FTC Tells CompUSA to Pay Up QPS Rebates 324
prostoalex writes "FTC told CompUSA they will have to keep their word on paying out rebates for QPS equipment purchased at CompUSA. QPS is currently bankrupt, according to the article, although it's not clear whether they went out of business before or after the promised 6-8 weeks deadline came. CBS MarketWatch says this should spur rebate re-evaluation among other electronic retailers. The habit of offering rebate incentives seems be especially notorious in the consumer electronics and computer hardware industries as a third of shoppers for such goods bought a product with a rebate offered. Reason for such popularity? 41% of shoppers never send in their rebates."
Retailers also like rebates because... (Score:5, Informative)
Retailers generally get to report earnings based on dollars brought in at the register, _then_ they pay out rebates. So even if 100% of customers send in their 50% off rebates, ACME gets to report $100,000 in widget sales, when really they only sold $50,000 in widgets.
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Staples Rebates (Score:5, Informative)
The rebates at Stapes are handled online very quickly and you have a tracking number to follow. Everything is upfront and out in the open.
I had one item that was disallowed this past Christmas and since it was online and there was recourse (email), the problem was cleared up within days. I had records on my computer and everything worked. Very nice.
This is too familiar (Score:5, Informative)
Damn statistics ... (Score:2, Informative)
If your read the very poorly written article, it appears that 41 % of those who missed out on the rebates just forgot to redeem them. There is no figure about how many people actually send the rebates, and no figure about how many of them did receive their payment.
Beside, the quoted article seem to be based on another article, whose link is broken
More info about the study behing those figures can be found here [npdtechworld.com].
Re:Rebates should be illegal (Score:4, Informative)
Of course, I'm pedantic about tracking this stuff. And I make a copy of everything I send in (including the stamped envelope). And I hand date the copy. Over the last 6-7 years of sending in rebates, I've received every single one. This is somewhere on the order of 50-60 rebates.
I don't really understand why my experience is so different than many other people's experience.
Re:Common sense (Score:3, Informative)
Costco does it right (Score:2, Informative)
Re:Here's my beef (Score:5, Informative)
Me: Why not just sell it to me for $1?
Merchant: Because I'm hoping you'll forget to send it in, and I won't have to pay you that $1.
You see? Its almost fraud but not quite. So from that viewpoint, I understand why people think it should be illegal to offer rebates.
OK, reality check here. In most cases it goes a lot more like this:
Manufacturer: "Thanks for ordering a pile of Acme Widgets, Mr. Big Box Retailer! Here's your shipment, and an invoice. You'll notice that the invoice says 'Net Due 60 Days, 2% Net 20' "
Retailer (to self): "Better pay that bill in 20 days so that we can get the extra 2% discount"
[retailers completely live or die on slim margins when the products are commodities like computer hardware, etc., so 2% is a lot over time]
Retailer (to self, 30 days later): "Gosh, I'm glad I've sold half of my Acme Widget inventory, but the rest is moving slowly, and I've got cash tied up in that pile of merchandise. Hmmm."
Retailer (to Acme Widgets territorial sales rep): "Help!"
Sales Rep: "Here's a pile of rebate coupons. Your customers will get $20 back from us if they buy something out of your stock, but they've got to do it this month."
[the sales rep knows that he'll only earn commission on another order from Big Box if he helps Big Box cycle inventory]
Retailer: "Dear customers: you can get a $20 rebate on this thing that we've already paid for, but that's between you and the manufacturer."
So, you get the idea. With some exceptions, the retailer isn't even involved, other at the marketing level. There are a million variations on this theme, and many things like this are planned in advance, rather than being treatment for slow-moving products. But a key concept is that the retailer often is dealing with the vendor at essentially normal prices and margins, and the rebate is used to move the consumer into action while the vendor (not the retailer) absorbs the profit hit. As retailers improve their IT infrastructure, you're seeing the coupons show up as direct-on-your-receipt printouts, and redemption is even flowing back through a service provided by the retailer. But it takes a big company to make all of that work smoothly, so mom-and-pop retailers usually just hand you the printed coupon from the distributer.
This can, of course, turn slightly sleazy, as cheesy retailers and their suppliers gin up the appearance of stock liquidation/incentives just so they can float on your money for a couple of months. That low-rent behavior can be avoided by not patronizing those distribution channels, and by rewarding quicker-acting rebate programs with your business.
how do you deal with the practical aspect of a system that has no ability to be corrected
The same way you'd deal with a supplier/retailer that won't address the fact that they sold you a defective product, or over charged your credit card, etc. If they have crappy customer service, make sure that you, your frieds, and all of your business contacts no longer do business with them. Places like Slashdot are fantastic forums for alerting people to unethical (or, ideally, stellar) retailers. Hence my praise of Costco, for example - their rebates are quick and easy.
