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Rebates: Why we get confused, frustrated and sometimes never redeem them

Rebates: Why we get confused, frustrated and sometimes never redeem them

Palm Beach Post Staff Writer
Updated: 8:10 p.m. Friday, May 14, 2010
Posted: 7:51 p.m. Friday, May 14, 2010

Rebates: We all love the savings they offer, and hate the hassle of filling them out and turning them in.

For as long as rebates have been around, consumers have had a love/hate relationship with them. They've even been satirized in comic strips such as Frank & Ernest and Dilbert (which in 2009 told the story of "Rebaterus," a monster who forces Dilbert to pass five tests before a rebate for a phone he bought will be authorized).

As thousands of Floridians await their rebate from the state's Cash for Appliances program, perhaps it's time to take a moment to examine rebates and consumer behavior.

"Rebates have been around for decades as a retail marketing tool for manufacturers and retailers," said Hal Stinchfield, a rebate analyst and owner of consulting firm Promotional Marketing Insights. "They really took off in 2000 or 2001 when they were introduced to office products and consumer electronics ."

The number of rebates offered a year is hard to track, but Stinchfield said it peaked a few years ago, with manufacturers giving out up to 600 million rebate offers.

"When the economy started going south, there was a resurgence of activity in rebates, notably in alcoholic

beverages and the health and beauty sectors," Stinchfield said.

In 2009, he estimates that about 300 million rebates were offered: instant rebates, mail-in rebates or online rebates.

Although redemption rates vary widely based on price, product and a number of other factors, experts agree that the process to get rebate money is not usually simple.

"All these hoops they make consumers jump through are to prevent consumer fraud," Stinchfield said. "For $50, many consumers would gladly try to manufacture a fake barcode or receipt, so manufacturers need to be certain submissions are legitimate."

Tim Silk, an assistant professor of marketing at the University of British Columbia who has done studies on rebate redemptions, said rebates are a popular marketing strategy because they boost sales and low redemption rates result in little payout.

"These rebates can be a good opportunity for people to save," Silk said.

"But post-purchase behavior is quite interesting. Many people don't redeem the rebates like they think they will."

Steven Shugan, a member of the marketing faculty at the University of Florida, said a small number of companies have been blamed in the past for making rebates hard with the intent that the hassle will drive down redemption rates.

But Shugan emphasized that this is not a prevalent practice among manufacturers and third-party redemption centers.

Even so - as consumers fill out forms and try to decipher which UPC code to send in - it can seem like companies intentionally make the process frustrating so people won't redeem the rebates.

In 2005, Best Buy announced that it would do away with its mail-in rebates program because of customer complaints. OfficeMax followed up with a similar announcement in 2006, saying that rebates were their No. 1 customer complaint.

"A lot of people are not good at following instructions," said David Sheriden, who started a fee-based service in Delray Beach called Rebate Remedy that turns in rebates to manufacturers for consumers. "Manufacturers make it tricky."

The experts offered some tips for consumers to get their money when it comes to rebates:

Don't get caught up in the rebate when buying an item. Shugan said people need to realize that there's a possibility that they won't redeem the rebate and should consider the original price of the item when looking to buy.

"People suffer from a really big overconfidence effect that they'll redeem the rebate," Silk said.

He surveyed participants on how confident they were that they would redeem a $2 rebate on movie tickets. He found that among the group that said they were very confident they would redeem the rebate, about half never even started the redemption process.

Think rationally about the rebate being offered. Silk said people should pay attention to the amount of money being saved, not just the percentage.

"Five dollars is five dollars," Silk said. But he said that people will drive 50 miles to get a rebate of $5 off a $20 item, while they won't make the effort for $5 off a $200 item.

Make sure you have all the information on the rebate process. Shugan said customers should not leave the store without a clear understanding of exactly what needs to be done to get the rebate.

Some companies, such as Costco, offer tip sheets that lay out the process and requirements.

Redeem the rebate as soon as possible. We all know we procrastinate. And the longer we wait, the less likely we are to fill out the form. And the more likely we are to lose the receipt or other necessary information.

Although conventional wisdom would suggest that manufacturers offer consumers a wide window of time to redeem their rebates, Silk's studies found that shorter redemption windows actually increased the rate of redemption.

Of course, check the rebate's requirements; Shugan said some manufacturers give specific windows of when the rebate can be redeemed, so you don't want to send it in too early.

Make copies. Retain copies of every single component of the rebate, including the mail-in certificate, UPC symbols, proof-of-purchase and receipts, said Stinchfield. Keep the copies together.

Circle dates. Pay attention to when forms need to be filled out, postmarked, etc. Also circle the date when you should expect to get your rebate check, based on what the manufacturer said.

Know whom to call. Haven't gotten your rebate in a reasonable amount of time? Told that your rebate request was incomplete? Feel like you're being scammed?

Most companies that get incomplete or wrong forms will send back a form letter telling you what to fix and when you need to resubmit. But if you don't get satisfaction, research the name of a specific person at the manufacturer you can talk to.

Stinchfield said it rarely produces good results to send a complaint to a P.O. box. Stinchfield said speaking with a rebate analyst also can be helpful.

If you feel you've been scammed, you can reach out to the Florida attorney general's office or the Better Business Bureau.

Rebates: We all love the savings they offer, and hate the hassle of filling them out and turning them in.

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