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Thread: Why do retailers offer rebates?

  1. #1
    L12 Sergeant lexington01's Avatar
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    Why do retailers offer rebates?

    Why not just drop the price?
    Just a thought.

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    L25 Major Erik's Avatar
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    The reason is probably because the rebates go to the manufacturer mostly, therefore the manufacturer is giving you the cash back. The retailers don't want to lower the price, and if they do, that's an instant rebate. Mail in rebates allow for the manufacturer to discount you, not the retailer.

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    L12 Sergeant lexington01's Avatar
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    In that case, how can they offer the free after rebate deals? We know the manufacturer cost is less than the store's price. So how can Hi-Val produce a modem for $4, you buy it for $20 at OfficeMax, then they send you a rebate of $20?
    Wouldn't the manufacturer be losing money?

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    Super Moderator Kage_'s Avatar
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    Re: Why do retailers offer rebates?

    Quote Originally Posted by lexington01
    Why not just drop the price?
    Just a thought.
    There are several reasons they do rebates instead of dropping the price:

    1. If you donít send in the rebate then they keep the money for the item. From a news program I saw they said a large number of people never redeem there rebates.

    2. When you send in your rebate you have already paid the money to them. So they can take as long as they want to send you your rebate. The longer they keep the money the more interest they earn on it.

    3. If you do not fill out the rebate form EXACTLY to the T then they can bounce it and then you have to call and fight to get your rebate. Some people are too lazy to call or some people just plain forget.

    I'm sure there are a few other reasons vendor/manufactures to rebates, but I'm pretty sure they are the major ones.

    Kage_

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    L25 Major Erik's Avatar
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    I agree completely.

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    Banned roy's Avatar
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    my thought is: Rebate is only for the product that been on the market for while. (example: DVD burner, when it frist come out it cost as much as $300, and now you can get it for $130. Let said the manufacture product 5000, The burner might just cost $50, so they made $$$ for those who bought in the beginning for those who bought Hi-tech new product, they are willing to pay for the hi price. The manufacture only have to sell 2500 to cover the cost, the rest of the just pure profit, so giving out the rebate just to collect the money for the new product or make there stock go up. They all bussiness peoples, they are not dumb, They don't just look at the $1.00 in the front. This way better getting a load from the bank. The guy who invent rebate is really smart! g2g, I hope you undestand it! Thanks for reading it! :D

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