Saturday, November 26, 2005


With the shopping season officially upon us since yesterday, the phrase "mail-in rebate" is gonna be everywhere. This week's BusinessWeek has an article on the popularity of such rebates with companies and their corresponding unpopularity with consumers. The psychology behind rebates is that "they get consumers to focus on the discounted price of a product and then buy it at full price". I guess they might well be called "rebaits"!

The article has some astonishing statistics on the business of mail-in rebates. According to market research, some 400 million rebates, with a face value of $6 billion, are offered in a year. And the reason why companies love them? Fully 40% of all rebates don't get redeemed since consumers fail to apply for them or their applications get rejected. Using TiVo as an example, the article says that 50,000 of its 104,000 new subscribers failed to redeem mail-in rebate offers. This led to a reduction of the company's rebate expense by $5 million, which translated to the company reducing its 1st quarter loss to $857,000 from $9.1 million in the same period last year! So if you think about it, companies offer mail-in rebates since they believe in their customers' laziness and forgetfulness! Makes you feel good, huh?!

The psychology has worked on me too :-( I too have been tempted by mail-in rebates(like on this one, my only purchase during this year's Thanksgiving sale) and I too have, in the past, forgotten to redeem a couple of rebates. But luckily, I haven't had the problems that some people mentioned in the article have had, on the occasions that I did redeem them.

For people like me, the article has these tips:
  • Don't toss the packaging box
  • Keep those receipts
  • Make copies of everything
  • Don't delay
  • Be sure to follow up
  • Sort the mail carefully since checks can look like junk mail
So go ahead. Shop. Just don't forget to mail in those rebates...


At 3:48 PM, Blogger Unknown said...

there is a dilbert joke balaji where dogbert suggests that they sell their product for 1000050 dollars and have a million dollars mail in rebate.. his logic.. "all we need is one sucker who forgets to mail in his rebate check"


At 8:09 PM, Blogger narayanan said...

Yeah i know, thats why these mail-in-rebates are there for. Some vendors take ages to return these rebates, its a real pain to follow these up :(.

Sort the mail carefully since checks can look like junk mail

Seriously has someone missed these? Checks,paystubs are the first to hit my eye when I open the mailbox :D


At 11:25 PM, Blogger Balaji said...

sundar, LOL. right on the mark, as dilbert usually is :)

narayanan, i was wondering about that too since the checks' envelopes usually say something like 'rebate center' in the 'from' address.

At 8:56 AM, Blogger Raju said...

Very useful article, Balaji.. and very well written.. As Sundar mentioned, there were a lot of items whose price is less than the mail-in-rebate..

Another of the business thing is the credit cards issued by the individual companies like JCPenney, Target, Macys etc. If you forget to pay one month bill, fine pottu theettiduvaanga.. Even if one pays the full amount, the 'late fee' keeps kutti pottufying every month.. Suckers..

At 4:56 PM, Blogger Unknown said...

as a followup. we are still fighting 150 $ in rebate charges with an online cell phone selling company.. the phones were supposed to be free.. but our application keeps getting rejected for reasons like "upc not attached " (we had attached it), "application not legible" (i will post that application on my blog and let the public decide !).. so beware

At 8:03 PM, Blogger Balaji said...

raju, yep. i never get those damn credit cards that stores try to load on us.

sundar, ouch! those 2 reasons r exactly the ones listed in the article too.

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