Use that Rebate!

A rebate is a discount that you have to apply for through the mail in order to get it.  A rebate is used to tempt you to purchase a product and lure you into a store.  The thing about a rebate is that it takes effort and time to get it.  Both of these play into the hands of the products manufacture. 

They rational is that if it takes effort, most people will not bother doing it.  Actual rebate rates are very hard to get information on.  I’m finding that rebates are claimed at the rate of 2% to 80%.  That is a wide range.  The reason for this wide range may be to obscure the fact that this is a profit stream for the manufactures. 

One of the data sets that I looked at stated that nearly half of the TiVo subscribers in 2005 did not redeem their $100 mail in rebates.  The result, TiVo pocketed approximately $5,000,000 dollars. 

If you are considering purchasing a product because it has a rebate, make sure you read the terms carefully.  Many rebates come with requirements to purchase additional services with a required period of time that you must retain that service.

Many rebates require a little effort on your part.  As proof of purchase, you generally need to send in a copy of your receipt, any rebate documentation, and cut out the UPC bar code attached to the product’s box.  Yes, the actual code, no pictures or photo copies.  It looks like this.

So, is it worth the effort?  Everybody's choices and situations are different.  If it is a simple mail in with no strings attached, go for it.  Let’s check the value of your investment in the time it takes to sign the form, cut the UPC code, and drop it in your mailbox.  That should consume no more than 10 minutes of your time.  To let you know how much money you are making, take a look at the table below.  It simply shows you the rebate amount and how much that time spent equates to a salary per year working 40 hours a week.

Amount of Rebate	Annual Salary Equivalent
$10	$124,800
$25	$312,000
$50	$624,000
$100	$1,248,000

So, for all you TiVo subscribers out there who did not mail in your $100 rebates, for a brief 10 minutes of time, you missed out on working a job that had the equivalent of a 1 million dollar a year salary.  In the process of not redeeming your rebate, you made some stock holders very happy.