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Monday, December 04, 2006

Why rebates

I can understand a manufacturer's rebate when you buy something from a box retailer. The retailer gets the sale price. The buyer submits the slip, proof of purchase, etc. and the manufacturer refunds the buyer directly. Manufacturer takes a chance on the rebate that not all that were offered will be redeemed. Those that don't get redeemed, the manufacturer keeps and is happy about. The retailer is long out of the transaction and is happy also, he gave up the goods for the money right away. No further accounting transactions required.

But when you go to the manufacturer's web site, and there is still a rebate, why?

An instant one sort of makes sense. The manufacturer moves the goods, gets the money. Buyer is happy with a good (better) price.

But a rebate requiring the form submission by the buyer to the manufacturer? The buyer just did the transaction directly with the manufacturer. Why require proof of purchase? Didn't the manufacturer get the purchase price and deliver the goods to the buyer? Why go through the additional transaction cost to process a rebate?

Unless the manufacturer is still playing the odds that some will not be redeemed?

Any marketing or accounting folks to help me on this one?

Am I missing something?

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