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Rebates 101: How To Ensure You Get What You Are Owed

Rebates offer cash back on purchases after you have bought the item. But how do rebates work exactly, and are they worth the hassle?

March 10, 2022

Retailers and manufacturers use sales tactics to entice buyers to purchase their products and services. They can discount the items, advertise them and offer cash-back rebates. 

Typically when a purchase is discounted, you simply pay the lower price for it at the time of purchase. Rebates work a little differently. 

We’ll cover the information you need to know about rebates: How do rebates work exactly? How do you claim them, and are they worth it? Let’s start with the basics.

What is a rebate?

A rebate is a type of purchase discount that is paid back after the customer has made the purchase.

For example, you may see a fridge advertised for $1,200 with a $200 mail-in rebate. 

In this example, you’d purchase the fridge for $1,200 at the retailer. Then, you mail in a form — or fill it out online — to submit a rebate claim, and then wait to receive the $200 rebate in the mail. 

Many rebates come in the form of a check, although some rebates may take the form of a gift card or other perk. 

How do rebates work?

Rebates are typically offered by the manufacturer of the product, but certain retailers or stores may also offer rebates. 

Typically, a rebate will be paid for and advertised by the manufacturer. Customers can purchase the relevant item from a participating retailer or directly from the manufacturer. Be sure to save the receipt! 

The customer can then submit a rebate claim, often at a digital rebate center or perhaps through the mail. 

The rebate form will typically request a proof of purchase, which is usually just a receipt or the bar code from the product’s packaging, or both. 

Once the rebate form is submitted, the customer must wait for the manufacturer to process the claim. 

If everything was filled out correctly, the manufacturer will then issue the rebate. This generally comes in the form of a mailed check. 

Rebate vs. discount

A rebate is similar to a discount or sale item in that it lowers the cost of the item you’re purchasing

The main difference is when the cost is lowered: With a discount, you simply pay less for the item upfront, and with a rebate, you pay full price and are then sent a rebate check in the mail. 

Rebates require a bit more effort, but they might offer generous savings. 

When are rebates offered?

Rebates are offered by the manufacturer usually as a way to sell more of the specific product. 

There are many reasons that a manufacturer may choose to offer a rebate. Perhaps they’re clearing out last year’s model before the new model hits store shelves, or maybe they’re trying to bump up their sales numbers for the next quarterly financial report. 

Rebates can be offered on any type of product or service, but they’re most common with certain types of physical products, like: 

  • Appliances

  • Home goods

  • Heavy equipment

  • Home improvement items

  • Vehicles

You’re unlikely to see rebates on clothing, food or other basic goods. 

What’s the point of rebates?

You may be wondering — why do companies even bother with rebates? It seems like a hassle, so why not just offer an upfront discount? 

Manufacturers love offering rebates because they can help them sell more products. Rebates are a marketing technique — and they’ve been shown to work well. In fact, one study found that 75.4% of customers were more likely to make a purchase when they were offered a rebate. 

Manufacturers also know that many rebates won’t be claimed. This means that they sell many products at full price and only have to issue rebates on a certain percentage of those. Data shows that approximately $500 million in rebates goes unclaimed each year.

We’re all busy, and filling out a rebate form can be a hassle. Manufacturers are well aware of this, so they offer rebates as a clever way to encourage spending with minimal cost to them. 

While rebates take some work on the customer's part, there are good deals to be had. 

How to take advantage of rebates

Informed consumers can take advantage of rebates and score some great deals in the process. It all comes down to reading the fine print of the rebate before you make the purchase. 

Pay attention to the details, such as:

  • How the rebate process works

  • When the claim period ends — some rebates have a very limited period of time when claims can be submitted

  • What form the rebate comes in — check, gift card, etc.

  • Where the rebate is available — some rebates may exclude certain states or countries

  • What proof of purchase is required — physical receipt, digital receipt, digital order confirmation, etc.

Most of the time, you’ll find this information at the bottom of the advertisement with the offer. You can also find details by going to the manufacturer’s website. 

How to file a rebate

How do rebates work when it comes to actually filing them? The details differ with each rebate, which is why it’s important to read the fine print on the offer. 

Generally speaking, the process involves:

  • Buying the product

  • Saving the receipt/proof of purchase

  • Filling out a rebate form online or a physical form sent in via mail

  • Completing all the necessary steps outlined in the rebate requirements

  • Waiting for the manufacturer to process the claim

  • Receiving the rebate check or gift card

Common mistakes when applying for rebates

Some professionals have estimated that between 40% and 60% of rebates are never claimed. What causes this? 

Forgetting to file the rebate

This one is simple: People just forget to actually file the rebate. Rebates usually require filling out a form, mailing it in, attaching proof of purchase, and so on. 

We’re all busy, and sometimes we simply forget. But remember, not filing a rebate is leaving money on the table. 

Missing the rebate period

All rebates will have a limited time period in which the reward can be claimed. It could be 30 days, 90 days or even longer. The rebate period could end on a specific date — e.g. January 30 — or it could be a certain number of days after the purchase is made. 

It’s important to pay close attention to this due date to avoid missing your rebate. 

Proof of purchase issues

Rebates require proof of purchase usually in the form of a receipt, order confirmation or the UPC code from the product packaging. Customers sometimes lose track of the original receipt or accidentally damage the bar code on the package. Be sure to store receipts in a safe place. 

Multiple rebate issues

Sometimes, companies offer multiple rebates on the same item. There may be a rebate from the retailer and a separate rebate from the manufacturer. 

While attractive, these are often more difficult to claim. For instance, customers often need multiple copies of the proof of purchase — which might mean asking the retailer for two copies of the receipt. Unless you’re willing to put in the extra effort, it’s a good idea to avoid these multi-rebate offers. 

Gift card rebates

If the rebate comes in the form of a gift card, be sure to check when the funds expire. It’s best to use them sooner rather than later to avoid any issues. 

Missing information

Finally, be sure to double-check everything. You don’t want to miss out on a rebate check due to a technicality or because you forgot to include a specific piece of required information.

Rebates can be a good tool to cut down on the cost of purchases you need. 

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