Rebate (marketing)

An MIR entitles the buyer to mail in a coupon, receipt, and barcode in order to receive a check for a particular amount, depending on the particular product, time, and often place of purchase.

Rebates are heavily used for advertising sales in retail stores, and can be especially appealing to price-sensitive consumers by increasing their willingness to pay.

However, rebates are sometimes given in the form of "cashback offers" for mobile phone contracts or other high value retail items sold alongside a credit agreement.

Rebates can also be used by retailers to gain market share, by persuading more consumers to purchase their products and services over those of a rival company.

Consumers will need to provide any information that is required for the rebate, which often includes their phone number, name, postal address and a receipt (or proof of purchase).

The Federal Trade Commission (FTC) operates within the United States, and acts to protect consumers.

Steve Baker, vice president of industry analysis for NPD Group, comments that "It's a case of be careful of what you ask for.

"[18] Rebates take a certain amount of time and effort from the consumer – figuring out the rules, filling out the forms, preparing and dropping off the mailing, cashing in the check, all whilst keeping track of the paperwork in the process.

Chances of rebate mailing being lost or failing some criteria may further reduce the expected return on this effort.

At some big box stores, personal computers are regularly sold with sizeable rebates attached, making the advertised price more attractive to buyers.

[24] Rebate issues began to clog Dell's customer service forums, leading the company to shut down that portion of the website.

[26] Cell phone service companies, including major players like T-Mobile, as well as third-party retailers like Radio Shack, Wirefly and others have received growing attention due to complex rebate redemption rules.

Both carriers and retailers make customers submit rebate claims during a 30-day window, often 6 months after cell phone activation.

[27] Some authorized dealers have responded by trying to make rebate requirements more transparent, explaining that the carrier will withdraw payment from them if a customer quits service before the end of the contract.

From a study in 2009, collected data indicated that there was no increase in a consumer's willingness to pay for a product or service when there was a rebate available.

However, the data found that consumer's perception of the quality of the product or service decreased when a rebate was on offer.

[29] Some retailers have taken a step forward with offering consumers new ways to submit their rebates easily over the Internet, completely or partially removing any mail-in requirements.

[32] The typical American household that takes advantage of consumer rebates saves an average of $150 annually.