Christmas shopping can be costly. Christmas present buying is rarely planned for. So we get to the holiday season and just do the best we can. The key is looking for the good deals.
A recent advertisement marketed an $800 computer for $300. What was the catch? You had to go through the process of getting a $500 rebate to make up the difference. It is human nature to focus on the end result. I just bought a computer for $300. However, that is only true if you successfully navigate through the rebate process. It’s not as easy as it sounds.
Rebating is a very profitable marketing and sales tool. During Christmas, retailers compete for your consumer dollars and use rebates as a way to lure consumers into their stores to sell products. The reality is that there are some other reasons retailers love the rebate and would probably prefer you didn’t know.
Profiting from Human Error
We are all human and have a tendency to make human errors, and retailers love to profit from those errors. Due to human tendencies like procrastination, forgetfulness and disorganization, it is easy not to complete the rebate process and claim the savings. It is estimated that only 50 to 60 percent of rebates are even redeemed. That makes for a pretty good profit for the retailer.
Just like the credit industry, retailers rely on making money from consumer mistakes. You know what happens: You buy a product using a rebate. You focus on that net number and not what you actually paid because in the back of your mind, you have all the good intentions in the world of sending that rebate back.
You rush home, wrap the present and just imagine how excited your friend, family member, etc., is going to be when they open up your gift. That rebate is the last thing on your mind. After all, it is paperwork. Who likes paperwork?
With all good intentions, you pile up the rebate paperwork and conclude you will get to it later. Ultimately, you become one of those 50 to 60 percent of consumers who lose out on that money because the rebate never gets completed, or you threw away a key piece of information needed to get the rebate.
Then there is the rebate process. Is it my imagination or do retailers make the rebate process so impossible that only the most organized and astute have a chance of actually claiming their rebate?
Retailers make it almost impossible to get these rebates redeemed. They give you a long laundry list of items and paperwork that have to be completed. One small mistake kicks you out of the process. Many retailers send the check back in envelopes that look like junk mail. As a result, it gets thrown into “file 13.”
The Wall Street Journal ran a study on rebates. The study showed that only one out of five rebates sent in were successfully completed. Then you have your dishonest retailers who make redemption impossible or intentionally disregard your paperwork. As a consumer, it is almost easier to give up than attempt to fight the system.
So if the rebate temptation is too much to bear, make sure you follow these tips:
- Read the instructions multiple times.
- Fill out your rebate first thing after the purchase. Don’t procrastinate.
- Get organized. Put a file together, make copies and have the toll-free number handy. Make a note to follow up in six-week intervals. Twelve weeks is the average delivery time.
- Know your deadlines. There is a deadline for submission and sometimes a deadline for resubmission, following the correction of errors. Make sure that you know those dates ahead of time.
- Know the difference between the Universal Product Code (has to be cut from the box) and the proof-of-purchase. Many times the consumer sends the wrong one.
- Know whether they want a copy of the receipt or the original receipt.
- Determine the cost of your time. Determine if it is worth going through this process for a small rebate.
Above all, don’t become a rebate statistic. Rebates can work great and save you a lot of money. However, just know you might be playing a game where big business and human nature are stacking the cards against you, and the saving you planned on getting is nothing more than a pipe dream.