Why do manufacturers and retailers put products on REBATE instead of on sale at the rebated price?

[rnmcd]

Why do manufacturers and retailers put products on REBATE instead of putting the item on sale at the rebated price?

Secondly, do products that have rebates tend to drop in price overall in the coming weeks/months?

Thanks.

 

[Yossarian]

because only 2% of consumers actually send in for the rebate

 

[Evadman]

Originally posted by: PipBoy
because only 2% of consumers actually send in for the rebate

But PAB and RossMAN make up for them.

 

[Supermercado]

Originally posted by: PipBoy
because only 2% of consumers actually send in for the rebate

Is it really that low?

 

[MacBaine]

Think about it... you see "REBATE" and you think that it's cheaper... but by the time you buy it and get home... you say "I'll do it later"... and soon enough you've stopped caring about the rebate.

 

[MikeMike]

plus they get the money to begin with, and then make interest on that so they dont lose as much as a for sale item would, and the gov't loves it cuz tax is higher!


and the other reasons

 

[Zebo]

Originally posted by: PipBoy
because only 2% of consumers actually send in for the rebate

 

[jmgonzalez]

I read somewhere that the reason why they offer rebates is that they can consider the rebated amount as an advertisement expense on their taxes - more money for them since it's part of doing business in the eyes of the goverment.

I bought a PC dvd player at best buy for 60 bucks - it had 2 rebates of 20 bucks each.

I totally forgot about the rebates.

So, I paid 60 bucks for a dvd player! :-(

 

[rnmcd]

Originally posted by: rnmcd

Secondly, do products that have rebates tend to drop in price overall in the coming weeks/months?

Thanks.

?

 

[anaxo]

Because companies know that people are lazy, and often forget to sent them in.

 

[Zim Hosein]

Like everyone posted here, the main reason are:

1. They make interest on the inital cost [6-8 weeks average turn-around time for a rebate].
2. A lot of consumers forget to mail in the reabte or mail in the rebate, but don't follow the directions 100%, thus they still lose.

Rebates suck IMHO :|

 

[brtspears2]

It surely does get you in the store.

 

[AnyMal]

Originally posted by: jmgonzalez
I read somewhere that the reason why they offer rebates is that they can consider the rebated amount as an advertisement expense on their taxes - more money for them since it's part of doing business in the eyes of the goverment.

I bought a PC dvd player at best buy for 60 bucks - it had 2 rebates of 20 bucks each.

I totally forgot about the rebates.

So, I paid 60 bucks for a dvd player! :-(

Here is your well-illustrated answer folks!

 

[rnmcd]

Originally posted by: rnmcd

Originally posted by: rnmcd

Secondly, do products that have rebates tend to drop in price overall in the coming weeks/months?

Thanks.

?

 

[fonzinator]

Do you think any companies aggressively invest your rebate during the 6-8 week period? If I were a company offering mail-in rebates on my products, I would try this.

 

[dullard]

You all gave valid reasons why a retailer may have a rebate. But you forgot the #1 reason why a manufacturuer does rebates! Suppose I produce a product and sell it at $50 to retailers. The retailers have a markup and sell it to consumers for $60. As a manufacturer, I have no control over what the stores charge. Suppose I want to sell more of my product and I choose to cut it's price. So for a while, I sell it for $30 to the retailers. Guess what, nothing forces the retailers to cut the final price from $60. Many of the retailers will just pocket the $20 themselves. As a manufacturer, instead of selling more product, I just gave millions of dollars to retailers. My customers won't see a thing. Or I can keep selling it at $50 to the retailers and give a $20 rebate...