I wrote earlier about the controversial topic of discriminatory pricing, where vendors try to charge different customers different prices, usually based on what they can afford or will tolerate. One particularly vexing type of such pricing is the mail-in rebate. Mail in rebates do two things. In their pure form, they give a lower price to people willing to spend some time on the bureaucracy. As such, they would work at charging richer customers more because richer customers tend to value time more than money compared to poorer customers.
However, they are rarely that simple. Some products offer ridiculously low rebates it’s not worth anybody’s time to process — they are not much better than a trick. With higher rebates, often the full price is inflated to make the discount appear larger than it is. This can also be a trick. A person who has decided she will not do rebates should normally never buy such a product, however, in many cases people do buy them, and never get around to processing the rebate.
While the vendors never release figures, clearly many people never get their rebate. Companies that manage rebates can in fact make fairly realiable promises about how many of the rebates will actually be redeemed. While I suspect the largest reason for non-redemption is “not getting around to it,” in many cases rebate programs work to make it hard to redeem. They will make the redemption process as complex as possible, and not redeem on any little error. Some companies have even been found to have fraudulently failed to redeem correctly prepared rebate forms, waiting for customers to complain and paying only if they do. Of course, few customers complain, as it’s even more work, and of those who do, few retain the documentation necessary for a complaint. In many cases, customers do not even keep note of what rebate requests they sent out. Rebate companies tend to deliberately take as long as possible — usually several months — to process rebates. This is partly to keep the float on the money, but also I suspect to make people forget about what they are waiting for.
As such, I avoid most rebates, but I do do some of them. In particular, if I can do rebates in bulk, it can be worthwhile. In this case (usually around the holidays) I will gather together many rebates and fill them out all at once. I took a sheet of laser printer address labels and printed out stickers with all the common items desired on rebate forms, including name/address stickers which I already have, and stickers with a special E-mail address and free voicemail only phone number (ipkall.com) to speed up the process.
This year, several rebates now “offered” online processing. This turns out to save time for the company, not for you. You fill in the information (saving them data entry work) and it prints out your rebate form, which you must still mail in along with the original UPC and some form of original receipt. (Fry’s has automated their end of the rebate process, printing rebate receipts and rebate forms on thermal printers at the cash register.)
One of the companies, onrebate.com seemed like an even nastier trick. On my first visit the site was incredibly slow, taking 30 seconds per page in a multi-step process. However, a later visit was OK. However, they of course do nothing to make things easier, like re-use of data on a second rebate (including some of the famous “double rebate” products.) One thing they offer which is very positive is payment of your rebate via paypal, which has two giant benefits — no need for a trip to the bank, and easy tracking of when you are repaid. In addition, it eliminates the common trick of printing rebate cheques with “not valid after…” legends set for the very near future, another way they block redemption.
Onrebate also offers quick payment, if you let them keep about 10% of your rebate. Of course this is a bad deal to just get money 2 months sooner, but we know people fall for it. As an experiment, I filed two rebates with them, one with the instant payment and one without. I got the notice of processing on the instant payment one first, saying I would be paid within a couple of weeks. On the other hand I got the money on the other one first! E-mail notification is positive for tracking, of course. Some companies go the other way. I received a $10 rebate check recently with no indication, other than the name of the general rebate processing company, of what it was for. This helps confuse people about what rebates they have received and not received.
Even with the streamlined bulk process, however, it took too much time this year. One needs to check that one has followed all the rules, which often vary. Some demand signatures, some demand emails, some demand phone numbers. Some demand copies of receipts, some demand originals. Some demand web processing. Almost all demand original UPCs which can be hard work to cut out of products. Some demand copies. A quick and easy idea for “copies” is to use a digital camera to take pictures of the various items. This also is a quick record you can go back and check should you have the inclination. It doesn’t say the copies have to be very good. Most households don’t have photocopiers any more, but almost all have digital cameras and printers, which is even easier than a scanner.
(I also have a small sheetfed scanner I use for my paperless home efforts, but it has problems with thermal paper receipts.)
We’ll never see this become easy because of course the rebate management companies want the redemption rate to stay low. I presume some of them even market to the vendors the low rates, otherwise we would not see the “free after rebate” concept that has become more common.
I filed claims for $290 in rebates this December. So far one $60 (paypal) and one $10 have come in, and the expedited paypal rebates have not. I don’t expect to see much before late February, however.
Outside of bulk processing or very good rebate deals, the non-redemption rate seems to make it better to always check if there is a non-rebated product at a good price. Figure out your own “discount rate” for how often you personally complete rebates and how often you actually receive money. I doubt many get 100%. Then factor in a value on your time — what do you get paid per hour, figuring 2000 to 2500 hours for salaried people? Expect to spend 10 to 30 minutes on a rebate form, including post office trips, bank trips etc. (This is much lower if you regularly go to these places, or have at-home mail pickup as I do.)
Of course, you may not even agree with the company’s original goal — to find a way to charge more to people who value time over money, and thus less to those who value money over time. It is interesting, however, to speculate on what other systems might be devised to reach this goal that are not so random and bureaucratic as the rebate system. For example, use of the web only became practical once you could presume the “money > time” crowd had web access — a system that allows discounts only for the rich is not going to be very effective. I am interested in alternative ideas.
One might be to offer the rebates to those who agree to take a web journey that exposes them to advertising. This both assures they value money over time but actually sells that attention. A web process, upon which you are paid by paypal at the end, could be highly reliable without the “lottery” factor. Vendors could even start including tokens in products with one-time-use numbers on them which people could type in rather than having to mail physical UPC codes. (However, the mailing of the UPC code, aside from adding work and cost to the process also is important for disallowing returns of products after rebates are filed. Stores would need to check that the token number was present, and not used, before doing a return.) Stores could also print a similar magic number on sales receipts.
The work associated in the logistics of rebates can’t be eliminated by the web, though. The goal, after all, is to make the process time consuming, so you can only shift work from one place to another. But it can be made less random, which would actually encourage more people to buy rebated products if they truly believe they will offer up their time and attention.