Rebates are widely used by all manner of businesses and manufacturers to stimulate interest in their services and products. They are different from straight discounts or coupons, as the benefit occurs after the sale instead of at the time of purchase. The amounts are similarly wide-ranging, from a dollar on low-priced consumer goods to thousands of dollars for cars and trucks. Companies also use rebates to sell overstocked or slow-selling items.
Rebate offers typically come in the nature of a form issued by companies to those who purchase their products, and usually carry an expiration date. Consumers then complete the form and mail it in, together with some sort of verification, such as a receipt or the package's Universal Product Code. These commonly go to third-party clearinghouses that provide verification and send out checks. Consumers who keep their eye out for rebate forms on packages and advertisements, as well as in retail stores, can often reap substantial savings.
Consumers find rebates to be a tangible benefit, and they can enhance the shopping experience. Another advantage is that the Internal Revenue Service considers rebates price reductions rather than income, so these transactions are tax-free. Manufacturers are continually drawn to use rebates as sales inducements and to increase visibility. Retailers like them because they help move merchandise and require no extra work on their part.
Additional Manufacturer Benefits
Manufacturers realize that many people will not follow through with the rebate process, so the initial enticement that may motivate a purchase often does not cost the manufacturer anything. According to USA Today: "On small items, actually retrieving the savings doesn't, for many, outweigh the time and effort required. An item advertised at $2.49 after a $1 rebate is really $3.49 at checkout. To get the dollar back requires the paperwork, plus 37 cents or more to mail it in. But even with a higher-priced item, such as a $150 inkjet printer after a $50 rebate, redemption is nowhere near 100 percent."
- Mr. Rebates
- MyRatePlan: Cash-Back Credit Cards
- MSNBC: Stores Like Rebates Because Shoppers Are Lazy
- USA Today: Rebates Motivate Consumer Choices
- Federal Trade Commission. "Rebates." Accessed Jan. 15, 2020.
- Maytag. "Maytag Rebates and Promotions." Accessed Jan. 20, 2020.
- New York State Division of Consumer Protection. "Refunds, Rebates, and Rainchecks." Accessed Jan. 20, 2020.
- Connecticut State Department of Consumer Protection."Fact Sheet: All About Rebates."Accessed Jan. 20, 2020.
- Georgia Department of Law. "Rebates." Accessed Jan. 20, 2020.
- Amazon. "Claim a Mail-In Rebate." Accessed Jan. 20, 2020.
- Maytag. "Submit Rebate." Accessed Jan. 20, 2020.
- Federal Trade Commission. "The Rebate Debate: Why Were They Late? FTC Settles Charges Against CompUSA." Accessed Jan. 20, 2020.
Robert Rimm graduated from the University of Pennsylvania and founded 88keys.com to provide education, writing and communications services for clients within the nonprofit, arts and education communities in the United States, Europe and Russia. His key interests include art and culture, social entrepreneurship, education, the environment and human rights. He is fluent in French and Russian, and is a widely published author.