Youâ€™re choosing between two products at a consumer electronics store. One has a mail-in rebate that reduces the price by $50. The other has no mail-in rebate. What do you buy?
Most shoppers pick the lower-priced product. In fact, stores like to advertise the price after deducting the $50 discount. But thereâ€™s a problem with mail-in rebates: They often go astray.
Thatâ€™s why Canadaâ€™s largest electronics retailer says itâ€™s eliminating mail-in rebates. Instead, consumers will get rebates instantly at the cash register at the time of sale, much like any other price discount.
The move is to be announced next week by Best Buy Canada Inc., which operates the Best Buy chain as well as Future Shop stores. Two years ago, Best Buy promised to work with suppliers to phase out mail-in rebates because of consumer complaints.
Hereâ€™s why mail-in rebates can be frustrating. You spend time gathering the paperwork and sending in your application, only to find the cheque is not in the mail. You spend more time tracking down the rebate, only to find you forgot to include something or the deadline for redemption has passed.
Many customers donâ€™t even bother to send in their rebate applications. Half of all rebates are never claimed, retailers say. The higher the discount relative to the product price, the more likely you are to spend time trying to get it.
What if other stores follow Best Buy and adopt instant cash rebates? Manufacturers say there will be more people getting the discounts. This means the discounts will go down. Instead of a $50 mail-in rebate, they will offer a $25 instant cash rebate.
However, Best Buy says consumers can expect to see prices remain low because the electronics industry is so competitive. Itâ€™s more likely that retailers and manufacturers will take a hit on their bottom line to get rid of this promotional tactic.
I think mail-in rebates have got to go. I prefer price discounts that everyone can get at the time of sale. So does Wal-Mart, which is becoming a big force in consumer electronics and uses an everyday low prices approach.
Say good-bye to pie in the sky and say hello to cash in the hand right away.