A rebate is the amount paid through deductions, refunds, or refunds for what has been paid or contributed. This is the kind of sales promotions that marketers use primarily as incentives or supplements for product sales. mail-in rebates ( MIR ) are the most common. MIR entitles buyers to send coupons, receipts and barcodes in order to receive checks for a certain amount, depending on the product, time and place of purchase. Discounts are offered by selected retailers or product manufacturers. Large stores often work with producers, usually requiring two or even three separate rebates for each item. Manufacturers rebates sometimes only apply in one store. Custom rebate and receipt forms are sometimes printed by the cash machine upon purchase with a separate receipt or available online for download. In some cases, rebates may be available immediately, which in this case is referred to as an instant rebate. Some rebate programs offer several payment options to consumers, including paper checks, prepaid cards that can be spent immediately without the need to go to the bank, or even PayPal payments.
Video Rebate (marketing)
Usage
Rebate is greatly used for advertising sales at retail stores. For example, an item might be advertised as "$ 39 after rebate" with a $ 79 item outside the door at a $ 40 discount that customers must exchange for. Turnover times are generally four to eight weeks, although some rebates record a period of eight to twelve weeks.
In the UK, rebates are less common, with manufacturers and retailers preferring to discount on points of sale rather than requiring mail-in or coupons. However, rebates are sometimes awarded in the form of "cashback bids" for contract mobile phones or other high value retail items sold together with credit agreements.
Rebates are usually offered by retailers indirectly, through the use of a third-party rebate or cashback website.
Maps Rebate (marketing)
Cleanup rebate
Most rebates are handled under contracts by discount rebates specializing in processing rebates and contest applications.
Rules and laws
In the United States, the Connecticut state section 42-110b-19 (e) requires retailers who advertise the net price of a good after a rebate to pay to the consumer the amount of the rebate at the time of purchase. Rhode Island has similar rules (Genesis 6-13.1-1). Otherwise, the after-price price can not be advertised as the final price to be paid by the consumer. For example, a retailer in Connecticut can only advertise "$ 40 with a $ 40 rebate," not "Free After Rebate," unless they give a rebate at the time of purchase.
Rationale
Rebates have become very popular in retail sales in the United States. Resellers and manufacturers have many reasons to offer it:
- Information provided in the form of rebates, such as name, address, payment method, can be used for data mining studies of consumer behavior.
- This information can be used as evidence of a pre-existing business relationship for marketing purposes, such as not calling up the list.
- Customers tend to pay attention to price increases and react negatively. Rabat offers retailers the benefits of giving customers temporary discounts on an item, to stimulate sales, while allowing it to maintain its current price point. This method avoids the negative reaction that can be felt with the price lowered and then raised later.
- Rebates also allow companies to "protect the price" of a particular product line by being selective in which model or brand will be discounted. This allows retailers and manufacturers to move some products at a lower cost while maintaining a successful model price. Direct price reductions on some models will have a domino effect on all products in a row.
- During turnaround time, the company may earn interest on the money.
- If the turnaround time shifts to the next fiscal year or the next quarter, rebate offers can increase sales in the current period, and should not be accountable until the next period and can then be attributed as costs that reduce sales or fees for the next period, giving the company an accounting profit with their Wall Street projection.
- Not all buyers will meet the criteria for receiving rebates. Companies often need barcodes, receipts, and additional information about the original UPC, which may have forgotten to be included when redeeming a rebate. Companies almost always add another warning to rebate too, as redemption must be postmarked on a certain date. Another possible tactic is to disguise the rebate letters to look like junk mail, so customers can ignore it. This benefits the company if buyers do not act quickly to redeem. However, the University of Florida study notes that a shorter redemption period actually increases the redemption rate in favor of consumers because it gives them little time for delays to regulate.
- New companies looking to enter the market can offer huge rebate savings on their new products as a means of attracting customers. Zeus Kerravala, vice president at the Yankee Group, has said, "For companies that have not been in a particular market, rebates are basically a return to customer money is a great way to get people to notice them.This is especially true in consumer electronics, brands are important.This is a good way to get customers to take advantage of new brands. "
Benefits and costs for consumers
Rebates can offer cheaper rates to customers. Hunter sites often showcase the benefits of rebates in making affordable technology: "Rebates are the meat and potatoes of the latest technology deals, no matter what you buy... They pay you money to buy their things. All you have to do is take it."
According to research in 2011, 47% of consumers submitted discounts in the last 12 months, while a similar study conducted in 2009 showed that only 37 per cent of consumers had submitted discounts in the previous year.
Industry advisers claim that if the rebates are lost, they will not be replaced by "instant rebates" of the same amount due to the loss of the real benefits listed above (fiscal accounting, price protection, etc.) Steve Baker, vice president industry analysis for the NPD Group, commented that "This is a case of being careful of what you're asking for. You might see some great deals lost."
Rebates take some time and effort from consumers - finding out the rules, filling out forms, preparing and delivering mails, cashing checks, taking down documents while this is being done. Thus, rebates can be considered as paid to perform this document and provide personal data to a company. Opportunities for delivering rebates that disappear or fail on some criteria may further reduce the expected outcomes of these efforts.
Consumers who are aware of this, and who value their time, effort, and opportunity costs above the rebate value may choose to intentionally ignore the non-instant rebates that require the procedure and bear the price outside the door when considering a purchase.
