meyer
Guest
John Meyer
15 years 10 days ago
Rebates work. Period. The promise of free merchandise still holds a fanatical appeal to a large group of consumers. For the price of a stamp, a customer will buy something new that they ordinarily would not need or use. Walgreens has the “EasySaver” program where the customer only has to fill out one form and mail it in monthly with receipts. An end of aisle display is maintained in the stores to support the program. The rebates come consolidated on a check or they can be put on a store giftcard. If the giftcard option is chosen, a bonus is paid above the original rebate amounts. The same giftcard can be used every month–allowing the total program savings to be easily seen. Another rebate option advertised at Walgreens is instant coupons which print up at the register through dedicated Catalina coupon printers. This is an attempt at instant gratification. When a customer buys a certain amount of products a “cash” coupon prints which is good for future purchases in the store. Unilever and P&G are… Read more »
Jeffery M. Joyner
Guest
Jeffery M. Joyner
15 years 10 days ago
Let’s be up front about this. There are many who delay payments on rebates as a strategy. There are actually quite a few in this industry that are accomplished at doing so. This does not have to be the case. There are many new technologies that will eliminate the concerns consumers have with rebates. Alternatives such as pre-loaded debit cards, fast pay on rebates, store owners taking more responsibility to fill in necessary forms and mobile messaging to provide rewards are already reality. There exist right now methods to communicate directly to the consumer what process her rebate is in. Don’t you think consumers would appreciate that? Perhaps they would even reward that kind of forward thinking. Rebates can be a great source of promotion. They can provide the consumer with added reason to shop one outlet over another. However the manager of the rebate program must be in it to create consumer satisfaction, not just added income. This is a subject that is worthy of debate. I would love the opportunity to do so.… Read more »
Ian Percy
Guest
15 years 10 days ago

My assumption has always been that making it difficult for consumers to claim a rebate was a deliberate strategy. It’s like gift certificates–retailers hope customers lose or forget about them because then it’s free money. I’ve seen nothing that would contradict that cynicism. Surely we’re not just now realizing that cutting out this, mailing in that and generally jumping through various hoops is a pain in the butt. The strategy is to have the appearance of a good deal so the purchase is made but then building in just enough nuisance factor that the rebate offer won’t be acted on. In our house we tend to throw out the carton a day before we realize we needed to cut out the little corner thing. If they really wanted to make it easy, there have been numerous solutions around for years. Or did I just wake up grouchy this morning?

Kunal Puri
Guest
Kunal Puri
15 years 10 days ago

Mail in rebates are a pain in the neck (or lower) from a consumer’s as well as retailer’s perspective. Often times the MIR is offered by the manufacturer but the consumer associates it with the retailer and perceives the retailer as a “cheat” when the rebate does not arrive….

I also believe that congress should pass legislation removing the oh so close mail-in dates for MIRs; similar to what’s been happening with expiration dates for gift cards…and while they are at it, make retailers give 50% of MIR money that was not claimed to charity, then see how fast retailer MIR policies change.

I for one had stopped using buy.com for over 3 yrs as they messed up on a significant mail in rebate I sent them. I have just tried them again and am still waiting on the response to this mail in rebate….

Pradip V. Mehta, P.E.
Guest
Pradip V. Mehta, P.E.
15 years 10 days ago

Mail in rebates are used by many retailers because they are a money making machine, and therefore, they are an effective marketing tool. Not many people are well enough organized to fill out a rebate form and attach a UPC/bar code from the product box and take an original copy of the receipt and put it all neatly in an envelope and mail it in on time. Therefore, many rebates go unclaimed. The amount not given out in rebates goes straight to the bottom line! Customers feel they are buying something at less than the retail price, while in reality many customers pay full price! If retailers are truly interested in saving customers money, they should offer instant rebates at the cash register.

Race Cowgill
Guest
Race Cowgill
15 years 10 days ago

It would be interesting if a manufacturing executive familiar with their organization’s inner motives regarding rebates might weigh in on this–anonymously, of course! All of the evidence certainly points to rebates being difficult on purpose, but this is only conjecture. The manufacturer’s public explanations seem to be along the lines of, “We have to make it this hard to avoid scams and fraud,” which doesn’t entirely make sense to me.

If I assume that the earlier posts on this discussion are true, then this is a very good example of companies with an organization-focus and not a customer-focus, and the consequences of such.

David Livingston
Guest
15 years 10 days ago

Any company that is using rebates to me shows a lack of class and I rank them right there with those middle of the night infomercial companies. With all the negativity associated with rebates, I don’t understand why any reputable company would want to ruin their name by associating themselves with rebates. If a retailer is not honest enough to simply offer the rebate at the time of purchase, I would suggest avoiding them all together. I recall that I was duped a couple of years ago after reading in the fine print they do not mail rebates to P.O. Boxes. How convenient–they don’t mention that before you buy the product. When I see a product advertised offering a rebate I just assume the rebate will never come and then go from there.

