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Thursday, January 25, 2007

On-Rebate – Are they ripping you off?

A lot of noise has been generated the past few weeks regarding On-Rebate (OnRebate.com) and their policies, especially from various newsletters and groups sponsored by Infoworld. In fact, some folks have gone as far to call OnRebate.com extortionists and scam artists.

The noise is centered on two specific issues:

  1. Transparency in the rebate process and high frequencies of rejected rebates.
  2. An “Express Option” that gets you the rebate faster, although it is at a 10-11% commission to the rebate house.

On the first issue, I can relate a few experiences. On-Rebate is owned by Tiger Direct (TigerDirect.com), which in the past has a reputation for frequently delaying, denying, and losing rebates of customers. I had this happen on a few occasions in a few years ago, and the process was frustrating.

However, I recently had a flawless rebate experience with On-Rebate. In November, I purchase a 2GB SD memory card for my Canon PowerShot G7 camera. With that purchase, there was a rebate for $30 on that particular card. After receiving the product, I proceeded to the OnRebate.com website and filled out the forms for the rebate, and they provided a print-out ready for mailing. I completed the mailing and within a few weeks, I had my $30 rebate check. Their website also accurately tracked and updated the progress of my submission (insert table here)

It was a flawless process, and I received my money from the rebate faster than I would have anticipated. So, while some folks may have some complaints still – my experience was excellent and my assumption is that they may have not have followed the directions accurately.

The second issue is a little more of a gray area. The first questions you have to ask is, what are you expectations when you buy a product with a rebate? Mine is that I will eventually receive the money back, after a couple of months. This can be frustrating, especially in larger dollar situations.

The next question is, what is it worth for you to jump to the front of the line? Would you pay an extra 10% on your dining bill to skip the two hour wait at your local Cheesecake Factory? Would you pay an extra 10% on your airfare to board a plane early or have a good seat? Would you pay a couple of dollars to valet park you car so you do not have to look for a parking spot? These are things that people either do or consider everyday. This is a personal decision for each of us. For me, the answer is no. However, for you the answer may be yes.

On-Rebate has simply made the decision that they believe it is worth 10% of your expected rebate for you to effectively do that, to move to the front of the line. I can understand how this might be frustrating, but it is by no means extortion as some people have suggested.

Where things get a little cloudier is when you bring PayPal into the picture. If you choose delivery of your funds via PayPal, for most folks that adds an extra 4%, so now you are paying 15% of that rebate to get it in a “more” reasonable timeline to deliver your rebate money.

Perhaps where the finger needs to be pointed is in the direction of the manufacturers. The manufacturers write the contracts with the rebate processing houses that specify the length of time they have to process and deliver the rebate checks to consumers. If the rebate houses have the ability to shrink those windows, then we should be pressuring manufacturers to negotiate those lengths.

Let’s realize though that neither the manufacturer nor the rebate houses are motivated to take such an action. Time is money, and the longer they hold onto the rebate check, the more interest they can collect. Its dollars and sense!

Do you agree? What are you thoughts on the latest rebate controversy?

Below is an excerpt from the article on Infoworld’s Gripeline.
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The idea of having to give the rebate house a cut strikes some readers as almost extortinistic. "If you give them a portion of 'your' money they will make sure that you will get your money faster," wrote another reader. "How is it that they can 'make it happen' if it takes at least
6-8 weeks for them to process it? If they can do it that quickly, why aren't they required to do that without extorting some more of it from you? I feel that it is my money and they should have to return it to me as quickly as they ...
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http://newsletter.infoworld.com/t?ctl=15EA7AB:0CA1139169C4469853DFA70FEC9AB64BEFF29049075316B4

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