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Rebates: a Force for Absolute Evil

Written on July 10, 2004 by Jon Bach


Okay, perhaps they aren't ABSOLUTE evil, but many times they can be more problems than they are worth. How many times have you bought something advertising nearly a third off the purchase price if you simply mail in a card to the manufacturer? How often did you actually bother? Or are you like me and completely forget about the rebate until the last day of eligibility?

Big Business

By all accounts, the rebate business is a steadily growing one with current estimates in the 6 billion dollar range. This is up from 1 billion in 1999. Lucrative, would you not agree? Almost makes you want to look into writing rebate programs, doesn't it?

Rebates have become a popular way to sell a product, whether it is a computer game, a printer or an entire computer. And they are good for a company's bottom line as well.

Why discount the price of that laptop computer when you can keep the normal $1600 price-tag and give the potential owner a mail-in rebate coupon for 30% off?

The Consumer

Unfortunately, those billions seem to be more and more at the expense of the consumers buying those rebated products. While some rebate offers are accepted and processed with few if any hassles, many more consumers are being denied the monies promised them by the company offering a rebate on their product.

A consumer advocacy website, http://www.badbusinessbureau.com, lists more than one thousand complaints of denied rebates, bounced rebate checks and poor customer service. The list goes on, for quite awhile.

Admittedly, some of these complaints would have become non-starters if the customers making the complaints had read through the terms of use for the rebates - but how often do you read the fine print? The others, in some cases, border on outright fraud. Several complaints concerned a company in New York that had apparently shut down the account used to pay out the rebate checks.

There's also other well known rebate "offers" out there where you can get $100 or more off your computer. The catch, you have to sign up for an ISP you may not need or want for up to 3 years!

The Government Response

The federal government, in recent years has begun to respond to the multitude of complaints about bogus or unfairly denied rebate claims and going after several major manufacturers for not sending rebate checks.

The Federal Trade Commissions (FTC) Website lists a series of commonsense guidelines to dealing with rebate offers. (http://www.ftc.gov/bcp/conline/pubs/alerts/rebatealrt.htm). Some of what they suggest is written below:

Taking the Bait Out of Rebates

Rebate offers can be irresistible to consumers, slashing the price of consumer goods at the time of purchase or promising partial or full reimbursements after the purchase.

Some manufacturers and retailers entice shoppers with instant cash rebates that can be redeemed immediately at the checkout counter.

But most rebates are of the mail-in variety. They require consumers to pay the full cost of an item at the time purchase, then to send documentation to the manufacturer or retailer to receive a rebate by mail.

The documentation required generally includes the original sales receipt, UPC code, rebate slip, and the customer's name, address and telephone number. In most cases, this paperwork must be sent to the manufacturer or retailer within 30 days of the purchase. Consumers generally receive their rebates up to 12 weeks later.

But the Federal Trade Commission cautions consumers against being "baited" by rebates that never arrive or arrive far later than promised. By law, companies are required to send rebates within the time frame promised, or if no time is specified, within 30 days.

When purchasing a product that offers a rebate, the FTC encourages consumers to:

  • Follow the instructions on the rebate form and enclose all required documentation in the envelope when filing for a rebate.
  • Make a copy of all paperwork to be mailed when applying for a rebate. It's the only record a consumer will have of the transaction if anything goes wrong.
  • Contact the company if the rebate doesn't arrive within the time promised.
  • If the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, the state Attorney General or the local Better Business Bureau.


As always, knowledge is your best defense. If you're going to play the rebate game, do your homework. Make sure the company you're buying from doesn't have a history of problems with rebates. At the very least, do not go into the deal thinking that you're paying 30% less for your product. You're paying full price, and you'll most likely be working very hard for that 30%.