April 02, 2005
Best Buy to cease offering rebates

A few weeks ago DOL contributors batted around mail-in rebates - what are they good for, are they redeemed in a timely fashion, etc. The general concensus was that mail-in rebates were a disappointment.

I have had success with mail-in rebates - I have never been stiffed and I have never had to wait more than the time promised to receive the rebate. In my case, the rebate has always been a beneficial version of third degree price discrimination (I actually send my reate cards in while others do not).

All of that said, it turns out I am in the minority because Best Buy has announced that it will discontinue the mail-in rebate over the next two years:

[Best Buy] will phase out using mail-in rebates over the next two years, bowing to customer complaints. Its shares fell more than 5 percent.

With mail-in rebates, customers pay a higher price but get money back - sometimes hundreds of dollars - by mailing in copies of receipts and a form.

"Our customers are telling us they just hate the process," General Merchandise Manager Ron Boire said during a conference call to discuss the earnings report.

He described that process as "they send it in, they remain aggravated until they get their check."

The rebates have aggravated regulators, too. Wisconsin consumer protection officials last year looked into the rebates after 89 consumers complained, and Ohio Attorney General Jim Petro sued Best Buy in August in part over complaints about rebates.


Unfotunately, it is not clear whether or how much prices will fall after rebates are discontinued.

Posted by Craig Depken at 09:44 PM in Economics  ·  TrackBack (4)

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