Janet Dorenkott
Guest
Janet Dorenkott
15 years 10 days ago

Rebates are a total waste of time. I agree that retailers use this tactic to draw in customers and then make it difficult to get the rebate. Most people I know have been burned numerous times with rebates that they were supposed to get back. I avoid manufacturers who offer rebates because I accept the fact that I only have a 20% chance of receiving it. Even if you actually get your rebate, it tends to be 6 months later. The entire process is annoying. The time involved in putting all the paperwork together is more valuable than the $10 you’ll get back. Retailers are making enough money on unused gift cards. They should give the consumer a break and just discount the product and forget about the rebate games.

Bruce Buckley
Guest
Bruce Buckley
15 years 10 days ago

Speaking from a consumer’s point of view, I don’t buy when I see there’s a mail-in rebate. I don’t know how many others take a similar stance, but I suspect the number isn’t small. And that means lost sales for retailers.

Jerome Schindler
Guest
15 years 10 days ago

I draft consumer offers for several clients. The objective is to make the terms clear, concise and as consumer friendly as possible while retaining basic requirements to minimize abuse and fraud. I saw a Kraft offer once that required the consumer to hand print their name and address (no preprinted address stickers) in a space so small it made it difficult to do. There was a limit of one redemption per household so what purpose did the hand printed requirement serve other than making it more difficult for the redemption house to correctly decipher the name/address, resulting in a lot of incorrectly mailed rebates and unhappy consumers? My best guess is that the hand printed idea came from some corporate lawyer who did not clearly think through the process.

Mark Lilien
Guest
15 years 10 days ago

Rebate hassles would end instantly if all rebates were subject to the state escheat laws. In other words, all unclaimed rebates would have to be turned into the state’s attorney general’s office for safekeeping. That’s the same place unclaimed bank accounts, unclaimed insurance checks, uncashed stock dividend checks, etc. go. Years ago, major department stores “absorbed” unclaimed charge account credits until they were busted under the escheat laws. If manufacturers and retailers want to make rebates easy, all they have to do is let people claim them online, paying the money into their PayPal, credit card or bank accounts. Rebate procedures just add unnecessary overhead. Customers like simplicity: just reduce the price.

Stephan Ilberg
Guest
Stephan Ilberg
15 years 10 days ago
I don’t think that companies make rebates difficult on purpose. You have to see how they are fulfilled. Most companies do not fulfill them themselves but go through a 3rd party company to do that work for them. This is where you loose time in the first place. Verification for eligibility is a long, very manual process. Also if you call in to find out about the status of a rebate you might call the 3rd party house as well and go through their system which is not always setup to handle the volume. If you call the manufacturer directly you might run into the problem to get to the right person. Even if you get there they might have to go back to the fulfillment house to fix the problem for you, which takes way to long. Because of all that, sure enough companies like MIRs because you can put a higher offer on the rebate and count on the breakage you get. I am actually on the manufacturing side of the business for… Read more »
Karin Miller
Guest
Karin Miller
15 years 10 days ago

Since breakage is much higher when the consumer is required to jump through hoops to qualify for and actually receive a rebate, these offers can be much richer than in-store rebates where redemption will be 100%. Therefore, it is not a surprise that retailers continue to promote these complicated offers, and consumers continue to find them irresistible, despite how much they dislike the actual process.

Ben Ball
Guest
15 years 10 days ago

OK, we (and that includes me) collectively do NOT like rebates as a group. The question posed however, is “are they still an effective marketing tool?” And to that I have to pose a counter question–“If they are not, then why do manufacturers continue to use them?”

Somebody must think these things still make sense. I can’t imagine that would include very many consumers, but….????

Kai Clarke
Guest
15 years 10 days ago

For many companies, rebates are a transient form of bait and switch for consumers. Getting their money from a company, after the consumer has committed and paid for the product, a losing proposition unless rebates are made to act like instant coupons. Instant coupons at grocery have long been a successful and great way to market, test and introduce products. Unfortunately, the Consumer Electronics Industry is not using this model when positioning their marketing initiatives. This has resulted in a wholesale backlash and a falling out of favor or rebates. When rebates are truly “instant” or the result of a coupon, they are not only successful, but promote the products, their strengths and reinforce the corporate initiatives (introductions, brand building, etc.) which are desired. Anything less than this is simply a failure.

Mike Bann
Guest
Mike Bann
15 years 9 days ago

Consumers would much prefer instant rebates but the truth is retailers make too much from the breakage. I know this to be a fact after dealing with many of them to join our “CashValue Card” coalition of instant rebate offering merchants.

Dave Wendland
Guest
14 years 11 months ago

Rebates definitely conjure up an image of unfulfilled promise and too much work for little reward. Our experience following the acquisition of The Caregivers Marketplace™ program is that consumers will respond favorably if rebates are timely, meaningful and worthwhile.

I believe there remains a place in the market for rebates. Instant ‘at the pump’ rebates may be ideal, however the instant reward may not build loyalty in the same way as a rebate requiring some additional consumer involvement.

We will continue to examine and tweak our approach to consumer rebates with the hope of finding the perfect balance between consumer reward and promotional success. The day of the rebate is far from dead…it just needs some reconstructive surgery.

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