Why do rebates take so long to process? (2024)

FAQs

Why do rebates take so long to process? ›

Communication and customer service: Rebate programs may have customer service representatives who handle inquiries, address concerns, and provide assistance to consumers during the redemption process. The time taken to respond to customer inquiries and resolve any issues can contribute to the overall processing time.

When the manufacturer pays up, the fulfillment house cuts the checks and mails them to the consumers. One of the largest fulfillment houses, TCA of New Rochelle, N.Y., lists slow-paying manufacturers and retailers as one of the key reasons why it takes so long for consumers to get their money.

Rebate management can be tough for businesses because rebates are accrued, or collected gradually over time, rather than accounted for upfront in an invoice.

"Between 40% and 60% of rebates are never redeemed," says Edgar Dworsky, founder and editor of ConsumerWorld.org. Companies ensure that the redemption rate stays low by making it as difficult as possible for consumers to claim their rebates. Here are some common tactics.

They're great for B2C companies that want to increase sales of a product without discounting it. To get the payment that makes the thing they bought cheaper, the customer has to do something. For mail-in rebates, this action generally involves mailing proof of purchase to the company.

Timescales. It usually takes somewhere between 5 days and 8 weeks to receive your tax refund. It will depend on a number of factors, including the system involved (for example by PAYE or self assessment), whether you applied online or by paper; and whether HMRC make any security checks during the process.

Rebates don't influence customer behavior

And because so many shops offer the same 10% discount, it does nothing to differentiate the retailer in a fickle marketplace.

Cons of Consumer Rebates

Delayed Savings: Unlike instant rebates, consumer rebates require customers to wait for the rebate to be processed and received. Lower Impulse Purchases: Consumer rebates may not be as effective for impulse purchases, as the post-purchase redemption process may deter quick decisions.

Promotional tools such as rebates and coupons are usually seen as different ways of price discriminating among consumers.

Both rulings highlight a fundamental principle: rebates that effectively reduce the purchase price of a product or service are not to be treated as taxable income.

Do customers like rebates? ›

Customers love rebates… or so we're told. What you'll hear is that 75% of people are more likely to make a purchase if they're offered a rebate.

Rebates offer retailers the benefit of giving customers a temporary discount on an item, to stimulate sales, while allowing it to maintain its current price point. This method avoids the negative backlash that could be perceived with a price being lowered and then raised later.

While companies sometimes take a loss on a rebated product, they often find a way to squeeze out a profit on them. And even when they do take a loss, customers who purchase items with rebates may buy other items in the store, giving the business a net profit.

Rebates do not currently violate the law, nor is any special company obligation being violated. It can be argued, however, that some rebate offers do violate the general moral obligation of fidelity.

They're way better for profit margins. In our example above, the rebate program costs 33% less. Savings will vary depending on the expected claim rate, but in general, a rebate is more cost effective than a discount even at a claim rate of 90%.

How to Decide If Mail-In Rebate Offers Are Worth It. Though mail-in rebates can knock a significant amount off the price of an item, be careful not to be lured into buying something just for the rebate. Stores may advertise the after-rebate cost to entice you to buy, but you'll be required to pay the full price upfront ...

Unlike immediate discounts at the point of sale, rebates are refunded after the purchase has been made. Rebates work on the premise of offering buyers money back following their purchase. This refund can be in various forms, like cash, credit notes, or future discounts on products and services.

Rebates are used by manufacturers, retailers, and service providers to encourage sales, reward customer loyalty, or promote specific products. The primary goal of rebates is to stimulate sales and encourage customer loyalty.

Offering customers rebates gives them an incentive to buy a certain amount of contact lenses. As such, rebates are beneficial for those who frequently buy contacts. Rebates shouldn't be confused with discounts and refunds.