The idea of mail-in rebates is pretty simple. Offer the customer a better price based
on the fact that a large percentage of people will never get their rebate dollars.
Customers will either:
1) Not mail in their rebate
2) Not meet the requirements
3) Not cash their check
4) Have their rebate request rejected for invalid reasons.
Of course, it's #4 that really upsets people. I believe that most invalid rejections are
due to mistakes on the part of the rebate houses rather than fraud. Since I started
tracking my rebate at a website,
www.rebate-tracker.com, I have received all of my
rebates. About 10% of those required a phone call, and only 1 required me to mail
copies. I just scan everything and have a C:\rebates subdirectory on my hard drive
where I keep everything.
Depending on the amount of the rebate, the documentation requirements, and time
window for applying for a rebate, the redemption rate for rebate-eligible products
is somewhere between 20-40%. There are cases where it is lower or higher for
large amounts or very restrictive conditions, that that is about the range.
Interestingly, having a small redemption window actually increases the percentage
of people who send in their rebates, as a large window allows the buyer to
"put it off" and eventually forget.
For a meticulous rebater such as myself, this is a "cold deal". If mail-in rebates
disappear, I will pay more for products. For most people, this will save them some
money.
The rebate-processing business, however, will not disappear without a fight. It will
be interesting to see if this trend continues, and how rebate processors and
manufacturers react.