Please can somebody explain the point of rebates? I'm not surprised they don't appear in the UK much, as they appear to just be a pricing con.
The Palm Pixi will be launched next month, it has been confirmed. A low-end alternative to the Pre – reviewed here - Pixi was unveiled on 9 September. But it has taken US carrier Sprint until today to confirm that the phone will be available in North America from 15 November. Customers willing to sign a two-year service …
More substantially, can somebody explain how mobile networks can get away with charging that sort of money over in the US? A low-to mid-range phone, being sold on a 2-year contract, and STILL they want money upfront? Here in Europe for a similar sort of phone we'd be getting cash back from the retailer (yesterday I saw the LG Viewty FREE on a Voda 2yr contract (22.50 euros/month, about $30) with 150 euros cashback, and 2 free tickets to a dance festival thrown in for good measure.
Do Merkins really earn so much that money's not an object, or is it a question of monopoly pricing?
Please tell me!!
> they appear to just be a pricing con
Got it in one. It's to allow US companies to say, 'This lot is only $99*!' with '*$199 with $100 rebate'. That way, most people will spend the $200 thinking it's only $100, and the few who remember to jump through all the hoops, will get the rebate check months later, if it wasn't 'lost' along the way.
Rebates are a way to coax you into a deal with potential lower costs. In this case you pay $200 up front, with the manufacturer offreing to send you $100 after you make your purchase. and they will. This is an additional "sale" over whatever local merchants charge.
The catch for the consumer is that they generally have to clip the code off the box, and send in a copy of their receipt....then wait up to 6 weeks to get their rebate. For those who are good about doing this correclty and immediately they get a $100 additional savings.
The benefit to the manufacturer is that they can lure consumers in with the promise of hte rebate, knowing full well that <50% will ever actually mail in the rebate request. Generally hte larger the rebate the more likely the consumer will follow through. Smaller rebates have <20% follow through.
IF you follow instructions you can potentially get a larger rebate than would otherwise be available. The manufacters get to promise a bigger rebate and draw in extra sales knowing that in reality the actual rebate per unit sold will just be a fraction of what they offer.
Some stores have easy online rebates where you submit a form online....no paper, no postage. This is the preferred way to go and it's in the stores best interest to get you the rebate as it costs them nothing.
Does anyone care anymore? Palm screwed up in so many ways... "exclusive" deals, "exclusive" deals exported to Europe, semi-shoddy hardware on the Pre, the whole iTunes sync disaster, no WiFi on the Pixi (WTF?!), even more "exclusive" deals... And it all looked to good when they first presented the Pre. Could have been really interesting. Didn't happen, not for me.
Over the years I have seen plenty of rebate offers in the uk. I have read that several are dodgy or have colapsed. Here is a link to one story.
I personally would not go for some rebate. I half recall some scheme from 3 or orange where you had to post a coupon off every month for like 12 months to get your full rebate. I suspect the mobile cost is overpriced and they bank on the customer not bothering to claim the coupons or not pay the customer at all. I am sure there are plenty of customers who would swear by the schemes but am deeply sceptical. So I think your right, it could be a bit of a pricing con.
They are a con, and would almost certainly not be allowed under UK laws. For some stupid reason, you can state the price *after* all rebates are applied as the headline, attention grabbing price point and then hide the real retail price in the fine print. It's ridiculous that you can legally advertise something for say, $200 when the actual amount eventually charged to your card is substantially higher - sometimes $100 or more higher for high-value items.
Considering that some of them take 'up to' eight weeks, are processed by mail and returned not as a cheque but as a single use debit card, yes, they are a con.
Rebates are simple. Only about 20% actually comply. Actually, I think Carphone Warehouse used to offer rebates all the time, but had these strange requirements where you had to send in the 3rd, 8th, 12th, and 14th statements in order to get your rebate six weeks after you sent each rebate in. The adoption was something close to 22%. But people LOVED the idea of getting something for so little. So to answer your question, it is basically a win all the way around for the company for all but 20% of the population who get a great deal.
Probably well below 10% of customers will remember to claim a rebate several months down the line, so it's a way of pretending the price is low, while actually getting to keep most of the cash, plus you can earn interest on it in the meantime, even if people do claim 100% back (if it's an automatic pay-out).
I've seen studies at work, where small rebates after a year only get around 2-5% uptake...
It also means that if people don't stick to their contracts but keep the phone you lose less, and finally if the cashback is coming as a promotional tool from Palm via the carrier, it's just that Palm don't have the cash. I guess everything they get is being poured into ramping up production, so they can get into the European market as quickly as possible.
When I forgot to send in my new customer rebate, a call to my Verizon salesman had it deducted directly from my bill. it is true that a lot of companies count on people not following through, but it's also a way to build a contact list (of credulous folks, no less).
In general, if I see the word rebate, I skip it.
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