Rebates [Re: good local motherboard source?]

[Mark J. Dulcey]

Kent Borg wrote:
> 
> I think the rebates are designed by the same folks as do the
> fulfillment--all as a big package deal.  The idea is for the rebate to
> be a promotional tool that doesn't have a very high consumer
> compliance rate (otherwise why not just lower the price?).  There is
> probably a conflict of interest and an incentive for the fulfillment
> house to "lose" some submissions.

Actually, there are two other reasons for using rebates.

One is the fact that they're usually limited to one per customer. They 
thus serve as a way to stimulate consumer demand without giving a price 
break to larger business customers. Price discrimination that favors big 
customers is easy - just give volume discounts. Price discrimination 
that favors small customers is harder to implement; rebates are one of 
the few ways to do it. (Purchase limits are another, but you can get 
around them by simply visiting the store more than once.)

Second, they are a way to improve current profits (by stimulating sales 
right now) at the expense of next quarter's profits (when you actually 
have to pay out the rebates). If a company has some reason to want to 
plump up its current numbers, rebates can be a way to do it.

But yes, it is true that they count on less than 100% redemption by the 
customers. The way to win at the rebate game is to make sure that you 
are one of the part of the customer base that actually claims them.