NSS:Best Buy will stop rebates

Nija · 04-02-2005, 12:20 PM

http://www.startribune.com/stories/535/5326006.html
(stolen from slashdot.org)
Retailers' love affair with mail-in rebates may be coming to an end.

In response to customer complaints, Best Buy Co. Inc., the world's largest electronics retailer, promised Friday to eliminate mail-in rebates within two years. Best Buy's rivals, including Circuit City Stores and CompUSA, are expected to follow suit.

"Our customers are telling us they just hate the process," said Ron Boire, executive vice president and general merchandise manager at Best Buy.

But it wasn't immediately clear Friday whether Best Buy would pass on the eliminated rebates in the form of lower prices, though several industry watchers said they expect the company to do so.

Mail-in rebates exploded onto the retail scene in the 1990s as a way for retailers to stimulate sales without lowering their sticker prices.

But in recent years, consumer groups have complained about the complicated instructions and onerous documentation requirements.

To obtain a mail-in rebate, customers often have to cut bar codes off boxes and send in other proofs of purchase from the equipment box, along with forms filled with personal information. One purchase may require sending in two rebate forms, one for the manufacturer and another for the retailer.

Even customers who successfully complete the forms must wait weeks to get their checks.

Last month, the Federal Trade Commission said for the first time that retailers could be held liable when manufacturers fail to honor rebate requests. The FTC said CompUSA told consumers that rebate checks would be mailed within six to eight weeks, but many consumers experienced delays of months and never got their checks.

"It's a tactical decision by Best Buy, and it fits into their overall mind-set, which is to match their actions to what customers find appealing," said Colin McGranahan, an analyst at Sanford C. Bernstein in New York. "And generally speaking, customers don't find it appealing to fill out mail-in rebates and wait three months for a check."

The promise of getting $400 back helped persuade Steve Denault to buy a $900 personal computer at Circuit City. But to get the money, Denault had to fill out three rebate forms, including one for the monitor and another for the central processing system.

"I think I can speak for the average consumer in saying that it's not a pleasant experience," said Denault, a senior research analyst at Northland Securities in Minneapolis. "It's unclear why retailers would continue a marketing scheme that annoys people when there are plenty of other promotional tools available."

In recent years, retailers have been tweaking their rebate programs to make them less frustrating. Best Buy, for instance, prints extra rebate forms at the register. In November, Staples launched a program that enables customers to receive rebates merely by entering the rebate-promotion number online, without any cutting or photocopying of paperwork.

Despite the improvements, the Council of Better Business Bureaus saw rebate complaints nationwide more than triple to 1,710 in 2003 from 515 in 1997. There is a widespread perception that consumers forfeit rebates because they are too cumbersome. In fact, more than 80 percent of consumers surveyed by NPD Group of New York last fall said they sent in their rebate forms.

"The vast majority of people do go through the trouble of mailing in the rebates," said Stephen Baker, director of industry analysis at NPD Group in New York. "But people are still wary about them. ... It only takes a couple of vocal people to make it seem like just about everyone was missing out on these rebates."

Ultimately, Best Buy decided the promotions have become more of a nuisance than they're worth. The company will eliminate rebates on its own, private-label products in addition to the rebates offered by manufacturers within 24 months.

"Part of the reason we think we can take this stop now is that we are substantial enough in the market," said Brad Anderson, vice chairman and CEO of Best Buy. "We will go to our suppliers and say, 'We don't want the rebates.' "

It remains to be seen, however, whether the decision will translate into better deals for consumers. By eliminating the promotion, consumers may end up paying more for certain products than if they received the rebates, Baker said.

"If you don't do a rebate, that gives the retailer and the manufacturer money to spend in other ways," Baker said. "It doesn't necessarily mean more money back to you."

Yet most analysts said they expect Best Buy to drop its prices to compensate consumers, and that will force other consumer-electronics retailers to eliminate their mail-in programs.

