Rebate trickery, again

Many consumer products, like cell phones, computers, and so on seem to come with some kind of a [tag]rebate[/tag]. Buy now and get $50 back, and so on. I don't quite understand the business or marketing intent of this scheme.

I just switched my whole kit and kaboodle cell phone business from Sprint to [tag]Cingular/AT&T[/tag]. And as encouragement I get $50 off on each of the phones, at least so they say.

What I actually get back
  • A form that looks like a 1040 that has to be filled out in gory detail
  • A requirement to cut out the [tag]UPC[/tag] bar code from the box
  • Which I then have to place into an envelope, address and stamp and mail
  • Weeks late, I receive a little orange debit card pre-loaded with $50...
  • Which EXPIRES in 4 months
  • Which needs to be 'activated', requiring a 10 minute phone call
  • Which I then need to use when I purchase something. And who knows if that will work?
Hmm. What's going on here? Seems like they are hoping (or better, have calculated precisely) that a percentage of the eligible rebates never get collected. So they make it look like it's $50 off, but statistically it's more like $30.

Is this a good business practice? I suppose their statisticians and accountants say it is, but there's a real cost in brand loyalty and good will.

And it's not just [tag]AT&T[/tag] - everyone does it: Staples, HP in my personal recent experience, but lots and lots of others.

So the deal is: [tag]advertise[/tag] and promote a great offer and then place as many speedbumps and obstacles in your customer's way and hope that by inconveniencing your customers you recoup some of it.
Posted on August 23, 2007 and filed under Life.