Rebates! - Updated June 16, 2004

Rebates are another characteristic of the "99 Cent Society" where we the people accept abuse in order to save more money. Though some of us are unaware or oblivious, most of us are familiar with the pitfalls of rebates. However, most of us are still unwise to all the pitfalls that companies, most of which are large corporate representatives of American business ethics, place before us. Perhaps the saddest part of the whole issue is that some of us, myself included, still purchase products with rebates knowing full well what the pitfalls are. Here's a list of possible sequential aspects of the rebate issue.

1. Software and Hardware companies, such as Symantec, Seagate and many others have an economic need to constantly make sales to survive. In order to inspire customers to purchase products, they must offer incentives. One is to fix product "bugs." Another is to add features. Finally, in the event the first two are not incentive enough, a product can offer a discount in one form or another. One of the discount methods is to offer a refund for purchasing the product. In other words, the market wouldn't bite at the initial price point. Sometimes, due to the common practice of rebates and customer's expectation of them, the initial price point is set intentionally high. It's like the constant sales one sees in clothing stores. For those of us that assume price points are set artificially high, we could conclude that to pay full retail is indeed foolish.

2. An example of a common rebate situation would be a product that would normally be worth $59.99. The company sets the initial price at $99.99. Then it offers a series of incentives called rebates that mean the buyer only ends up paying the sales tax on $99.99. One $25 rebate is automatic at the register. Another $50 rebate is for upgrade purchasers. The last $25 rebate is the stores incentive rebate. As far as you're concerned, and as far as the sign stated, the product was virtually "free" after the rebates. "Free" is most peoples favorite word, and hence the product flies out the door.

3. Here's what happens behind the scenes. First, we all buy the product. Many of us don't bother to read the fine print on the rebates. Sometimes, the fine print isn't even seen until after the product is purchased because it is on the receipt. There, when we look closely, we find multiple hoops we must jump thru in order to get our money back. One of the most interesting hoops is the fact that a bar code must be cut out of the box as proof of having purchased the product. Somewhere in the fine print, the store excuses itself from having to refund money to the customer because it will not except boxes with cut out bar codes. (How convenient.) Already, stores do everything they can to avoid giving money back on non-performing software and non-performing rebates. This is simply the first step. Most customers look at the hoops and approximately 60 percent don't apply for the rebate at all. This group ends up paying $74.99 for the $59.99 valued software. Manufactures have now made far more money than the software was worth on 60 percent of the purchasers. The remaining 40 percent actually apply for the rebate by cutting out the bar code and voiding the store warranty in hopes of achieving "free" software. They send it in via a very grateful U.S. post office which makes millions of dollars off of rebate mail. That's why you don't see Postal fraud brought up regarding non-performing rebates. The U.S.P.S. doesn't want to bite one of the few hands that feed it. If it did bite, it would be a Federal crime with stiff penalties to extort money via the mail service.

Next, the customer waits what is sometimes a 12 week plus eternity to hopefully receive the rebates. Sometimes they receive one rebate and not the other. In fact, approximately 50 percent of those awaiting rebates run into some type of snag. Often, the rebates are rejected because they were not "properly" submitted. The time hoop is a big one. You must send in the form in as little as one day after purchase for some of them to be honored. Another, is to simply reject a percentage of rebates out-of-hand for no good reason in hopes that the customer simply gives up. Sometimes, the customer simply doesn't get any notice what-so-ever. After 3 or 4 months, many customers don't even remember the rebate and that benefits the companies financed by the rebates. In fact, out of all the rebates I accurately sent in this year, 16 were fulfilled for a total of $446, 5 are pending for $263, and a shocking 12 are long overdue accounting for $280! Among the companies "over-due" are Fry's Electronics ($125 total includes O'Reilly and Aloha Bob), O'Reilly Books ($60), HIP Interactive ($5), Roxio (5 months late $20.), Symantec (rejected $70), Aloha Bob (rejected $25). Belkin has committed to sending me a check for $170 to cover a free UPS power supply they rejected out of hand when I purchased an Apple Powerbook. However, I have yet to see the check???

Next, the customer tries to fight back and runs into further obstacles, costs and hoop jumping. Companies apparently feel they can market around all the BBB complaints and all the hassles of answering customer concerns. You can't rely on the Post Office or the government. They have a severe conflict of interest since these schemes make them both money. The government is happy because it is actually getting sales tax on more than the actual sales price and is the key reason (whether they admit to it or not) why the government seldom assists in going after disreputable rebate offenders. One must constantly wonder what tax dollars actually accomplish.

HIP sets a good example of how these unscrupulous companies get around you. They honored all rebates except a $5 one. It is my impression that they assumed I would never miss the $5 and wouldn't fight them over it. Indeed some companies that appear to help you with web sites, often hide critical information from you on those sites and sometimes force you to use a toll number to fight back. This of course would discourage most people from arguing the $5 losses. After fighting the good fight, a rebate customer can usually expect to achieve as high as 90 percent of their rebates. However, we're talking about hours of frustrating phone calls and research and resubmission's as in the case of O'Reilly where a toll number was offered on so-called free books where no rebates were ever sent to date. They will usually ask for a resubmission and you must provide copies of requested material sometimes including the offer itself to prove correct dates, etc.

Still, we Americans, the 99 cent society, will probably continue to support these unethical companies with our business much as we support our insurance companies, government and all the other 99 cent companies that represent our country to the world, a world where we demonstrate our superiority and brag about our "goodness." True evil does exist when good men do nothing. Unethical American companies will rule the roost as long as we remain apathetic to their infidelity to the customer.

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