Many companies especially those in consumer electronics often offer rebates to try and boost sales. On the surface of it it sounds good, but the latest reports show customers are not so keen. In American society we tend to love instant gratification. The mail in rebate doesn’t offer us that and therefore may not make a significant difference in the purchasing decision. Also the concept of mail in rebates are a little deceptive as prices are often advertised after rebates. In order to receive these rebates the customer needs to purchase the product at full price. After completing the rebate form and enclosing information such as a receipt and product serial number they can expect the rebate in around 8 weeks. In essence the mail in rebate system is really a cash back system. Subsequently many consumers may consider it to be more effort than its worth.
The major reason companies prefer to use rebates is because they know they won’t have to pay out 100% of them. Many consumers don’t bother to redeem rebates and consider them a hassle. As a result consumers are turning away from products with rebates and looking for the instant savings. Currently companies advertise some of their products with rebates and others with instant savings. Companies obviously hope that the products with rebates are chosen, but by providing products using both systems they increase their chances of making a sale.
Dell are a manufacturer direct company. This means that the computer comes direct from the Dell factory and isn’t made until the customer places the order. Dell are a very popular choice because they allow computers to be fully customizable. Dell allows the customer to create their ideal system. Traditionally Dell have heavily used rebates, but all that is about to change. After some recent studies it has become clear that customers hate rebates and Dell are planning to scrap the system. Instead they will utilize instant savings and price cuts. This move clearly shows that they care what their customers think, as they are expected to lose out on the new system. In around 12 to 18 months the rebate system will be abandoned by Dell.
I personally have never been a big fan of rebates. I have to say that the initial price payed up front is the important thing. I praise the decision of Dell to remove their rebates and it may well end up pulling more customers to them rather than the competitors. Everyone prefers instant savings and I think companies would do well to considering following the example of Dell. The truth of the matter is customers do not like rebates and why continue to do something customers don’t like.