"I can guarantee you that there are five executives in a room at Circuit City trying to figure out what to do next and when to do it," said McGranahan of Sanford Bernstein. "If they're smart like Best Buy, they will realize that there are probably other promotions that would be a lot more effective and less frustrating."
----------------------------------------------

OC · 04-02-2005, 02:44 PM

What is a "central processing system"?

zippyjuan · 04-02-2005, 02:49 PM

They like rebates because they know that most people either do not send them in or don't follow up if they don't get them (which is why lawsuits were filed about not sending them out). Will they lower prices because they drop rebates? Don't count on it.

ialsohaveadream · 04-02-2005, 03:04 PM

Quote:

Originally Posted by zippyjuan

They like rebates because they know that most people either do not send them in or don't follow up if they don't get them (which is why lawsuits were filed about not sending them out). Will they lower prices because they drop rebates? Don't count on it.

Prices will probably drop a bit off of the regular retail, but not much. If a product cost $45 after a $15 mail-in rebate before, I'd expect it to cost $50-$55 with no mail-in rebate.

mcs328 · 04-02-2005, 10:56 PM

I've gotten my Staples Easy rebates in less that two weeks. It's really easy too. I doubt they'll lower the price enough to make it a deal. Isn't this the same company who didn't like bargain hunters anyways??

DarkFury · 04-03-2005, 12:38 AM

Quote:

Originally Posted by OC

What is a "central processing system"?

They probably are referring to the "box" itself... the PC without the monitor/keyboard.

You know how the uninformed call their box "the hard drive"... similar to that.

Merlin · 04-04-2005, 05:47 AM

Quote:

Originally Posted by mcs328

I've gotten my Staples Easy rebates in less that two weeks. It's really easy too.

I have to agree. The Staples rebate system is a joy to deal with.

doolittle · 04-05-2005, 11:26 AM

bestbuy got in trouble recenty for bad rebates. i stopped buying stuff there due to thier rebate policy. sounds like the the staples rebate program is the same as office depot's 2 weeks and you have your check.

