The Checkout Chicks

Growing up, I remember my mother and father collecting the mail-in rebates they found from time to time and mailing them out in anticipation of a mailbox payday. I don’t remember a lot of mail-in rebates, but I do remember how meticulously they were about including the UPC cut-outs, the receipt and the rebate form.

Most people understand the general concept of mail-in rebates: manufacturers offer a cash-back incentive for purchasing their product if you mail in certain proof of purchase documentation within an allotted time frame. This lowers the end cost of the product and makes it more attractive to consumers. Many people will purchase the product with every intention of redeeming their rebate but never follow through. Manufacturers count on this low take-rate percentage.

Rebates are not limited to large ticket items such as electronics and appliances. Everything from a toothbrush, to grocery food items, to beer, to electronics can have a rebate if the manufacturer decides to offer the discount.

So if manufacturers are offering items at a deep discount - or even for free - when the mail-in rebate is used, how do they make money? Wikipedia offers some perspective:

Customers tend to notice price increases and react negatively. 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.

Rebates also allow companies to “price protect” certain product lines by being selective in which models or brands to be discounted. This allows retailers and manufacturers to move some product at lower cost while maintaining prices of successful models. A straight price reduction on some models would have a domino effect on all products in a line.

During the turnaround time, the company can earn interest on the money.

If the turnaround time crosses into the next fiscal year or quarter, a rebate offer can inflate sales in the current period, and not have to be accounted for until the next period and then it could be attributed as a cost reducing sales or expense for the next period giving companies an accounting advantage with their Wall Street projections.

Once the UPC has been removed from the box, retailers can refuse to accept a return of the item.

Check out the full Wikipedia article for more info and additional resources.

How does this apply to your stockpiling and grocery budget? If you are a savvy shopper, you already know that Rite-Aid offers a large number of mail-in rebates each month. Pair that with coupons and sale prices and you’ll find that you’re “buying” items for free or making money on them. Walgreens also offers monthly mail-in rebates. Over the course of the month, I’ll be posting detailed information on how to work the Rite-Aid and Walgreens rebate systems, explaining how they work and offering you some tips on how to maximize your return.

To put it in the most basic terms, here’s how you work your rebates:

• Find the rebates! Usually products are listed as “free after rebate” or “$xx after rebate” because the manufacturer wants to catch your eye and lure you into making that purchase. These are easy rebates. But sometimes there are hidden rebates and you have to do some research to find the rebate details.
• Purchase the product within the rebate time frame. You qualify for the rebate only if it’s purchased during specific dates. If you want to maximize your savings, you’ll need to stalk the sale papers and wait for the item to go on sale during that time period - unless the rebate has fine print that gives a minimum purchase amount.
• Use a coupon! If there’s a coupon available and the rebate fine print doesn’t disallow using one, use it!
• Immediately mail out your proof of purchase documentation when you get home. This is where most people trip up. It’s too easy to do it later and eventually you have waited too long. Mail-in rebates have an end date and must be postmarked by that date. Don’t lose out on your money because you forgot to mail your documentation in a timely manner. Always make a copy of your documentation before you mail it out. The rebate clearing houses aren’t perfect and it’s possible for documentation to get lost.

Rebate forms aren’t always sitting in front of the product on the shelf. Sometimes you have to go digging for them. Aside from the store shelf, were do you find your rebate forms? What are your favorite rebate websites?

Stay tuned — I’ll be posting more about rebates all month.

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