Rebate rip-offs - "Yea, you really are that gullible!

Come on, we all know the drill!

You go to the electronics store to buy a hard drive, the grocery store for diapers, your closest office supply store for copy paper.

Copy paper is copy paper, right?

Wrong!

The retail price of one brand attracts your attention. It offers the promise of a substantial saving based on the promise of a rebate. That promise often seals the deal and your decision of which brand to purchase.

But, there's the catch, it seems that there always is!

In order to receive the promised rebate you must send in an original sales slip between certain purchase dates, provide the original UPC symbol or proof of purchase, the original rebate coupon, and occasionally even make additional purchases to qualify.

You'll also need to use your bifocals, a magnifying glass and a strong light source to read the fine print on the rebate coupon. It seems no matter how annoying rebates are for consumers; the country's retailers and manufacturers love them.

And here's why?

Corporations that market their products with rebate offers are playing the odds and banking on our human nature. The industry's open secret is that fully 40% of all rebates never get redeemed because consumers fail to apply for them or their applications are rejected for one reason or another.

That translates into more than $2 billion of extra revenue for retailers and their suppliers each year. What rebates do is get you, the consumer to focus on the discounted price of a product, then buy it at full price.

"The game is obviously that anything less than 100% redemption is free money," says Paula Rosenblum, director of retail research at consulting firm Aberdeen Group Inc. http://www.aberdeen.com/

Credit this bonanza for retailers and suppliers partly to human fallibility. Many consumers are just too lazy, forgetful, or busy to apply for rebates: Call it a tax on the disorganized. Others think the 50 cents, $50 -- or even $200 -- is just not worth the hassle of collecting.

Companies claim stringent rules stop fraud, but ….

….. many consumers -- and more recently a growing list of state and federal authorities -- suspect that companies design the rules to keep redemption rates down. They say companies count on complex rules, short filing periods, repeated requests for copies of receipts, and long delays in sending out checks to discourage consumers from even attempting to retrieve their money. And sometimes when the check does arrive, it may get tossed in the trash because it looks like junk mail.

Rebate Abuse Spawns Special Industry Lingo

· "Breakage" - Purchases by consumers who never file for their rebates. · "Slippage" - Rebate checks that are never cashed. The idea of offering a rebate was pioneered in the 1970's by consumer products makers like Proctor & Gamble Co. as a clever clever way to advertise small discounts without actually marking the products down.

The popularity of consumer product rebates really took off in the '90s, as computer makers and consumer-electronics companies pitched them as a way to move piles of PCs, cell phones, and televisions before they became obsolete.

The value of rebates jumped, too, from a couple of bucks in the beginning to $100 or more today. Lately, with more companies than ever plugging rebates -- and with even more dollars at stake -- it should come as no surprise that consumer complaints have skyrocketed.

With billions of dollars at stake, attempts to regulate rebates and set uniform rules have met a ferocious response. But the consumer landscape is starting to change.

New Texas Rebate Law

On September 1, 2007, legislators in Texas put the reigns on rebate practices in the Lone Star State. Up until that time, Texas law did not regulate the amount of time that companies must send rebates to consumers, and consumers complained about long waits to receive their rebate.

Under the new rebate law, a company offering a rebate must mail the rebate amount to the consumer within the stated time period. If the company does not state a time period, it must pay the rebate within 30 days after the consumer submits a properly completed rebate request.

If a consumer submits an improperly completed rebate request within the appropriate time period, the company must either process the rebate within the time period as if it was properly completed, or the company must notify the consumer that the consumer submitted an improperly completed rebate request.

Under the terms of this new law, a "consumer rebate" is limited to an offer of cash, credit, or credit toward a future purchase in connection with the sale of a good or service that is $10 or more, and that requires the consumer to mail or electronically submit a rebate request after the sale is completed.

You can find the new Texas rebate law in the Texas Business & Commerce Code, Chapter 35, Section 35.43.

The Federal Trade Commission …

….. also issued cautions warning consumers against being "baited" by rebates that never arrive or arrive far later than promised. By law, companies are required to send rebates within the time frame promised, or if no time is specified, within a "reasonable" time. "Reasonable" in this case often is interpreted as within 30 days.

When purchasing a product that offers a rebate, the FTC encourages consumers to:

· Follow the instructions on the rebate form and enclose all required documentation in the envelope when filing for a rebate.

· Make a copy of all paperwork to be mailed when applying for a rebate. It's the only record a consumer will have of the transaction if anything goes wrong.

· Contact the company if the rebate doesn't arrive within the time promised.

And, if the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, your state's state Attorney General or your local Better Business Bureau.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help you, the consumer, spot, stop, and avoid them.

To file a complaint - https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_CODE=PU01 - or to get free information on consumer issues: http://www.ftc.gov/bcp/consumer.shtm - visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

My Take On Rebates

The more I researched this week's BoomerBikerOnline Tip of the Week, the madder I became. Bottom line is, that after what I've learned about rebates, …I'm now convinced that it's just "totally wrong" for corporations to conduct business in this manner. And I, for one do not appreciate being played the fool.

Therefore, my first inclination is to totally boycott any consumer product sold through the use of rebates.

But now that I've had a chance to sleep on it, my thoughts are clearer now and I'm ready to conclude this week's tip.

So, the next time your out shopping and the product you want to buy offers a rebate, first check at the register to make sure that the rebate can be redeemed at the time of purchase, otherwise walk away.

We all know that money talks and if the majority of we consumers begin to conduct our business in this manner, manufacturers will quickly get the hint.

Do yourself a favor and remember these words of wisdom the next time you're tempted by a rebate offer…

"Nothing is infinite, except the universe and stupid people, and sometimes, I doubt the universe." --- Albert Einstein

And that's exactly what corporations are banking on!

Catch you next week!