The Rebate Scam

“You should have to advertise whatever price the customer is forced to pay to take the product out of your store,” I muttered to the cashier as I stormed out of Future Shop this morning. You’d think I’d be used to the rebate scam by now, but it seems that as time goes on, the details about the actual price get smaller and smaller on the price tag at the store. In this case, it was a webcam advertised for $14.95 in big bold numbers on the tag on the shelf … at the till, however, the cashier rang up $47.99. When I questioned the price, she suggested the rebate and we went off to check … sure enough, small print on the side of the label talked about the mail-in rebate.

In the end, it doesn’t seem like either Future Shop or Creative (the makers of the webcam in question) did anything wrong, legally, but I do have a couple of fairly serious objections to this sort of marketing. First, I think in-store advertising issues need to be addressed here. Imparting false information to a customer in a retail setting is a very serious issue typically, and if its done intentionally, I think it becomes very serious. The issues of rebates and how they are advertised in-store speaks directly to this point … a key point of trust between a customer and a retail outlet is that as I walk around the store looking at product, it should be easy for me to keep track of what my cost at the till will be. If the store ends up ringing up a bill that’s 300% higher than i expect on a regular basis, no matter WHAT the reason for it, my trust level for that store is going to drop significantly. Its up to the store to ensure they don’t surprise me at the till with a charge 300% higher than I expect, and that means advertising rebates in such a way that customers have no doubt as to the price at the till. Advertising the rebate is fair game, but the price paid at the till must be displayed at least as prominently as the rebated price, or else the store is guilty of misleading the customer. A price-tag on a store shelf is NOT supposed to tell me how much I will eventually have to pay for something … its purpose is to tell me how much I need to pay to leave the store with that product.

The second issue relates to the companies offering the rebates and making the products. Clearly, this is a good way to collect customer addresses for a database, and I think clearly, the mail-in portion is designed to be as inconvenient as possible, so as to allow a company to appear to be giving a savings without actually having to pay out on all those savings. It seems clear that one feature of savings in the form of mail-in rebates, for the company anyway, is that a significant number never get mailed-in, allowing the company to advertise a product for $14.95, and yet still sell a significant number at $47.99. Given the expense of running a program that verifies and mails individual $30 cheques to thousands of consumers, I’d be very curious to look at the books for a promotion like this.

In the end, there’s nothing really wrong with ‘deals’ like this, except that they shift the burden onto the customer while misleading them in the store. Its not a particularly nice way to treat your customers, and it seems rather the opposite of the notion “the customer is always right.” Ultimately, as I shop in a store, I expect to be able to keep easy track of what my cost at the till will be … I think at the very least, retail stores should be required to display the price at the till at least as prominently as any mail-in rebate price. Anything else is intentionally misleading customers, and that’s never the right way to treat the people who but the products.

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