04-02-2005, 12:20 PM	#1
Nija Chief of Naval Operations Join Date: May 2001 Location: City of The Dead Posts: 13,552	NSS:Best Buy will stop rebates http://www.startribune.com/stories/535/5326006.html (stolen from slashdot.org) Retailers' love affair with mail-in rebates may be coming to an end. In response to customer complaints, Best Buy Co. Inc., the world's largest electronics retailer, promised Friday to eliminate mail-in rebates within two years. Best Buy's rivals, including Circuit City Stores and CompUSA, are expected to follow suit. "Our customers are telling us they just hate the process," said Ron Boire, executive vice president and general merchandise manager at Best Buy. But it wasn't immediately clear Friday whether Best Buy would pass on the eliminated rebates in the form of lower prices, though several industry watchers said they expect the company to do so. Mail-in rebates exploded onto the retail scene in the 1990s as a way for retailers to stimulate sales without lowering their sticker prices. But in recent years, consumer groups have complained about the complicated instructions and onerous documentation requirements. To obtain a mail-in rebate, customers often have to cut bar codes off boxes and send in other proofs of purchase from the equipment box, along with forms filled with personal information. One purchase may require sending in two rebate forms, one for the manufacturer and another for the retailer. Even customers who successfully complete the forms must wait weeks to get their checks. Last month, the Federal Trade Commission said for the first time that retailers could be held liable when manufacturers fail to honor rebate requests. The FTC said CompUSA told consumers that rebate checks would be mailed within six to eight weeks, but many consumers experienced delays of months and never got their checks. "It's a tactical decision by Best Buy, and it fits into their overall mind-set, which is to match their actions to what customers find appealing," said Colin McGranahan, an analyst at Sanford C. Bernstein in New York. "And generally speaking, customers don't find it appealing to fill out mail-in rebates and wait three months for a check." The promise of getting $400 back helped persuade Steve Denault to buy a $900 personal computer at Circuit City. But to get the money, Denault had to fill out three rebate forms, including one for the monitor and another for the central processing system. "I think I can speak for the average consumer in saying that it's not a pleasant experience," said Denault, a senior research analyst at Northland Securities in Minneapolis. "It's unclear why retailers would continue a marketing scheme that annoys people when there are plenty of other promotional tools available." In recent years, retailers have been tweaking their rebate programs to make them less frustrating. Best Buy, for instance, prints extra rebate forms at the register. In November, Staples launched a program that enables customers to receive rebates merely by entering the rebate-promotion number online, without any cutting or photocopying of paperwork. Despite the improvements, the Council of Better Business Bureaus saw rebate complaints nationwide more than triple to 1,710 in 2003 from 515 in 1997. There is a widespread perception that consumers forfeit rebates because they are too cumbersome. In fact, more than 80 percent of consumers surveyed by NPD Group of New York last fall said they sent in their rebate forms. "The vast majority of people do go through the trouble of mailing in the rebates," said Stephen Baker, director of industry analysis at NPD Group in New York. "But people are still wary about them. ... It only takes a couple of vocal people to make it seem like just about everyone was missing out on these rebates." Ultimately, Best Buy decided the promotions have become more of a nuisance than they're worth. The company will eliminate rebates on its own, private-label products in addition to the rebates offered by manufacturers within 24 months. "Part of the reason we think we can take this stop now is that we are substantial enough in the market," said Brad Anderson, vice chairman and CEO of Best Buy. "We will go to our suppliers and say, 'We don't want the rebates.' " It remains to be seen, however, whether the decision will translate into better deals for consumers. By eliminating the promotion, consumers may end up paying more for certain products than if they received the rebates, Baker said. "If you don't do a rebate, that gives the retailer and the manufacturer money to spend in other ways," Baker said. "It doesn't necessarily mean more money back to you." Yet most analysts said they expect Best Buy to drop its prices to compensate consumers, and that will force other consumer-electronics retailers to eliminate their mail-in programs. "I can guarantee you that there are five executives in a room at Circuit City trying to figure out what to do next and when to do it," said McGranahan of Sanford Bernstein. "If they're smart like Best Buy, they will realize that there are probably other promotions that would be a lot more effective and less frustrating." ---------------------------------------------- __________________ "Nija is the dark soul of gotapex. We don't like to talk about him." - LPMiller

04-02-2005, 02:44 PM	#2
OC the admiral formerly known as overclocked Join Date: Aug 2000 Location: Outside the mainstream Posts: 5,922	What is a "central processing system"? __________________ But what is adulthood except a delayed end-run around our parents' better judgment? -- Peter Egan cough

04-02-2005, 10:56 PM	#5
mcs328 Admiral Join Date: Feb 2001 Location: Maryland Posts: 6,578	I've gotten my Staples Easy rebates in less that two weeks. It's really easy too. I doubt they'll lower the price enough to make it a deal. Isn't this the same company who didn't like bargain hunters anyways?? __________________

04-05-2005, 11:26 AM	#8
doolittle Lieutenant Commander Join Date: Mar 2005 Location: San Diego CA Posts: 910	bestbuy got in trouble recenty for bad rebates. i stopped buying stuff there due to thier rebate policy. sounds like the the staples rebate program is the same as office depot's 2 weeks and you have your check. __________________ Bill Gates "We'll never be as cool as them. Every conference you go to, there they are dressed in black, and no one is cooler!"

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04-02-2005, 02:49 PM	#3
zippyjuan Picture of the Day Guru Join Date: Oct 2002 Location: Sunny San Diego Posts: 8,756	They like rebates because they know that most people either do not send them in or don't follow up if they don't get them (which is why lawsuits were filed about not sending them out). Will they lower prices because they drop rebates? Don't count on it.

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