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Rebate Scams

This article was written by in Consumer. 15 comments.


One piece of advice by those who love frugal shopping is to take advantage of rebates whenever possible. Many people followed this advice in the recently passed holiday shopping season. Most of those purchasers will not receive their rebates.

According to Senator Chuck Schumer, the most diligent customer who follows the complicated instructions exactly has only a 50% chance of receiving rebates from companies who contract with processing centers, intentionally chosen for their low rates of redemption. More customers will not follow the instructions, and some will not bother applying for the rebate.

The senator is calling on the Federal Trade Commission to standardize rules for offering rebates.

Companies count on not fulfilling all of the promised rebates, whether due to consumers not following the guidelines or “lost in the mail and forgotten about” syndrome. If rules are tightened, companies will simply not offer rebates as often.

According to Carol Vizant at Slate, rebates are worse when they’re offered by the retailer rather than the manufacturer. Manufacturers supposedly offer rebates because they don’t trust the retailer to pass on the savings. If a retailer is offering a rebate, why doesn’t the company t they just put the item on sale?

Consumeraffairs.com has even more information: “Over $500 million in rebates go unfilled every year, many due to deceptive practices on the part of the companies or their ‘promotions companies.’”

Jeff Fischer from The Motley Fool shares his take on rebates and finds:

I know for a fact that misleading, and perhaps even false, rebate offers are widespread. My experiences are part of what prompted this article. I’ve mailed six rebate forms in the last eight months. I’ve received nothing.

In my shopping, I’ve often found that if I wait, items offered with a rebate are often sold on sale after a month or two for the same price that would have been the net expense when taking advantage of the rebate. If that doesn’t work, there’s always eBay.

Update: Gerri Willis joins the discussion with five tips for getting your rebate: know the policy, follow the rules, watch your deadlines, track it online (myrebates.com is one helpful source), and be the squeaky wheel.

Updated July 16, 2010 and originally published January 3, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 15 comments… read them below or add one }

avatar Hazzard

I literally will not buy something if it has a rebate. As you mentioned, I’ve been pretty successful at finding the same product somewhere else without a rebate, especially when it’s the retailer that is offering the rebate.

The one exception to this is Costco. Because they have an electronic method for rebates, and I’ve always received the checks from them, I will buy items from Costco.
Hazzard

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avatar makelovenotdebt

We won’t buy electronics if they aren’t on sale; most of the time, the sale is through a rebate. Luckily for us, we have ALWAYS received the rebates that we have sent in. I’d like to know where that senator got that 50% statistic.

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avatar JLP at AllThingsFinancial

Although I TOTALLY HATE rebates, I have to say that I have never had a problem getting them. I think Chuck is trying to take a page out of Spitzer’s book by trying to find something to get all upset about.

As a customer, you have to pay attention.

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avatar Caitlin

Yeah, I guess I feel lucky too…I’ve always had rebates show up *eventually* — I have a harder time getting my health insurance claims processed properly. Maybe the senator could get on THAT.

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avatar Jonathan

I certainly wouldn’t mind some extra scrutiny on those rebate processing centers, I agree that their main purpose is to weed out rebates and pay out as little as possible.

That said, I’ve received every one of my rebates, although I’ve had to make some phone calls and fax in things before. I’m also pretty meticulous about making copies and marking dates. Zero out of 8 rebates sounds excessive.

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avatar jim

Anyone remember CyberRebates? :)

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avatar Dus10

I hate rebates too, but have used them many times, and only had a problem one time (and it certainly was my fault, because I knowingly gave them the wrong barcode from the product, because the other had been destroyed).

While I hate how it is used to advertise a “sale” price by retailers, I think the government needs to back off on this one. Capitalism prevails again, because look at what other commenters have stated, “I literally will not buy something if it has a rebate.” And I know many people who do that. It is a personal choice.

Now, if there is some false advertising going on, I can see litigation. However, maybe some group, besides the government, should create a rebate watchdog service… Hmm, there is an idea!

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avatar FMF

I currently have 4-5 rebates “out” to be reimbursed for. I hate them, but they can save $$$$. I have a system to track them and I ALWAYS make copies of what I send in just in case of a dispute.

BTW, Costco has a GREAT rebate system. It’s done online and you can track the status of your rebate.

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avatar fivecentnickel.com

I’ve never had trouble getting my rebates. Maybe I’m just lucky!

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avatar savvysaver

I have never not received a rebate, and I buy things with rebates all the time. I don’t see what the big deal is personally. I put a sticker on the form with my name, throw the form, the UPC, and a copy of the receipt in an envelope, and I get my money in a few weeks.

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avatar Hal

You want to see a reason to beware of rebates? Go here….

http://www.radioshackrebatefraud.com

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avatar Anonymous

Staples and Rite aid are one of the places that have great rebates. Those two stores deal with manufacturers directly. You can fill out your rebate online, low turn-around time. Tracking your rebates is a must. Takes only few minutes and even excel spreadsheet is enough. Just read around the forums, which rebates pay which don’t, how long it takes, etc.

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avatar Monica

I have requested rebates on everything from computer monitors to dog food–probably 10 in the past couple/three years, and I’ve received every one of them. I only had one problem once, where I had to call, but they eventually sent it. I don’t doubt that there are scammers out there, but I apparently have avoided them so far.

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avatar Mrs. Micah

I generally don’t like them…they’re much more of a hassle than sales. On the plus side, my Cingular rebate worked ok. They had us do the paperwork in-store which meant no mailing in later and no forgetting. It was in the form of debit cards–which can be really annoying but work ok if you use them for groceries.

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avatar DennyC

About 5 months ago I applied for a rebate on a computer fan from a company called Xigmatek when I bought the fan from Newegg.com. I have applied for many rebates and know that you need to read the rebate form completely. I followed the instructions to the letter and still have not received the rebate. This is a good way for companies to lose customers because although Xigmatek has some really good products, I will never purchase that brand again and neither will anyone that I know. Another scam is one from a company called Silverstone. I purchased a computer power supply again through Newegg.com and there is a rebate. The way they do it is to fill in a form from their web site and they are supposed to send you an email with the final form that you need to send in with proof of purchase and and UPC code from the box. I filled out the form about 4 weeks ago and have never received the final form in my email. Of course I checked the junk mail folder etc., nothing has arrived. Chalk it up to another rebate scam.

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