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Consumers Playing Rebate Roulette This Holiday Season

December 22, 2005

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With holiday sales running a bit below normal, lots of retailers have slashed prices -- or have they? Many of those bargain prices on everything from cell phones and other electronics to groceries and toys are "after rebate."

According to a California consumer group, there's a reason why stores and manufacturers are increasingly advertising rebates -- applying for the rebate is a complicated and difficult task. Many people either don't bother, and those that do have trouble getting their money back.

Either way, consumers too often end up with no rebate –- and the company gets to keep the money.

"Rebates are becoming a rip-off," said consumer advocate Harvey Rosenfield of the non-profit Foundation for Taxpayer and Consumer Rights.

"Requesting a rebate is like filling out a federal tax return, except that the private companies have an incentive to keep the customer's money. Consumers need to comply with instructions exactly, no matter how complex, or they will end up spending far more than the sales price they thought they were paying."

Most advertisements show the sales price in big bold letters, and in smaller print attach the "after rebate" tag. Sometimes stores offer multiple rebates for the same item. Typically, when the shopper goes to the checkout to pay, they pay the higher, pre-rebate price.

Sometimes they are handed a special coupon or rebate form they must use, often they leave with few or no instructions about how to collect their rebate. None of the advertisements disclose the hoops that consumer have to jump through in order to collect their rebate. It's estimated that 10 percent of consumers don't send in the rebate request, and that 90 percent of all requests fail.

Here's how the rebate system works:

1. Filling out the form. A customer must fill out the coupon or rebate form with their name and address. Other information is often required. Rebating companies often reject a rebate application if the instructions are not followed exactly -- if, for example, the customer was instructed to draw a circle around the product, date or price on the sales receipt. Some consumers complain that rebate companies impose other conditions not stated on the rebate form, or will reject the form if it is "mutilated."

2. Attaching the receipt. Most companies require the consumer to attach the sales receipt from the store where the product was purchased. Copies often do not qualify. This means that the consumer must either make a copy of the receipt or send in the only evidence of the transaction. If the company says it never got the rebate form, the customer is out of luck.

3. Attaching the Bar Code or Proof of Purchase label. Most rebate forms require the consumer to locate the "Uniform Product Code" on the packaging –- a one-inch square bar code –- and attach it to the rebate form. Others require that the customer include the "proof of purchase" label from packaging. Just getting these items out of the packaging can be difficult these days, when so many items are "vacuum packed" in sealed, molded plastic. Too often, by the time the consumer fills out the rebate application, the packaging has been thrown out. Often, it is difficult to determine which label is being requested by the rebating company. And people who give products as gifts cannot get the rebate unless they ask the recipient to send them the packaging.

4. Mailing. Almost all rebates expire if they are not mailed within a certain period after purchase -– even if the rebate offer extends longer.

5. Wait. Getting a rebate may take weeks or even many months. Many rebaters will not send a rebate to a post office box. Some companies seem to never send a rebate until the customer calls asking what happened to their request. Others have reported that rebate checks are made out to incorrect addresses and then returned as undeliverable.

6. Make sure you get the rebate you are entitled to. We have seen instances where the company sent a smaller rebate than advertised.

7. Consumers often report problems obtaining the rebate, even if they have followed all instructions. Stores, and some rebate companies have an incentive to deny or misplace rebates: they get to keep the money.

How to Get the Full Rebate

Here are some tips for consumers on how to make sure they get their rebate.

1. Before you buy, check to make sure you will qualify for the rebate, and that the rebate has not expired. Confirm you have the rebate coupon and you are aware of all the instructions.

2. Fill out the rebate form exactly as instructed. Also make sure you use your street address, not a post office box.

3. Remember to keep all product packaging so that you can cut out the UPC or proof of purchase form. If you are giving a gift, you will not be able to collect a rebate unless the recipient gives you the UPC (bar) code after they open the packaging.

4. Don't delay -– mail it right away, and use adequate postage.

5. Always keep a copy of everything you send in -– even the envelope.

6. If you don't receive the rebate within the promised time period –- or six weeks –- or the rebate amount is incorrect, call the company or the rebate "fulfillment" center. (You may have to search the Internet to track down a phone number.) Keep a written log of all conversations and correspondence.

7. Be prepared to fight for your right to the full amount of the rebate

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