A rebate

is a type of sales promotion used by marketers, primarily as incentives or supplements to product sales. The most well-known type is the mail-in rebate, an offer in which the purchase of a product entitles the buyer to mail in a coupon or receipt and receive a check for a particular amount, depending on the particular product, time, and place of purchase. Online Coupons

Rebates are heavily used for advertised sales in retail stores in the United States, such as Staples. Computer components and electronics seem to have a large portion of rebate sales. For example, an item might be advertised as "$39 after rebate", but the item actually costs $79 and comes with a $40 rebate coupon.

Although rebates are common in the United States and Canada, many areas of the world do not use them. Rebates can be offered by the retailer or the manufacturer of the particular item.
The turnaround time is generally four to eight weeks.

Rebates

Rebates have become very popular in retail sales. Retailers and manufacturers have good reasons to offer them:

Not all buyers remember to mail the coupons, a phenomenon known in the industry as breakage. While the return rate varies greatly depending on the amount of the rebate, the particular store, and the particular product, BusinessWeek recently estimated a return rate of just 60%. Some estimates have been as low as 2%. For example, nearly half of the 100,000 new TiVo subscribers in 2005 failed to successfully file for a $100 rebate, allowing the company to realize $5,000,000 in additional revenues.

Not all rebate checks are actually cashed, a phenomenon known in the industry as shrinkage.
During the turnaround time, the company can continue to earn interest on the money.
If the turnaround time crosses a financial period boundary, such as annual quarters, a rebate offer can be used to inflate sales at the end of a period, at the expense of the initial budget of the next period.

Extended warranties and other price-dependent factors always use the initial purchase price, not the price after the rebate.

If the rebate is from the manufacturer, the retailer has a "free" sale.
If the rebate is from the retailer, the manufacturer has "free" advertising.

Rebate can also be used to collect consumer information as it is required by most rebate forms for consumers to fill in personal or household information. This information can be used by producer or retailer to analyze consumer behavior.

Once the UPC has been removed from the box, retailers will not accept a return of the item. The inability to return a product (and therefore lose it's profit, however slim) is attractive to both retailer and manufacturer alike.

Rebates | Staples Easy Rebates | BestBuy.com Rebates | DirectTV.com Rebates

A rebate

Rebates | Staples Easy Rebates | BestBuy.com Rebates | DirectTV.com Rebates