The economics of rebates
Here is an example of how rebates work:
Company builds 1,000,000 toasters per year at a cost of $10 per toaster. They sell them to a distributor for $20 (who will sell them to a retailer for $20, who will sell them to a customer for $40). The company makes $10,000,000 profit and would have to pay about $5,000,000 tax. However if they put a $10 rebate coupon in with each toaster, that creates an additional contingent $10,000,000 liability and they won't have to pay any tax until the actual cost of the rebates is known.
The company hires a rebate fulfillment house to process the rebates and pays them $100,000 to take care of all the rebates. Both the company and the fulfillment house know pretty accurately how many rebates will be sent in and how many they will actually be forced to fill. Of course it is in the fulfillment house's best interest to fill as few as possible.
The fulfillment house pays an employee $20,000 to process the rebates and the employee actually does fill 5,000 rebates. The fulfillment house keeps the $30,000 profit.
When the rebate expiration date is reached and the total cost to the company for them was $100,000, the contingent liability of $10,000,000 is replaced with an actual liability of $100,000, the company now will have an additional income of $9,900,000. So as an honest and ethical company they will pay the approximately $4,950,000 tax - but the company has had a $5,000,000 interest free loan for a year from the government at a cost of $50,000 (1% interest equivalent).
SO:
Make sure you fill out all the forms properly.
Be sure to include all required documents, e.g., ORIGINAL receipt, ACTUAL product code from the package, etc.
Make copies of
everything.
Send it USPS certified with a return receipt requested, so you have a date, time and actual person's signature at the fulfillment house.
Be extra careful with the mail-to address and your return address.
Be sure to allow plenty of time (2 weeks?) for it to be delivered before the expiration date.
Remember to start following up promptly at the earliest reasonable time. If they say "4 to 6 weeks" to process, start following up at 4 weeks exactly.
Be prepared to mention that you have a friend who is an attorney who specializes in rebate cases and your uncle works for Channel 9 Fraud Alerts.
Hope for the best - there is a chance your rebate might be one of the 5,000 actually filled.
