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Best Buy to end mail-in rebates

Somehow this is just ... satisfying:

Retailers' love affair with mail-in rebates may be coming to an end.

In response to customer complaints, Best Buy Co. Inc., the world's largest electronics retailer, promised Friday to eliminate mail-in rebates within two years. Best Buy's rivals, including Circuit City Stores and CompUSA, are expected to follow suit.

"Our customers are telling us they just hate the process," said Ron Boire, executive vice president and general merchandise manager at Best Buy.

The whole notion of mail-in rebates nauseates me. Think about it from an economist's point of view: The arduous process of filing out and mailing in a properly completed rebate form (and making copies of everything so you can re-send it when they claim it never arrived) is absolutely worthless because nothing productive is being accomplished by either the consumer or the people doing the rebate processing.

It's just made-up work--work that nobody should be doing in the first place.

Additionally, rebates cause resources to be allocated inefficiently. Consumers spend as if a good costs one price, when the effective price of that good is substantially higher. This means that as a whole, our country is expending more resources on many things than it otherwise would if the true price of those goods were communicated. It's a drag on our economy.

I'm happy to see that Best Buy is taking a more holistic approach to measuring the effectiveness of mail-in rebates. It's a great PR move--one they should really play-up.

And I think it'll generate more business than will be driven away. People will know their sticker prices are slightly higher than the competition's, but it won't matter: they'll feel like Best Buy is shooting straight with them, so they'll shop there.

This move will make them a lot of friends.

(Via Slashdot)

Got my rebate on Saturday

It was for ten dollars. For a $40 (minus $10) wireless card I bought at the end of December. That's right, it took three months to send me a freaking ten dollar rebate.

They're getting rid of mail-in rebates. Good on 'em.

I bought a wirelss card from

I bought a wirelss card from Best Buy with a $40 mail in rebate. Now I've lost (or had stolen) the stupid I better be getting the rebate.

I don't understand the purpos

I don't understand the purpose of mail-in rebates. It doesn't seem that profitable to me for the companies to do it. For one thing, they have to have some team produce the idea and make sure it's legal and binding and everything else. So they get an extra ten bucks from the consumer, and hold onto it for a few months. Then they have to pay to issue and check and mail it. All this requires paying some employee to enter the information in, and extra work for the accounting area.

My friends suggest it's an interest-free loan for them, but unless they are huge sums (like, hundreds of dollars), I can't see it being worth their while, especially with the negative feedback.

Re: rebates

I just now got to thinking about rebates I've done in the last 6 months ... Sprint still owes me $150 ... and I believe CompUSA still owes me something like $50 ...

I'd forgotten all about both of them.

Oh, and eMachines has owed me $75 for about 3 years now. After something like 8 phone calls I finally gave up on that one.

motivation behind rebates

The interest-free loans part is definitely a factor, but more than that I'd say that most rebates don't end up being redeemed.

Oftentimes they purposely make the instructions complicated or deceptive so that people don't fill them out properly, in which case they don't--technically--have make payment.

ok ... here are some statistics I just found:

Sixty percent of study participants who failed to redeem their rebates said procrastination or forgetting was to blame, compared with 20 percent who said the redemption process was too much effort, and 20 percent who lost their receipts, mistakenly threw out the required packaging or faced some other constraint, he said.

Rebates are a popular marketing strategy of manufacturers because they boost sales yet result in little payout, since few buyers bother to redeem them, Silk said. They are most frequently used as a tactic to promote consumer electronics, where redemption rates, even on larger-ticket purchases such as computers and televisions, are well below 50 percent, he said.


What these companies really need to realize is that rebate-offers may look good on paper, but they burn bridges with customers. If businesses had a more holistic approach to doing their accounting they'd pay more attention to this trend.

re: sprint rebate

Don't worry Mason. The sprint rebate is coming. I just got one a couple of weeks ago.