Slaying the consumer electronics rebate dragon

I took the bait. Circular in hand, I got up at 5 a.m. to get that “free” computer/printer/monitor bundle at Circuit City. Thus began my descent into rebate hell. When it comes to retail purchases I have come to realize that there are many different levels in rebate hell, but I went for broke on “black Friday” when I made a purchase that included not one, not two, but six different rebates.

There are five separate rebate forms to fill out (I declined the sixth, but I’ll get to that in a minute), each with slightly different terms and conditions to contemplate. I walked away with long scrolls of receipts, rebate forms and receipt copies to sort through, and three boxes with proof of purchase UPC and serial number labels pasted onto them, which I have dutifully peeled off with a razor.

What’s most puzzling to me, the lowly consumer uninitiated in retail marketing strategy, is this: why do high-tech electronics retailers like Circuit City rely on low-tech marketing mechanisms that are guaranteed to drive consumers crazy? So I made a note to ask an expert. But that’s getting ahead of things.

As it turned out, the “free” Emachine bundle wasn’t quite. First there was the cost of my time: two hours waiting in line, initially to get a voucher and then to ring up. Then I had to pay the full price of $679.93 with the promise that rebates would reimburse me 2 1/2 months later. Since I put the purchase on my credit card there will be interest to pay. Each of the six rebates covered a portion of the purchase price: $50 on the system unit, $50 on the Lexmark printer, $50 on the monitor - you get the idea. But one $250 rebate required signing up for one year of AOL dial-up service at $24 per month. This I learned at the register. The requirement to sign up for AOL on the spot also explained why it took so long to ring up: the hapless sales associate was struggling to register each customer with AOL in addition to ringing up the sale. To make matters worse, the system also kept going down.

Since I already have broadband I declined the AOL contract and forfeited the $250 rebate, which would have cost me more than $250 over the duration of the 12-month AOL contract. Still, the net purchase price of the computer after rebates was $250 for a $679.92 machine, a savings of $429.92. So I swallowed hard, and made a snap decision to buy the system anyway. After all, I had “invested” two hours of my time already and it was still a good deal, I thought.

When I got home I somehow spent another two hours sorting through the terms and conditions of each rebate I received and making copies of rebate forms, receipts, UPC and proof of purchase labels. One form said “no P.O. boxes” – an important gotcha. Although I don’t have rural route delivery, I learned to look for this condition on rebates and use my street address after a previous modem rebate was summarily rejected a few years back. I resubmitted the form with my street address but never did get that rebate, nor any response from the fulfillment house.

Most of the rebate forms requested a copy of the proof of purchase and serial number labels from each box, but one asked for the originals - in tiny, eight point thermal printed type. The rebates went to a third-party servicers in El Paso, Niagra Falls and Detroit.

I thought I was done. Then I added up the four rebates I had and came up $50 short. I called the store. Sure enough, a “computer glitch” failed to print up one of the rebates. I returned to the store, wondering how many others would notice the missing rebate before the offer ended.

Worried that I would be rejected for missing some unforseen requirement, I included a cover sheet with each rebate form, restating the terms and conditions and carefully attaching the correct paperwork. Although some rebates had the same physical address I sent each individually, since each had to be sent to a different “name.” Knowing how the fufillment bureaucracy worked in the past I became paranoid that there was a conspiracy afoot to deny me my rightful rebates over some technical error. I envisioned the person responsible for processing the Lexmark x2350 Bundle Offer - and only that offer - discarding the X2350 & PC, Laptop or Select Digicam offer I enclosed in the same envelope because I had the audacity to try to save 37 cents on an extra stamp. Or perhaps union rules would prevent him from servicing the second offer. Either way I'd be left holding the bag. And they'd all be laughing at me. 

Today I popped the rest of my Rolaids and  finished up mailed in all of the rebates. I have my life back. Now I just have to wait for the money to roll in. Here's the total tab: unreimbursed purchase amount: $250; my time: $100 (four hours at $25 per hour); credit card interest: $15.

Aggravation: priceless.

The grand total, assuming all rebates arrive without delay, comes to $365.

Rather than doing something productive with my newly freed up time, I decided to call Stephen Baker, a consumer electronics analyst with market research firm NPD to find out why the retail masterminds came up with such a scheme. Why use rebates at all? Or if you are going to do that, why not automate them on the Web?

He came up with some interesting answers. Baker was, suffice it to say, less than sympathetic to my plight. More on that tomorrow.

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