On the other hand, if consumers do not see it in this way, if consumer income and budgets are very limited or nonexistent, or if consumers are more concerned about prices than they are for any reason, rebates can be seen as a good thing.
Another potential disadvantage to receiving a rebate is that the rebate does not return any sales taxes charged at the time of purchase. Thus, the consumer will pay more in taxes than if the price is only lowered at the time of purchase.
Exchange rate inconsistencies
It's hard to get a report on the redemption rates of most rebate companies, partly because of the rebel provider's reluctance to release confidential business information. Among various sources, radically different numbers on both ends of the spectrum can be cited. Part of the reason is that most "redemption rates" do not distinguish whether they are counted as part of total sales or additional sales .
- PMA, a marketing company, estimates that in 2005, $ 486.5 million rebates were exchanged. The average redemption rate is 21.1% when calculated as a percentage of total sales , and 67.6% when calculated as a percentage of additional sales . PMA Note, "This statistic shows that the exchange rate calculated as a percentage of total sales can be misleading when diluted by non-incremental sales, thus making the redemption rate seem lower than it actually is."
- Not all buyers remember to ship coupons, a phenomenon known in the industry as a damage , or a shoe box effect. Although it can be used interchangeably with broke , slippage is a phenomenon when the consumer has his rebate met, but he loses or forgets to cash the check. Some rebate companies can take a peek at a higher "redemption rate" including damage, while not calculating the potential slippage of unfrozen checks.
Some redemption estimates
- In November 2005, BusinessWeek forecast a 60 percent return rate. Some estimates have been as low as 2%. For example, nearly half of the 100,000 new TiVo subscribers in 2005 did not exchange their $ 100 discount, allowing the company to save $ 5,000,000 as an additional benefit.
- PC data in Reston, VA estimates between "10 and 30 percent".
- PlusNetMarketing in Wilmington, DE cites 80%.
- A representative in 2005 from The Marco Corporation stated, "In some cases we have redemption programs that reach as high as forty to fifty percent, but generally about one to five percent." In the same article, John Challinor, advertising manager for Sony Canada stated, "The industry average is less than ten percent.... and it can be as low as one percent."
- NPD Group, a marketing company, estimates 50% to 70%.
General complaints
In some large box stores, personal computers are regularly sold at substantial discounts, making the advertised price more attractive to buyers. Hardware manufacturers are also under fire. Dell, for example, has been the subject of a rebate complaint involving a misprinted receipt, potentially confusing expiration date, and a slow service representative.
The issue of rebates began to clog Dell's customer service forum, which caused the company to close some of it. CompUSA uses rebates on a regular basis until it starts closing the remaining stores in December 2007.
Mobile phone service companies, including big players like T-Mobile, as well as third-party retailers like Radio Shack, Wirefly, and others have received increasing attention due to the complicated rules of rebate redemption. Both operators and retailers make customers submit rebate claims for 30 days, often 6 months after mobile activation. Some authorized dealers have responded by trying to make the terms of the rebate more transparent, explaining that operators will withdraw payments from them if the customer stops from service before the end of the contract.
In 2009, Florida Attorney General Bill McCollum filed a lawsuit against TigerDirect, OnRebate, and TigerDirect parent company, Systemax, which weighed on the company by failing to deliver discounts to customers.
Rebates as a form of price discrimination
A common complaint against rebates is the claim that rebates can be used as a form of "price discrimination" against lower-class members who tend to redeem rebates rather than a more educated middle class. Sridhar Moorthy, professor of marketing at the University of Toronto also supports the theory of "price discrimination" between "price sensitive people and insensitive people". A different view, as taken by the BusinessWeek article, is that the rebate can be seen as a "tax on irregularities" paid by those who do not submit their rebates as opposed to those who do so. As mentioned above, rebates are also less attractive the more consumer value opportunity costs (time and effort) are involved in the submission of rebates.
Recent trends
Some retailers have taken a step forward by offering consumers new ways to easily deliver their rebates via the Internet, removing some or all of the email requirements. Staples, Sears, TigerDirect, and Rite Aid currently offer online shipping options for all or part of the rebates they offer. This particular rebate is usually identified as that and has instructions for full or partial online delivery. This is touted as more accurate rebate processing, reducing the potential for human or mechanical error and, in many cases, eliminating postage costs associated with traditional mail-in rebates, although some require UPC or proof of purchase to ship on. Most of these retailers still let consumers mail rebates.
In 2006, OfficeMax stores announced that they eliminated mail-in rebates from their sales pitches to get instant rebates for their sale price. The decision comes after a year of working with rebate and manufacturer vendors to improve the rebate process and receive a "very negative feedback" from their customers about their rebate program.
Instead of check, prepaid gift cards are given by many stores. Traders love this card, because they can not be exchanged for cash and must be issued. However, some countries require that retailers redeem the value of the card with cash if it falls below a certain level, such as $ 5 in Washington state. Many sellers are unaware of this and will refuse to give refunds. Consumers should be careful with expiration dates and read fine prints.
Typical American households utilizing consumer rebates save an average of $ 150 per year. More than $ 8 billion was re-issued to American households in 2011 alone with a rebate program.
References
External links
- The dictionary definition of rebates in Wiktionary
- Ã, Chisholm, Hugh, ed. (1911). "Discounts". EncyclopÃÆ'Â|dia Britannica . 22 (issue 11). Cambridge University Press. p.Ã, 949.
Source of the article : Wikipedia
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