Rebates are a Scam

Anyone who's read Free Money Finance for more than 10 seconds knows how much I hate rebates (see Why I Hate Rebates, Why I Hate Rebates, Part 2, and How to Avoid the Rebate Runaround.) So imagine my excitement when I found out that the popular consumer advocate site Consumerist said that they think rebates are a scam -- yet another reason to hate them!

Their reasoning stems from a patent filed by the company that administers Circuit City's rebates. In particular, here's part of the filing:

"The rebate processing system provides a user friendly interface, yet retains hurdles sufficient to maintain breakage."

"Breakage" is the difference between the rebate amount consumers are owed and the amount they actually receive. In other words, if the company offers an item with a $5 rebate, they advertise the price of the item less $5 (for example $20-$5 = $15 final price) and get the sales bump associated with the lower price. Then, once they make the sale, they're hoping that there's lots of breakage -- that many consumers don't submit the rebate. And even if consumers do submit a payment request, the company still makes it hard to get their money (requiring certain items to be eligible for a rebate), thus adding more to the breakage. So, in the end, the company only ends up paying a rebate on a portion of the items they've sold with it.

On my last rebate, I called and eventually received the $20 I was owed, but, interestingly enough, I received a card from them a week later saying they had denied my submission because I didn't enclose the original UPC. I know I did -- but how am I supposed to prove it? I have a copy of it, but if I hadn't called earlier and received my money, I'd then be stuck in an I say/you say situation that I'm not going to win. They simply keep my $20 and that's that. More breakage for them -- what a rip off.

Now you can bet your bippy that I would have gone to Best Buy and used them to force Sandisk to give me the rebate, but at some point, the time and effort simply isn't worth it. See how these things can be a scam? That's why I'm not using them any more. I'm now shopping at places/for items that just give me the best price -- not ones that use tricks to make the price seem lower and then play games to make me earn money I'm owed.

For more information, here are some tips on how to be sure you get the rebate dollars you're owed.

Comments

[klauss]

"saying they had denied my submission because I didn't enclose the original UPC"

The same thing happened to me on a $100 rebate from Linens and Things. The service provider, The Express Group, said that I did not submit the original barcode. I did. When I called and said I would resend a copy I had made, they told me that it states I need the original. How convenient for them. Asked for a manager, was forwarded to an answering machine. I called again, with the same result. Not pleased

I have always wondered what would happen if I sent the bar code and then I had to take the item back to the store? The rebate could reduce the amount of returns for the item?

[Jeremie Beaudry]

I used to work for Circuit City, and Best Buy. Everyone hates mail in rebates, but the one thing that most consumers don’t know is that you are usually getting it below cost. I know it’s still an awful process, but companies are now switching to online rebate submissions; which will make the process much easier.

[Elomeda]

The biggest scam on the market is the rebate, I send a rebate for SanDisk offer bought it from Circuit city 3 month ago but no sign of respond