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Diligence makes rebates pay

©New York Times

© St. Petersburg Times, published November 15, 1999


Like many bargain hunters, Rosemary Forrest often goes to the trouble of mailing in rebate coupons when she purchases computer equipment. So when she bought a Microtek scanner in June from a catalog and sent in the rebate application, Forrest knew she would probably have to wait at least two months before seeing the $50 check in the mail.

Eight weeks later, Forrest of Augusta, Ga., did get something in the mail from the company that Microtek had hired to handle its rebate program. But instead of a check, it was a letter explaining that she had sent in the wrong bar code from the scanner box. What's more, she had a deadline two days away in which to send in the correct one or she would not receive the check.

"They can take eight weeks and they give me two days?" Forrest said. "If it hadn't been for the rebate, I would have bought a different scanner." Although Forrest mailed the correct bar code the same day, six more weeks have gone by with no check in sight.

Faced with falling prices and a stream of new products that threaten the already brief shelf lives of existing ones, manufacturers and retailers of computers, peripherals and software are relying more and more on rebates to attract customers. And for more and more customers, the experience of redeeming the rebate, such as Forrest's, is not a pleasant one.

Consumer protection agencies say they have received numerous complaints about long waits, rejections of rebate applications and sales of items after the rebate offers have expired. The problems are expected to get worse. "With all the rebate offers out there in time for back-to-school and the coming holiday seasons, we expect to see complaints about rebates increase as the year ends," said Debra Martinez, chairwoman of the New York State Consumer Protection Board.

Retailers say they are aware of consumers' frustration with rebates and are taking steps to improve things. "We'd like to see the rebate system work better for everyone," said Suzanne Shelton, a spokeswoman for CompUSA, which has added a division to its technical support dedicated to handling rebate problems.

Manufacturers and retailers often turn over their rebate programs to fulfillment centers, companies that handle the paperwork from customers and mail the checks. The fulfillment centers say they have to adhere to stringent procedures to protect their business.

"A lot of people are unhappy with the way rebates are handled, but it's not going to change," said Frank Giordano, president of TCA Fulfillment Services in Mount Vernon, N.Y., which manages rebate programs for computer hardware retailers and manufacturers, including Tiger Direct, Sony, Iomega and PNY Electronics. "Our clients give away millions of dollars a year, and it's very easy to duplicate receipts and other proof-of-purchase materials. We have to take every step we can to protect our clients' interest." These steps include rejecting incomplete rebate response cards and anything but the original bar codes, Giordano said.

Debbie Kemerer, a marketing specialist at Microtek, said it was not unusual for customers to send in the wrong bar code from the box, as Forrest did. But Kemerer says Microtek usually allowed the customer at least two weeks to send in the correct code.

Mail-in rebates have long been a part of the computer industry. Software can include rebates for $5 to $20, while printer and scanner manufacturers might offer $50 back on a $149 product. But the latest incarnation of offers, where customers can get up to $400 back on new computers when they sign up with an Internet service provider, have significantly upped the stakes in the rebate game.

America Online, for example, has formed agreements with several computer manufacturers, such as Compaq and Packard Bell, to offer $400 rebates when a customer commits to three years of CompuServe Internet service. Many other such agreements exist between small and large computer manufacturers and Internet providers.

These larger rebates have been offered for only a few months, and consumer organizations say it is too early to say whether purchasers are encountering the same kinds of problems with getting their money as with smaller offers. But consumer advocates say there is another kind of problem with these PC-Internet rebate offers: Such offers often are presented in a misleading way.

Shelton, of CompUSA, says the company's advertisements for PCs with Internet-related rebates list details about the charges at the bottom. "There's a lot of information to be conveyed in our ads, but we try to do it in the most straightforward way we can," she said. "It's a good deal for a lot of consumers, and we think we're disclosing all the terms. It's not in our best interest to do otherwise."

While some consumers have grown to dislike rebates, manufacturers and retailers like them, largely because many consumers never redeem the coupons.

"Manufacturers love rebates because the redemption rates are close to none," said Alan Schachter, vice president and general manager of Datavision, an independent computer and electronics retailer in New York. "It's just human nature that we go after them, and they get people into stores, but when it comes time to collect, few people follow through. And this is just what the manufacturer has in mind."

Although they do not release redemption figures, many manufacturers say they have higher return rates on rebate offers in the higher dollar amounts. "We generally see greater consumer redemption rates with rebates over $100," said Sherri Snelling, a spokeswoman for Canon Computer Systems, which offers rebates on many of its printers, fax machines and multifunction products.

Whether the new, larger rebates on computers will encourage consumers to redeem more rebates remains to be seen. The important thing, Martinez said, is to look at the dollar value of the computer. "Don't assume it's a great deal just because it has a rebate attached to it."

Consumers who redeem rebate offers complain that the process is long and complicated and often seems to involve almost as many steps as the preparation of a dinner:

1. Buy the product.

2. Find the rebate and complete the form (located in a store brochure, inside the box or, in some cases, on the Internet).

3. While the rebate form is simmering, find the original store receipt, circle the product purchased on the receipt and throw it in with the rebate form.

4. Cut out the bar code on the box, attach it to the other items, and mail it all in to a fulfillment center within a certain window of time.

5. Stew for eight weeks.

Retailers also can confuse the issue by advertising manufacturer rebates that have expired by the time the customer walks into the store. "I used to go the rebate table at Sam's Club looking for bargains several days a week," said Tom Reed of Fort Pierce. "But lately I've noticed that most of the rebate packets are expired. When you look at the fine print and see the printer without the rebate, the deal doesn't seem so great."

Elda Scott, a spokeswoman for Sam's Club, said the retailer was phasing out the rebate tables. To help keep control over expiration deadlines, she said, the company is instead mailing out fliers that advertise a collection of rebate offers. By letting customers fill out one rebate application for all the advertised products, the fliers also simplify the rebate process, she said. "Instead of sending forms to each different manufacturer, the application goes to one centralized fulfillment center," Scott said.

Consumers also can run into problems when they try to follow up on their rebate requests by getting in touch with fulfillment centers. Forrest found that the address for where to send her rebate was in a different location from the office with the phone number she called at Microtek to complain when she had not received her check. "It seemed like there was no correspondence between the two, which really set my teeth on edge," she said.

Taking the long waits and particular manufacturer requirements into account, consumer advocates say that reaping the benefits from computer hardware and software rebates requires tremendous reserves of patience and organization and a laserlike focus on the fine print. But it can be done.

Tim Duffy, a consumer advocate in Covina, Calif., is a satisfied rebate customer who has a file cabinet full of rebate documentation in his office. Duffy has saved more than $1,500 on computer equipment and software with rebates, he said.

"Most people procrastinate, and companies will profit from that," he said. "But if you work at it a little and stay on top of the deadlines, you can really have fun with it."

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