Wednesday, February 23, 2005

Rebates

You are looking at a sales circular in the Sunday paper when you see a real deal. It might be a laptop for $500 or a DVD burner for $50. But then you read the fine print and you realize that the laptop's price is really $900. The $500 price is what you pay after you apply for three different mail-in rebates.

As you read the fine print, what you hear in the back of your head is a primal "ug". This is the same "ug" you hear whenever you are forced to jump through hoops for no reason. Because rebates are sad. They are a place in our society where the goal is to make things as "hard and unreliable" as possible, rather than "easier and better". Rebates, as implemented today, are very, very sad.

For example, I bought a new Sony DVD burner this month. It had a $30 rebate. But to get the rebate you have to:
  • Fill out the "rebate form", which is a little slip of cash register paper (note to self -- do SadTech column on "receipts"). The form looks like this:



    You have to fill it out by hand. Besides doctor's offices, this is one of the very last places in American society where hand-written forms are still used (note to self -- do SadTech column on medical forms).

  • Find the serial number of the device. On the form above you can see that I have not filled it in yet because, foolishly, I installed the drive before I realized that I needed the serial number. So now I have to take the machine apart again to get the serial number. (note to self -- do SadTech column on having to "install" a drive)

  • Cut the UPC code out of the $%^&!@ cardboard box. Good Lord! Can it get any more primitive than this??? (note to self -- do SadTech column on UPC codes)

  • Circle the item on the sales receipt.
Then you put it all in a snail mail envelope. Then you put a stamp on the envelope (note to self -- do SadTech column on snail mail). Then you mail it in....

And wait.

And wait.

And wait.

(note to self -- do SadTech column on waiting)

A lot of times you never get the rebate. That is by design. If you do get it, it usually takes about 8 weeks to arrive. And then it is often in some foreign currency, or worse a "gift card" which then forces you to go back to the store and buy something else if you actually want to access the money that you were promised.

All in all, the entire process is sad, and it is sad by design. It is a process that has been made purposefully sad in order to rip people off.

I once asked an Epson sales rep why companies use rebates and make them such a pain in the neck. His response was very simple -- only 7% of people send in the rebate form. And of them, probably only 7% get the rebate because the companies simply toss all of the rebate forms that they receive in the trash.

The question I have is, "when is this going to end?" In 2050, will we still be cutting UPC codes out of boxes and mailing them in by snail mail? When will companies actually create an honest process that reliably gives you the money you are promised?

Or better yet, why not simply lower the price by $30??? We all know the answer to that -- it would then be impossible to rip people off.

(note to self -- do SadTech column on Sunday papers and sales circulars)
(note to self -- do SadTech column on DVD burners)

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13 Comments:

At 7:56 AM, Anonymous Anonymous said...

you answered it best with your last sentence.. the point of rebates is to rely on the laziness of people to not send those rebates in! the mroe painful it is, the more someone wont send it in.

this is not really sad tech, it's just annoying and crappy business practices.

 
At 10:11 AM, Anonymous Anonymous said...

Rebates are a technology. A technology for ripping people off. And sad.

 
At 12:56 PM, Anonymous Anonymous said...

Another problem with rebates is tax. you pay tax on the full price. In the example you gave, laptop is $900 retail, $500 after rebates. Sales tax is 7%, so you pay an extra $28 in tax on the $400 in rebates. Rebates suck.

 
At 5:39 PM, Blogger John Peterson said...

Funny rebate story: Apparently several years ago, Intuit (the people who make Quicken) hired a Marketing Genius to increase their profits. And the Marketing Genius said: "Offer a $20 rebate so the price seems really low and sales will go up." The finance people said, "won't sending $20 checks to all our customers be expensive?" The Marketing Genius said "No, studies show only 10% of customers actually fill in their rebate paperwork."

Unfortunately MG failed to consider what type of people personal finance software customers are. Detailed oriented types who care a lot about money. Around 90% filled in their rebate forms.

 
At 7:54 PM, Anonymous Brian Person said...

Interesting story John.

Funny you mention this cause today I was suppose to fill out rebate returns today, but I got lazy and I'm putting it off for tommorrow.

 
At 3:16 PM, Anonymous Anonymous said...

Actually rebates are an excellent technology for price discrimination, one of the most egalitarian business practices around. People who care about money more, e.g. those who can afford less, get things for less money. That's a good thing.

 
At 2:58 PM, Anonymous Brian Person said...

Excellent point Anon. It endows opportunity for savings for the fiscally responsible people while the irresponible burden the cost. Rebates are something we should be proud of.

 
At 10:22 PM, Anonymous Anonymous said...

Brian, interesting until you consider that a big part of what makes rebates sad is that they actually fail to pay! Lost paperwork, endless delays, gift cards instead of cash as written by MB, are all things that make this particular technology sad and not worth having around.

 
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what kind of mad man is the manager of this place? I don't care for my point of view he can stay in that work all the life, with that prices the customers must fall like rain.

 
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