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Rebelling Against Rebates

Cinde Moore is fed up with mail-in rebates -- the next time she sees an offer, she plans to run.

Two months ago, Moore bought a $1,065 television from a Matthews appliance and electronics store thinking she'd get $170 in cash back. After multiple calls to the television manufacturer's claim center, she's still waiting for her money.

"I think there are better ways to compensate customers than the grief they make you go through on rebates," said Moore, an Indian Trail resident. "It's just too much of a hassle. I've been successful with some of them, but I had to put up a fight with all of them to get it."

Rebates have long been a way for electronics stores, wireless phone companies and other retailers to entice bargain-hunting customers to buy their products. But a growing number of stores are nixing their mail-in rebate offers in response to customer complaints that they're clipping UPC codes, filling out forms and making multiple phone calls only to get their money much later than promised, or not at all.

And regulators are starting to hold stores financially responsible if manufacturers don't honor the rebate promises.

Dell announced last month that it is reducing the number of mail-in rebate offers on Dimension desktop computers later this year. OfficeMax eliminated almost all of its rebates. Best Buy is nearing completion of two-year-long scale- back of its rebates. Staples streamlined its program.

Groups like the nonprofit Foundation for Taxpayer and Consumer Rights have railed against rebate programs, saying some have become rip-offs. Many store advertisements, the group says, display the sales price in large letters while showing the "after rebate" tag in small letters. Sometimes customers leave with few or no instructions on how to claim the rebate, the group says.

Shoppers like Moore applaud store efforts to eliminate the programs. But some experts say the stores could be hurting shoppers and their own bottom line.

Hal Stinchfield, founder and CEO of Promotional Marketing Insights, a Minnesota-based company that helps marketers improve their rebate programs, said a well-advertised rebate can increase sales by 500 percent, while eliminating rebates can result in a 20 percent annual loss of sales.

Meanwhile, Stinchfield said, shoppers are hurt because manufacturers can't afford to permanently lower the prices on their products. In the end, customers who might have saved money during a rebate program will wind up paying full price, Stinchfield said.

Here's why: Stores will be reluctant to offer at-the-checkout discounts because those would apply to all customers, when rebates are financially feasible to companies only because they target the small percent of bargain hunters who are willing to go through the trouble of mailing in information.

"Consumers feel violated and they truly believe in their hearts that (rebates are) a fraudulent endeavor, but it's only select retailers that are having this problem," Stinchfield said. "The fix isn't to get rid of rebates -- the fix is to fix rebates."

Stinchfield said solutions vary, but manufacturers can solve the problem by improving communication with customers, structuring offers so the time frames are reasonable and minimizing the amount of information required to make a claim. Some stores are moving to paperless programs in which customers need only go online to file.

For some shoppers, however, the struggle continues.

Charlotte resident Stephen Espin said he's still waiting for a $100 rebate on a $520 computer he purchased in August 2005. He said he's spoken with the company at least five times and has been promised a check is on the way.

"It's been a nightmare," Espin said. "It's not about the money at this point. It's just I don't understand why they can't get the money to me."

Nichole Monroe Bell: 704-358-5103

Getting Your Rebate

• Before you buy, pay attention to the dates listed on the rebate to ensure you will qualify. Almost all rebates are valid only during a certain time frame.• Don't delay -- mail the rebate form right away and put on adequate postage.

• Follow the instructions on the rebate form and enclose all required documentation..

• Use a street address, when possible. Fearing fraud, many rebate centers won't mail to a post office box..

• Make a copy of all the paperwork being mailed, even the envelope. It's the only record you'll have if something goes wrong..

• Contact the manufacturer if the rebate doesn't arrive on time. By law, companies are required to send rebates within the time promised, or if no time is specified, within 30 days.

• If the rebate never arrives or arrives late, file a complaint with the Better Business Bureau, Federal Trade Commission or state attorney general. Authorities can take action against a store if a manufacturer fails to make good on its rebate promises. Better Business Bureau of Southern Piedmont: www.charlotte.bbb.org, 704-927-8611

U.S. Federal Trade Commission: www.ftc.gov, 877-382-4357

N.C. Attorney General: www.ncdoj.com, 877-566-7226

S.C. Attorney General: www.scattorneygeneral.org, 803-734-3970

How Rebates Work

Customers typically encounter two kinds of rebates in stores: manufacturer rebates and retailer's instant cash rebates. With instant rebates, the customer gets the discount at checkout. With mail-in rebates, customers pay full price, then send proof of purchase to a manufacturer-hired claim center, which decides whether the purchase meets the requirements for rebate. If the purchase qualifies, the center mails a check to the customer.

What This Means for Shoppers

Both shoppers and manufacturers can lose out when stores eliminate rebate programs altogether, some experts say. Shoppers lose the chance to save money because many manufacturers can't afford to permanently lower prices. Stores lose out on the increased store traffic rebate offers bring. A better option for both customers and stores, experts say, is for stores to streamline the process, use paperless programs or make it easier for customers to reach someone if a problem occurs.

Promotional Marketing Insights ♦ 2255 Abingdon Way ♦ Orono, MN 55356
Office: 952-404-1915 ♦ Mobile: 612-867-9760 ♦ Fax: 952-404-2211
hal@promotioninsights.com ♦ www.promotioninsights.com
 
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