Dear Dave,
How do cash-back rebates work on electronics and other items?
Dan
Dear Dan,
I like this question. Most consumers don’t think about how the process works. They only care that it’s benefiting them from a financial standpoint.
Let’s say you buy an item for $1,000, and you get a cash rebate for $100. Basically, you just paid $900 for that item, right? So, what the companies are trying to do is incentivize certain retailers to buy a particular product or amount of that product, yet sort of protect the sticker price in the minds of the consumers. To me, it’s really a little ridiculous. Why not simply take off the money and price it at $900?
That keeps retailers from jerking around with the margins. It purifies the process a little bit, but it adds to the hassle.
Good question, Dan!
— Dave
