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News & Record - 06/09/2006

Rebates bring complicated problems

By Richard M. Barron
Staff Writer

ConsumerAffairs.com offers these tips to get your rebate:

• When possible, shop at stores that have application forms on hand and provide duplicate cash register receipts. Circuit City, Lowe's and Costco are among these.

• Apply promptly. Many rebate offers are on a tight time frame after purchase. Don't leave forms on your desk for four weeks.

• When you mail in forms, ask for delivery confirmation from the post office. Keep a photocopy of everything you send in.

• Mark the date on a calendar when the rebate should be received and jot down a toll-free number and mailing address in case it doesn't show up on time, says FTC attorney Leslie Fair.

• If your mailbox remains empty, try calling the manufacturer directly, says Burrell. They want to keep good relations with customers and may intercede for you to make sure you get your rebate.

• When you get the check, cash it promptly.

• Most importantly, know yourself. Are you detail-oriented enough to follow the money? Will this exercise be more trouble than it's worth? Research has shown that when there's more money at stake, consumers are more willing to spend time.

-- Compiled by Dick Barron

When Gerri Patterson bought a printer and mailed a form for a $60 rebate to Office Depot in December, she expected a quick refund from her carefully prepared claim.

She had to fight for nearly six months to get it.

Like thousands of consumers across the country, she found that rebates are complicated, often with a common outcome: The consumer loses.

Rebates remain popular as a sales tool. The Promotion Marketing Association said last year that companies refunded more than $485 million in 12 months. In 2004, about 25 percent of computer hardware was sold with rebates, the group said.

But the picture is changing. Some companies are listening to consumer complaints by simplifying or dropping rebates.

And some big guns are coming to the aid of consumers.

Patterson's aid came from the state Attorney General's Office, which pressed Office Depot twice until the company sent her a check.

Electronics giant Best Buy is one of the first to listen to the complaints and critics. It's in the midst of a two-year plan to eliminate rebates by 2007.

"Our customers initiated it," said company spokeswoman Dawn Bryant. "They told us they hated the process. It's a long, arduous process, and people don't like to wait six to eight weeks."

The company is talking to its suppliers and has asked them to wind down the rebates by April 2007.

She said that Best Buy intends to hold down prices without rebates and will do what it takes to compete with companies like Circuit City.

In Patterson's case, Office Depot had said she failed to include the bar code from the printer that was required by the application.

But she says she's a stickler for detail and doesn't even make a purchase unless it's carefully planned.

So, she can understand a harried worker at the redemption center losing the small bar code cutout, but she was later able to send in a copy of the bar code as proof.

Even then, her claim was denied.

"When I sent in the copies that's what really made me mad," she said, "because the common sense person knew if I had the copy of the bar code I had to have it."

Patterson, who had worked in New York courts, the Greensboro Police Department, and now works for Syngenta, knew where to go: The state Attorney General's Office.

Nearly 50 other consumers have filed formal complaints with the Attorney General's Office, said office spokesman William McKinney.

Office Depot is near the top of the list.

"The leader board is four against Dell and three against Office Depot," he said.

Here's how many rebates work: Consumers see ads for cell phones, for example, reduced from $199 to $49. You have to mail in a request for a $150 rebate along with a receipt and often a bar code from the product box.

Critics say companies hope that consumers will forget to send in forms, will fill them out incorrectly or will forget about delayed checks.

Jeff Fischer, writing in themotleyfool.com, offered this satirical ad:

"New computer, $1,200! (After $200 mail-in rebate. Mail-in rebate must include your firstborn to claim rebate. We are not responsible for losing or not processing your rebate. You must allow 12 to 16 years for rebate processing.)"

The system is stacked against the consumer, say Fischer and Rob Thompson of the N.C. Public Interest Research Group.

"The consumer has no power in this relationship at all," Thompson said.

"If a company wanted to sell a product -- cell phones -- for 35 dollars, they wouldn't mark it up to 135 dollars and give you a hundred dollar rebate," he said.

Electronics manufacturers or retailers often hire companies whose only job is to manage rebates. Thompson said the companies with the lowest percentage refunded are the most desirable.

A spokesman for Dell, one of the world's top computer companies that uses rebates, said the company would not hire such a company and has not heard of such practices.

Mike Maher, a company spokesman in Round Rock, Texas, said Dell uses rebates at times as a way to cut prices for customers, but is aware of problems.

"We do know that on occasion it can be hard for customers to follow the kinds of directions that are involved with getting rebates done," Maher said. "And for that, we have regrets. We would like to help customers resolve those issues and get what is due back to them."

Thompson, of the Public Interest Research Group, said, "it's just extremely important for consumers, if they're looking at a rebate as a reason to buy a product, that they look at all the fine print to be sure they're going to be able to redeem that rebate."

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