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Why people offer "free after rebate"? How do they make profit?
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September 6, 2008 -
Responses:
- because they know the percentage of people who don't bother to send in the rebate, send it in wrong or loose them and they can make a profit betting on that.
- Many people buy the product intending to send the rebate, and we know as human beings, this doesn't always happen. There is probably some percentage of rebates that don't get sent in, because the rebate expires, the customer loses it, or a myriad of other reasons.
- Because only a small percentage of the population actually redeem the rebate -- all the rest is profit!
- it comes as a tax write off at the end of the year for them
- If, say, Best Buy sells a $30 scanner that is free after rebate, it's free to us but gets them a profit. You pay Best Buy $30 when buying the scanner, then you send the rebate to the scanner company who sends you the $30 to cancel it out. Best Buy is getting their $30 and sending you nothing, and the scanner company will get a request for shipments from Besy Buy sooner.
Knowledge Base: Deals
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