Are Mail-In Rebates Worth The Hassle?

How much should the rebate have to be for it to be worth the time you spend on it?

I don’t think I’m the best shopper around because I don’t really like taking too much time mulling over the best deals. When I purchase something, I don’t necessarily get it because it’s on sale, or because I’m promised some sort of rebate. I also probably pay for things at higher price points than do many savvy shoppers out there.

The good thing is, I usually buy things only if I truly need them, and I don’t go on “sprees” very often, if at all. So this is how I primarily save — through abstinence.

But there have been occasions that I’ve come across rebates and have gingerly filled up those forms that will pay me back $10 here or $5 there after some ridiculous length of time. I have a spreadsheet where I keep track of these things (along with other annoyingly delayed credits) which extend all the way back to spring of last year.

Is it even worth it? Sure I’ve been enticed by the promise of a great price attached to an item on rebate, but I’ve come to learn that because of the relatively high pain factor involved in running after these discounts associated with the low cash back amounts, that I should really just ignore the effect of rebates on the whole sale. In a way, I almost think of the rebate process as “misleading” me as a consumer, because it makes me think I’m getting a discounted item when I’m really not; at least not until I bother with the rebate paperwork. When it comes to getting my money back, I want immediate gratification and I’m certainly not getting it this way.

The Real Story Behind Rebates

But the stores are harboring a little secret — they are out there to attract you to discounted items that only apply to a lucky few whose rebates are properly processed. Basically, there’s quite a number of people who fail to get their cash back, who are really effectively subsidizing those who DO get their rebate checks. See, even if you THINK you’ve sent out your forms properly, it doesn’t mean you’ll be getting your money back. Companies are counting on the fact that some people will abandon the rebate process entirely, or make mistakes in form filling; in so doing, they can avoid payouts and help their bottom-line.

This just shows how much the companies conspire against consumers by making things harder for them:

Consumer Action, a nonprofit group based in San Francisco, has even seen cases in which rebates required consumers to submit a fax number along with their name and address. “If they failed to include a fax number with their rebate, the whole thing was just discarded because it wasn’t complete,” said Joe Ridout, consumer services manager.

In another case, to receive a rebate for a software upgrade, Microsoft required consumers to send part of a box from a previous version of the software, Ridout said.

What a rip-off!

Here are the ingredients that make up the rebate:
Receipts, proof of purchase, forms with fine print and firm instructions.
Package everything, mail it then wait forever.

What are the chances that anyone would bother with all this or even get this right? And for what? A few measly bucks? I’d be curious to know what rebate amount you’d be willing to do all this work for. Small wonder some folks just give up entirely.

Why People Forgo Rebates

Interestingly, studies have found that quite a number of consumers feel discouragement. They acknowledge that claiming rebates isn’t easy and therefore, only 20% - 25% bother with going through the process. So what makes them balk?

• It’s just too painful.
  Many never even start the process because they are intimidated by the hassle. In fact, following directions can be literally impossible for some. Even if the spirit is willing, it’s still too much trouble and way too cumbersome to do.
• People lose the needed requirements.
  Customers misplace their receipts, forms, whatever. They also just forget. It’s too easy to lose track of yet another chore to worry about.
• People have to deal with delayed gratification.
  There have been cases when consumers have had to resubmit their rebate forms a half dozen times before they get a reply, if at all. I was stunned about how some people have had to wait a year for their $100 check; perhaps I don’t do this often enough to know that this happens.
• People are uninformed or unaware.
  Some aren’t even aware you can get your money back. What you don’t know won’t give you cash back.
• People make rampant mistakes.
  It follows that if the process is fairly complicated, then you will do it wrong. Wrong enough that your claim will be denied or discarded.
• People are distracted.
  There are too many things that take your attention from something as seemingly insignificant as receiving a few bucks back. Thus, we get distracted away from doing the claims.
• Following up is troublesome.
  Why? Because most rebates aren’t processed by the retailer selling the product. Also, imagine voice mail hell.
• Time runs out.
  Did you even know there was a time limit on these things? Also, there are certain terms and conditions (aka the fine print) that you may need to heed, or risk dismissal of your submissions. So read the full terms of any offer before making any purchases. On that alone, I’m pretty screwed as I’ve procrastinated too often on stuff I don’t like doing.

Many times, I will prefer to pay a bit more than to subject myself to the additional work. In this case, I will pay more to escape the inconvenience and to save myself some time. I’ve done this often, such as when I avoid crowds by NOT buying on the busiest days of the year where sales abound.

Fortunately for us, many stores are listening to the grumbling of their consumers by improving the rebate process. Some are slowing down the use of rebates or phasing them out within the next year or two. I was happy to hear that some are offering online rebates (also called “easy” rebates), Others are even eliminating their programs completely because customers weren’t happy with the promotions or the overhead of such a program wasn’t cost effective.

Well that’s all well and good because this subject is obviously a sore point among other writers in the financial blogosphere. Here’s a recent article that tackles the psychology of mail-in rebates. At any rate, I’m glad I’m not alone in feeling this way.

Also check the next installment on this series: How To Get The Rebate Checks You Deserve!

Some resources:
Motley Fool’s Rebate Expose
Rebate Ratings
Rebate Directory
Rebates and Coupons

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Categorized under: Frugality, Smart Spending