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Brian
Why do companies give you mail in rebates instead of just giving you the marked down price at the store?
My guess is that they are betting that most people won't take the time and effort to mail in a rebate, thus saving lots of money for the company. For example, X Brand Wiper Blades is offering a $10 rebate when you buy a pair of blades. You buy them for $30 at the store, mail in the rebate, and then receive your $10 check in a couple months. Why doesn't X Brand just let you buy them at the store for $20 instead?

Thanks for all your answers in advance.
                     
 




wisdominknowledge
in addition to the fact that they know all rebates are not claimed, there are sme other important reasons.

first, there is accounting with their vendors-if they invoice the reselling store for the discounted amount, then there are returns from the store because of damage or unsold goods, the manufacturer may end up refunding the higher amount and losing money. more importantly, when they offer discounted prod. directly to retailers, retailers will "load up" and purchase cheap prod that will last for a long time-not all of it will be sold at discount to consumers-the resellers will use it as an opportunity too make all that extra profit for themselves. With rebates, the deal goes directly to the consumer. there are also other bookkeeping issues-they have to adjust their billing systems and probably assign new prod. numbers to track the discounted versus regular priced product.
secondly, they collect valuable info on their consumers via rebate forms-who you are, where you live, when and where you bought, why, what brand you may usually buy, etc. By collecting this, they can tailor marketing programs and send you special discounts, etc.

for the data collection purposes, companies would be happy to pay rebates at 100%-this data is very valuable. They'd rather have that than count on rebates not being claimed.


Monkey S
Rating
People do not have great follow through and do not send int he rebate forms.

Another main reason is the time value of money. The company gets to keep your cash longer and can make money off of it.


eskie lover
Besides those who that the company bets won't take the time and effort to even file for the rebate, there is another percentage who do not follow the instructions verbatim and won't qualify for it either. Then of course, you have the people who do file for and qualify for the rebate, receive it and never deposit it or cash it. As a result, the company's bottom line looks better...in the final analysis, it is all about making money under the guise of "discounting".


Herfnerd
For the exact reason you stated - in actuality, a very low percentage of people do send in the rebates


beenthere
Rating
If they sold the wipers to the store at a $10 discount, there is no guaranty that the store will sell the wipers at $10 less. Therefore, the store made a bigger profit but the marketing strategy will not work at the customer level.

If you are given the choice between several wipers, and you choose the one with the rebate, the company knows how many people made the choice based on $. There are many people who will buy their favorite brand regardless of price.

They also know that some people will not mail in the rebate. They can tell what percentage did not mail it in by taking the difference between the number of wipers sold in that time period and the number of rebate requests that they received.



josephmcgurk
Your assumption is correct. Last year alone, over 42% of all mail in rebates went unclaimed. What this means to the company is that $10 rebate you are eligible for actually only costs them $5.58. If however, they gave you the discount at the store at the time of purchase they would forfeit the full $10. Rebates have actually increased profit margins for compaines as opposed to reducing them as the general public thinks. Consider, you actually paid the company the value of the rebate to purchase the product and then you have to mail it in to receive your check. Even if every customer mailed in their rebate form, the company still reserves the right to wait 60 days to send your rebate. In that 60 days they earn interest on the rebate money. For big companies, rebates are a win win scenario.


Leslie K
Rating
Your guess is absolutely right. A HUGE percentage of people won't go through the effort of pulling off UPC codes, copying receipts, filling in forms, sticking a stamp on something, etc. etc. But in the meantime the company gets to advertise it's product at (what appears to be) a lower price.

Same thing with gift cards. Only about 10% of people actually use them so the companies that sell gift certificates and cards rake in dough and never actually sell something.



Worldly25
Rating
100 people qualify for rebate, 5 follow through and mail them in. That is why


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