Rebates, also known as "mail-in rebates", are primarily used as incentives or supplements to product sales. A rebate is an offer in which the purchase of a product entitles the buyer to mail in a coupon or receipt and receive a check for a particular amount, depending on the particular product, time, and place of purchase.

Rebates are heavily used for advertised sales in retail stores in the United States, such as Best Buy and Staples. Computer components and electronics seem to have a large portion of rebate sales. For example, an item might be advertised as "$39 after rebate", but the item actually costs $79 and comes with a $40 rebate coupon.

Outside of the United States (e.g. in Nordic countries, the UK, Europe and other countries) using rebates as a sale technique is virtually unknown.

Rebates can be offered by the retailer or the manufacturer of the particular item. The turnaround time is generally 4-8 weeks.

Incentives

Rebates have become very popular in retail sales. Retailers and manufacturers have good reasons to offer them:

• Only a small percentage of people remember to mail the coupons. While the return rate varies greatly depending on the amount of the rebate, the particular store, and the particular product, a general estimate is a return rate of less than 10%. Some estimates have been as low as 2%.
• During the turnaround time, the company can continue to earn interest on the money.
• If the turnaround time crosses a financial period boundary, such as annual quarters, a rebate offer can be used to inflate sales at the end of a period, at the expense of the initial budget of the next period.
• Extended warranties and other price-dependent factors always use the initial purchase price, not the price after the rebate.
• If the rebate is from the manufacturer, the retailer has a "free" sale.
• If the rebate is from the retailer, the manufacturer has "free" advertising.

Caveats

• Sales tax is calculated on the initial purchase price, not the price after the rebate. A $199 item with a $150 rebate is advertised as only $49, but the customer must pay tax on $199.
• Rebates usually require the customer to cut out the UPC from the product's box and mail it with the rebate coupon.
  • If the customer forgets to include this, the rebate is rejected. When a rebate has been rejected, it is difficult to resubmit it, since required documentation such as the original receipt is usually sent with the original request. Often, copies are not accepted.
  • Once the UPC has been removed from the box, retailers will not accept a return of the item. Customers must therefore ensure that they do not need to return the item before mailing the rebate.
  • Offers Cash Back Rebates for a variety of online stores like Dell, HP shopping, Gap, BestBuy,HSN,and more.