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.