Are You Being Held in Rebate Ransom – Sales Tactic #4

September 17, 2007


We have your money!  We’ll give it back if you follow these specific steps.  Make one mistake and we’ll keep the cash!

Sound like a ransom note to you?  Think again, it’s actually the crumpled rebate receipt in your wallet!  When you buy something with a mail-in rebate the seller is holding the money you “saved” for ransom.  The crazy part is that we willingly volunteer our money for ransom AND feel like we are saving money! The Rebate Ransom technique is the next trick we’ll discuss in the Sales Tactics Revealed series.[Photo credit ninjapoodle]

Three Strikes You’re Out
In the heat of shopping frenzy we’re overcome by the seeming great bargain and fall for the rebate, strike one. We pay full price and add the rebate to our “To Do” list. Life gets in the way and we put off submitting the paperwork, strike two.  The day before the deadline we rush to mail in the paperwork and overlook a minute detail in the fine print, strike three. We’re out the money!

If this sounds familiar, you’re not alone.  According to a Business Week article from 2005 an estimated 40% of people fail to apply or have their application rejected for rebates every year. This is a very effective tactic; retailers get us to focus on the discount price while still charging the full amount.  With so many people not redeeming their rebates for one reason or another they’ve found a way to offer discounts without actually honoring it almost half the time!

Warning Signs
• Only $1 after Rebate!   • Free After Rebate

Tactic in Action
I think most everyone has encountered this scenario at least once so an example probably isn’t needed.  Whether we’re too busy to mail it in, we lose the receipt, we don’t feel like sorting through the terms & conditions of each rebate, or the check just never comes there are many reasons why rebates fail to pay out.  Despite all these problems, we continue to fall for this sales tactic.  What can we do to protect ourselves against it?

Protect Your Paycheck
Rebate Reminder
Often times, the price after rebate really is a good deal IF you can get your money back.  Before you decide to purchase the item, schedule the date when you’ll mail in the rebate information.  Write the date the rebate is due on your receipt at the checkout counter.  Then when you get home login to Rebate Reminder and setup a reminder so you don’t let your money go unclaimed.

Time Is Money
Remember, time is money.  How much time will you spend getting back your money from the rebate company? Is it worth the money you’ll save? Sometimes it feels like sending in your rebate info is more paperwork than buying a house or doing your taxes!  Want to see how much time other people have wasted, just do a Google search on “rebate hell”.

What Box Do I Check for Tax-back?
When you purchase an item with a mail-in rebate you pay tax on the full price, not the price after rebate.  Guess what, there’s no box on the rebate form to check to get your money back. On a big ticket item such as home appliances, big screen televisions, or computers that tax can add up.  Remind yourself that you’re taxed on the purchase price, not price after rebate.

Sales Tactics
Rebate Ransom in the 4th sales trick in the Sales Tactics Revealed series. Make sure to familiarize yourself with the first three as well: Don’t Miss Out, You’ll Be Sorry, and Buy Now, Pay Later.  If you’ve gotten something out of this series, you can subscribe via feedreader or email for coverage of upcoming sales tactics.


Will this article help you save or earn more money? Get others like it simply by entering your email address below. Your email is used only for delivering daily money tips and you can opt out of delivery at any time. Click here to see all your free subscription options.


Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

All posts by


One Response to Are You Being Held in Rebate Ransom – Sales Tactic #4


  • My Black Friday Deal - Saved 50% From the Couch | Money Smart Life