Don't fall for rebates unless you're an organized shopper

rebate formsI bought a new computer recently, and was pitched by the salesman to spend $100 for a "free" printer to go with it as a rebate. I declined, figuring that the $100 rebate wasn't worth the hassle of mailing back forms and receipts, then waiting at least a month for my money.

Whether just lazy or unwilling to deal with rebates, only half of the people who get rebates redeem them, according to research by Kimberly Palmer, author of Generation Earn. From free printers and smartphones to a few dollars off a bottle of scotch, unless consumers are ultra-organized and mail in the necessary forms immediately, it's better for them to stay away from the rebate offers, Palmer said.

"They should look at the price upfront, because actually that's the price they're going to pay," she said.

Retailers are counting on lazy shoppers to not redeem the rebates, which are most popular on electronic items. There are many roadblocks that stop people from redeeming, including losing forms, filling the forms out incorrectly, not following up when they don't get the money, forgetting about them in the average six to eight weeks it takes to receive a rebate, and even throwing the unopened rebate check in the trash because it looks like junk mail.

"Companies take advantage of the fact that a lot of people either 'forget' to send in their rebates, don't want to bother with it, or don't know how to even do the rebate," said Rachel Rodriguez, in an e-mail to WalletPop, after she lost out on a $100 rebate that would have made her Verizon Wireless phone free.

"When I finished my purchase they didn't exactly explain how the rebate worked, so I figured I'll just look it up online or something when I got home," she wrote. "I completely forgot to do it that same day, and just simply kept forgetting to do it from then on. Finally, when I remembered that I still had the rebate and finally decided to do it, it was already too late! I was so upset. That could've been $100 in my pocket!"

"It's a pretty lousy consumer experience," said Kevin Johnson, CEO of Ebates, an online rebate service where shoppers can buy from retailers and get their rebates within mere weeks. "You think you're getting a low price, but you're not getting the low price at the end of the day."

"Stores like them because typically it's the manufacturer offering the rebate, and the store doesn't have to pay anything," Johnson told WalletPop in a telephone interview.

All of the steps are too overwhelming for Carrie Rocha, who blogs about how to save money.

"I have two rebate forms sitting right in front of me, at my computer right now and I doubt I'll get them mailed in," Rocha wrote to WalletPop in an e-mail. "I bought the items with the best of intentions, I even separated out my receipts that need to be mailed in along with the form and have everything together. But, sometimes I run out of motivation to complete the form, get a stamp and mail it when I know it'll just be a couple bucks back. The check, when (and if) it comes will need to be deposited in the bank and since I track all our expenses I'll have to key it into our accounting software. Bleh. Sometimes it just isn't worth it after all."

The perceived value of the discount is a big factor in determining if the rebate is redeemed, according to an Associated Press story. Few people bother mailing in a rebate form for $1 on a $100 purchase, according to a marketing study cited in the AP story. But redemptions rise substantially when the perceived value grows; such as a $1 rebate on a $2 purchase.

Redemptions also increase when people are handed the necessary materials at the register. When Rodriguez took her friend in to get a phone, the salesperson filled out the rebate forms right there for them. All her friend had to do was drop it in the mailbox. He got the rebate. What a difference a little customer service makes. If shoppers have to tear off a slip on a drug store shelf, redemptions go down dramatically. That's despite the negligible difference in the effort required to get the rebate.

For shoppers who try to jump through all of the rebate hoops, there can be plenty of problems along the way. Debra Jaliman told WalletPop that she filled out all of the forms to get her money back in a jewelry price fixing scheme -- including getting them notarized -- only to learn that the forms couldn't be mailed back until a year later. She missed the deadline by two days because she was distracted by her leg surgery, and lost thousands of dollars.

Some people refuse to do business with a company that has messed up their rebate. Sally Treadwell expected a $20 rebate from Best Buy for buying an iPod online on Black Friday, but the overloaded computer system kept crashing and her rebate wasn't given upon checkout. She remembered the rebate weeks later, but a Best Buy customer service representative denied the claim, Treadwell told WalletPop. She no longer gives Best Buy her business, she said.

Perhaps the best policy, considering human nature? Don't shop based on promised rebates. That's the easiest solution.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
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