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Rebates fuel sales, frazzle buyers
Washington Post Paul Saffo is a futurist with a headache.
Saffo, director of a Silicon Valley think tank called the Institute for the Future, is an influential tech pundit, but he has to get in line with the rest of us when it's time to cash in on rebate deals.
Take a CompactFlash memory card from Lexar Media Inc. that he bought in March. The card works fine, but he's still waiting on the $40 rebate from Lexar he was promised when he bought it.
His first claim was rejected because he gave his return address as a post office box. Subsequent calls -- most recently in June, July and August -- have been fruitless. "I don't care about $40," he said. "But it's become the principle of the thing.
Diane Carlini, a spokeswoman for Lexar, said via e-mail that the company couldn't address Saffo's problem without having the specifics. "We strive to fulfill each and every rebate offer issued for Lexar," she said.
Rebate offers abound in the consumer electronics marketplace -- it's not hard to find products that cost nothing after rebates.
For retailers and manufacturers, these offers are a quick and easy way to adjust prices in a cost-conscious market. There's little difference between one memory card and the next, so shaving a couple of dollars off can increase sales.
But instead of trimming a product's price, companies can offer a rebate and get much of the same sales increase -- without a corresponding dip in profit. How? Only 60 percent to 80 percent of customers send in claim forms for rebates, according to a firm that processes many of these forms, TCA Fulfillment Services Inc. of New Rochelle, N.Y.
The effort needed to get those rebate dollars back into the checking account has been a sore subject among consumers for years, and the situation doesn't seem to be getting much better.
David Heim, deputy editor of Consumer Reports magazine, recently bought two computers, a high-speed Internet connection and a printer for his kids. The purchases also got him eight rebates with a combined value of $300.
Though he hasn't received the rebates yet, he has spent a lot of time filling out the required paperwork. "It was easier to do my taxes," he said.
And like taxes, rebates don't seem to be on the verge of vanishing, even if a few retailers, most notably Wal-Mart, eschew rebate promotions.
"It's hard to see them going away anytime soon," said Stephen Baker, an analyst with research firm NPD Group Inc. He said companies find them "a pretty useful way to drive people to specific products."
When the rebate process is working at its quickest, consumers can expect to get a check in six to eight weeks. But what about rebates that slip through the cracks?
TCA President Frank Giordano said his company regularly gets calls from people asking about their rebates. Giordano said missing checks are usually the consumer's fault for not filling out paperwork or forgetting to mail it.
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