Why rebates suck and HDTVs are mad cheap now

The comic above pretty much sums up my feelings about rebates. I've been seeing them a lot lately and it's been pissing me off. Back in the day, I used to do them for a lot of things, from computer parts, to tvs, lcds, everything.

The concept behind a rebate is simple (I'm using an example from a purchase I made):
1. Pay the MSRP now for a keyboard, which is 90 bucks (old school Logitech MX Cordless Duo Elite Keyboard and Mouse...props to my bro for that one)
2. Store gives you a rebate or the package comes with a coupon for 30 bucks.
3. Send the manufacturer (in this case Logitech) the coupon along with the cutout of the barcode on the side of the box and your reciept to show you bought it.
4. Wait 12 weeks
5. Company sends you check for 30 bucks
6. Cash it in and you saved 30 bucks from your original purchase!

Why does this work? Companies will often do this to give you an incentive to purchase their product over a rivals. They know that their product will depreciate over a certain period of time so the value of the item will be less later anyway, so they'd rather have you you to pay the current amount and give you back that difference later just to claim a sale. This is the economical explanation at least. However, this isn't the best way to make money obviously since it cuts into your company's bottom line. That's where there darkside of the equation comes in, as according to this article from consumer reports, 40% of all rebates are never claimed. Companies take advantage of these people to make some of their money back. So what do they do to try to fluff out their margins on this? A couple things:
1. Make the time frame really short on the consumer end. Sometimes you only have a window a week or two to send it out. Let's face it: we have more important things to do.
2. Make some weird or somewhat difficult requirement. Or maybe you threw out the box and therefore lost the UPC code. After all, who keeps the box after they open something? Sometimes you have to go online and fill out a form to print out to send along with your coupon.
3. Make you wait a really long time and hope you forget about it. This goes back to the 40% number, but it could even be more sinister. Seriously, some companies will say that they've "lost" your paperwork and hope you've forgotten it until after the deadline has passed.

A few years back the Wall Street Journal did an experiment to try to buy different items and see if the rebates come back. You can find the article here. The result? Out of 5 rebates, only ONE worked without requiring intervention by the reporter. Check out the graph below from the article:




Sucks huh? So what can you do to protect yourself?
1. Don't play the rebate game. When looking at prices for stuff, ignore the rebates. You don't want to deal with the hassle and whatever money you might save you might not get.
2. Do the rebate ASAP. The longer you wait, the more likely you're gonna lose out on the money.
3. Keep track of your rebates in a spreadsheet. That way, when the time is ticking, you'll know when you need to call them and pester them about your rebate.
4. Keep copies of EVERYTHING. Document, document, document.

I stay out of the rebate process nowadays. Getting too lazy to try to save that much, plus I don't deal well with customer support. But it's still an option if you think you can pull it off. And sometimes, well, it's hard to say no to a $100 rebate on something you really want, like an external Hard Drive.

A quick note about HDTVs: DAMN THEY ARE CHEAP. I thought 800 was a good price point for a mainstream priced 42 inch tv. But I'm starting to see mainstream brands (toshiba, sharp, etc) start to dip into the Vizio price range of 600-700. Crazy.

I'll get around to writing more articles soon. Having a bug (NOT THE FLU), and Uncharted 2 out for the ps3 does not help things. Also, Modern Warfare 2 comes out next week. And I preordered the Night Vision Goggle Edition. I kid you not. Until the next article (hopefull next week in between games of MW2), stay smart and stay cheap.