Rebate madness

Today's Crikey has a good poke at HP and Officeworks about rebates. Correctly, in my view, pointing out that advertising a product for $599 that actually retails at $699 and requires the customer to harass the manufacturer for a $100 refund is deceptive advertising. Crikey goes further to look at the process which involves finding the form on the website, downloading it, filling it in, posting it off and waiting months for the rebate to arrive.

I noticed the number of rebate schemes on offer at Ingram Micro's Expotech last week. It seems these are going to become common popular in Australia this year. This is not good for consumers.

Why would a manufacturer go to the effort of setting up such a scheme? Handling rebates involves all manner of costs in processing the claims, paying the money and dealing with complaints. Why not just knock a $70 or $80 off the wholesale price?

The reason is many, if not most, buyers won't claim the thing, an article two years ago in PC World claimed up to 60% of customers don't apply for available rebates and of those that do, half have problems. Of those that do, a good number will either mess up their application or the processing company will. Either way, the headline price is not what many customers end up paying.

Rebates a rotten idea. They rip-off the customer and they damage both the retailer's and the manufacturer's reputations. Careful shoppers and resellers who care about their reputations should avoid them.