Re:Huh? (Score:4, Informative)
Obviously you don't work in retail, distribution, manufacturing, or the IT support of those areas. It's not mumbo-jumbo, it's how it's actually done. Sorry if that doesn't help prop your take on this.
This doesn't even make sense
Sure it does. If the rebate is from the retailer then you apply pressure on the retailer. If the rebate is from the manufacturer, you apply pressure there. If the manufacturer is miserable about it, you can see if the retailer (as one of their dealer) is willing to help out, or you also apply pressure there.
Places like CompUSA have thousands of suppliers. Many of them (the suppliers) encourage sales through rebates. Most of those having nothing to do with CompUSA directly, and the cash flow that you mention doesn't change for CompUSA one way or the other (unless it's their own in-house campaign, or they've been recruited to get involved in the redemption process in some way).
Why is it inherently bad for the consumer? If every retailer (of the same size/buying-power) that sells Seagate drives pays Seagate essentially the same price for the products, then the price you pay at the register is determined only by how low a margin the retailer can stand while trying to remain competitive. If the manufacturer sweetens the deal (for YOU, not CompUSA) by throwing a rebate into the picture, that many stimulate sales for CompUSA, but it doesn't change what they have to pay Seagate for the products.
OfficeMax is a serial rebate abuser. (Score:5, Informative)
Officemax is a serial rebate abuser. They put all their rebate coupons in a little book with very small writing.
What you're unlikely to notice, are the absurd submission post mark dates. Often less than one a week after purchase. That's hardly time to even test the newly purchased equipment. To return a defective item, the packaging must be intact which precludes submitting the rebate paperwork on time. So they take advantage of the customers inattentiveness/work load to scam them out of their rebates.
Note: They'll often advertise the same item (with similar rebate) every month or so.
I love rebates... (Score:5, Informative)
First of all, I have a problem with banning anything - I think consumers should be able to evaluate if they like rebates or not, and purchase accordingly. I happen to like rebates.
If you are willing to take the time to fill them out and follow up when necessary, rebates can be good. I've gotten over $8,000 in MIR since I started keeping track (the excel spreadsheet is here [madanthony.org].
Rebates can be good in a couple ways. First of all, if you stack a rebate with a coupon with a minimum spending limit - ie a $20 off $100 coupon - you get to use the coupon and send for the rebate. Secondly, stores also offer FAR (free after rebate) stuff, and they aren't just going to hand you free stuff - but they will after rebates. Thirdly, sometimes through loopholes you can make out - I recently got paid $45 by Microsoft for buying OneNote - it was $55 from Amazon with a $100 rebate from Microsoft.
Also, if you are having trouble with a rebate, the rebate tracking forum on Fatwallet [fatwallet.com] is a great resource - you can learn which companies are good and bad about paying in a timely manner, and there is a sticky thread with contact info for most major rebate processors.
Re:Glad I don't have to deal with that. (Score:3, Informative)
But speaking as a USian, I hope sales taxes never become hidden like you suggest for the simple reason that all hidden taxes increase substantially. Any tax that is built into the price of the product grows massively. Whether it's a sales-like tax such as gasoline tax or cigarette tax or other forms of tax like income tax (believe me, income taxes would not be as high as they are if people had to pay every April instead of getting a refund for the amount that the government stole from them).
Also, adding on sales taxes is a great lesson about the evils of taxes (yes, taxes are a necessary evil) when they go to buy something marked 99 cents with their dollar and find they don't really have enough money. Harsh maybe, but not a lesson they're likely to forget.
Re:Common sense (Score:2, Informative)
Not anymore. [cnn.com]
Hey, I didn't vote for the idiot.
How to get a rebate (Score:2, Informative)
Re:Common sense (Score:3, Informative)
I do agree, though, that it is a pain. Bordering slightly on fraud, based on the fact that they don't keep within their time frame promised.
Re:too many too tight deadlines; get beyond 30 day (Score:2, Informative)
Some banks won't honor checks over six months old, and a few amount won't honor checks with a different expiration date...but many will, and you just need to slip it into the system once. Once it get into the computer, it won't be stopped, computers have no idea of expiration dates.
And if they accept it, they can't take it back out, even if they realize it later. It's not 'fraudulent', it's just that they failed to follow their own policy in what checks they would accept.
So first go to your bank and try to deposit it. (Not cash, just deposit, they pay a lot less attention to those checks, because if it's bad they can suck the money back out. Also note your bank has no incentive to care.) Then try their bank.
If all that fails, or you no longer have the check, you have the legal right to contact the issuer and demand they honor their debt. The check expiration was not part of the rebate rules...they still owe you that money.
Check expirations are mainly a scam. Don't fall for it. A check is not a contract, and just printing something one is explictly not legally binding under the UCC. Even if the check won't be honored by a bank, the money is still owed to you, and you can demand another check.
Re:Common sense (Score:1, Informative)
Same is true for sleazy practices such as using banners, arrows, colors, etc to confuse people to thinking the advertised price is lower than what the product actually sells for in cash.