Why companies do rebates...and gift cards

Discussion in 'Community Discussion' started by flyfish29, Aug 12, 2009.

  1. flyfish29 macrumors 68020

    flyfish29

    Joined:
    Feb 4, 2003
    Location:
    New HAMpshire
    #1
    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!:D
     
  2. GoCubsGo macrumors Nehalem

    GoCubsGo

    Joined:
    Feb 19, 2005
    #2
    I thought this was common knowledge to be honest.
     
  3. flyfish29 thread starter macrumors 68020

    flyfish29

    Joined:
    Feb 4, 2003
    Location:
    New HAMpshire
    #3
    I did too, but I get so many people who comment to me or post things about rebates...It used to be that less than 10% of rebates are redeemed- but I think that has changed due to online forms, etc.
     
  4. MTI macrumors 65816

    Joined:
    Feb 17, 2009
    Location:
    Scottsdale, AZ
    #4
    What is not common knowledge is that the stores, in most states, aren't allowed to keep the money in unused gift cards and rebates.

    The money eventually gets turned over to state "abandoned asset" departments. Every state has one and they typically have websites where you can run name searches to see if there's any of your dough in them. Since gift cards aren't identified by name, you may not be able to track those. There's so much cash in those accounts that some states are seeking legislation that would allow them to "borrow" from those accounts do get them through some budget shortfalls.

    However, tax refunds, refunds from insurance companies, hospitals, stock dividends, etc. that can't be delivered, typically end up in the states bank accounts of the "last known address." So, it's a wise move to check every state that you've ever had a mailing address in.

    Don't use those online "finder" services, you can do it for free by yourself and the computer you're reading this on.
     
  5. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #5
    The main reason companies offer rebates is that they can advertise the rebated price, yet sell the product for the full price. Additionally they know full well that only a small percentage ever actually redeem the rebates so its a win win situation. Appear to be selling the product at a much lower price but rake in the profits since nobody ever redeems them.
     
  6. yg17 macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #6
    Also, rather than just giving you $X off at the register, they can keep that in a bank account and make some interest before mailing your rebate check, you don't think it really takes them 10 weeks to process your rebate, do you?
     
  7. zioxide macrumors 603

    zioxide

    Joined:
    Dec 11, 2006
    #7
    Gift cards suck.

    Why would I want something thats tied to a specific store? Just give me the cash so I can use it for beer and weed instead. ;)
     
  8. dmmcintyre3 macrumors 68020

    Joined:
    Mar 4, 2007
    #8
    Can't you sell them on ebay?
     
  9. zioxide macrumors 603

    zioxide

    Joined:
    Dec 11, 2006
    #9
    Well yeah. But it's a pain in the ass and you won't get the full value.

    I'd rather just not receive them.
     

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