When all was said and done, Nathan Womack figures he earned $5 an hour pestering AT&T for the $100 cellphone rebate.
“Some rebates make you jump through hoops and climb ladders,” the 32-year-old Lafayette resident said. “They certainly don’t make it easy.”
After hours of faxing and refaxing forms, proofs of purchase and receipts, Womack said he finally got his rebate check four months later.
“I can see why some people just give up,” he said.
As many as 60 percent of consumers eligible for a rebate never bother with the paperwork or online process, marketing experts say, leaving millions of dollars in unclaimed funds as pure profit to retailers and manufacturers.
There’s a chance it will change this year as tough economics push people to nickel-and-dime all they can in savings, but it can take an advanced degree in persistence to get the check.
Of the 40 percent of consumers who do apply for rebates, estimates are that as many as half are refused or never see a check.
And though rebate complaints persist, the manufacturers are offering them in record numbers.
“There’s not much change to the problems, but the size of the rebates are getting bigger and bigger,” advocate Edgar Dworsky of said. “That makes it more in the consumer’s best interest to follow through.”
Lure for shoppers
The objective of a rebate is to lure shoppers into buying the product, knowing that many will never go through the hassle of making copies and submitting them to acquire the funds.
“The cynical view is that rebate fulfillment houses are in cahoots with manufacturers and instructed to deny a certain number or more and see if people complain,” Dworsky said. “Frankly, denials of legitimate claims has happened so many times that I’d say it can’t possibly be a coincidence.”
Rebates are a consumer’s application for a sizable discount, so it’s no wonder manufacturers make it as difficult as possible to get.
The problem is that once denied, many simply give up.
“The reasons are varied and many,” said Womack, a self-professed “rebate king” who also helps clients find great technology deals that include rebates.
“It’s amazing how often you hear that something was lost in the mail,” Womack said. “My credit cards never get lost; my mortgage statements never get lost; but rebates and rebate checks seem to. I can’t figure that out.”
Problems, lag time
So why do they take so long? It’s because the fulfillment houses contracted to handle the rebates can’t mail the money until they have it.
And that’s only after the manufacturer sends it to them, usually within 90 days of the fulfillment house’s request.
Then there’s the lag time for the check to clear before your check can be sent.
Other problems crop up, too, such as the recent bankruptcy filing of Continental Promotions Group in Arizona, one of the industry’s biggest fulfillment houses. It’s unclear whether consumers will see any rebate money.
Consumers most often ask why manufacturers don’t simply reduce the price of an item instead of creating the rebate maze. The answer: economics.
“They can’t afford to give it away to everyone who walks in,” Dworsky said. “It’s like the Sunday coupons. You can’t just knock $1 off the box of tissues. They know so many people won’t follow through and only about 4 percent of coupons are redeemed. They couldn’t afford a 100 percent redemption rate.”
Although consumers can complain to their state attorneys general or the Federal Trade Commission, it’s pretty rare that either will file suit to recover unpaid funds. That’s because the companies eventually send the checks to avoid the legal hassle.
“It seems that their marketing and acquisitions section has a bigger budget than their customer-retention and problem-solution department,” mused Womack. “They want to get me, but not necessarily keep me.”
David Migoya: 303-954-1506 or dmigoya@denverpost.com
