So after reading several threads about companies, I noticed several comments about why companies do rebates.
Here is the reason they do rebates. Statistics show that many consumers don't redeem rebates. Therefore companies can make customers think they are getting $100 off a computer when they purchase it. However, when many people don't fill them out right, too late, or just don't do it, the "lost revenue" of the company drops to something like $60 (or ever lower) per computer.
In recent years companies have made the rebate process easier which you would think that would be worse for companies, however they had to start doing this because consumers were tired of difficult rebate forms/instructions so they tended not to search for deals using rebates. So companies simply had to make the rebates easier to entice customers to purchase those deals.
In response to those that say "why doesn't the company just make the price lower. There are two reasons why they don't-
1. They would only make the price something like $50 or 60 lower on items that usually have a rebate of $100 which doesn't make it as good of a sales offer to entice customers to purchase from them.
2. Some companies won't let retailers sell their stuff on sale, so rebates (or store gift cards) are one option to differentiate themselves from other retailers.
On a secondary note- those gift card deals at stores- they are cheap for the store to provide- remember, on a $100 Target gift card deal, it only costs them $50 (due to markup on prices of products)
That is your public service announcement for the day!
Here is the reason they do rebates. Statistics show that many consumers don't redeem rebates. Therefore companies can make customers think they are getting $100 off a computer when they purchase it. However, when many people don't fill them out right, too late, or just don't do it, the "lost revenue" of the company drops to something like $60 (or ever lower) per computer.
In recent years companies have made the rebate process easier which you would think that would be worse for companies, however they had to start doing this because consumers were tired of difficult rebate forms/instructions so they tended not to search for deals using rebates. So companies simply had to make the rebates easier to entice customers to purchase those deals.
In response to those that say "why doesn't the company just make the price lower. There are two reasons why they don't-
1. They would only make the price something like $50 or 60 lower on items that usually have a rebate of $100 which doesn't make it as good of a sales offer to entice customers to purchase from them.
2. Some companies won't let retailers sell their stuff on sale, so rebates (or store gift cards) are one option to differentiate themselves from other retailers.
On a secondary note- those gift card deals at stores- they are cheap for the store to provide- remember, on a $100 Target gift card deal, it only costs them $50 (due to markup on prices of products)
That is your public service announcement for the day!
