CompUSA Ripped for Rebate Mess

By James Gaskin, NetworkWorld.com, 03/14/05

CompUSA agreed to settle with the government over their handling of rebates according to this CNN report. Better? CompUSA must guarantee that manufacturers pay rebates promptly for the next 20 years. Best part? If the manufacturers drop the ball (as we know they will), CompUSA must pay the rebates. Finally the government does something decent to help support our fight against the rebate scam.

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Comments

The only improvement in my opinion would be for the manufacturers to pay the rebates to the dealer and leave the customer out of it. This could be accomplished by the customer assigning the rebate to the dealer at the point of sale and paying the net (after rebate) price. Auto companies use this method.

Rebates are a method used by manufacturers to move more inventory when they lower prices. It is a backhanded way to protect retailers from price reductions. It also reduces the cost to manufacturers because they know only a small percentage of the rebates will be claimed. So it is a win for both the dealer and the manufacturer.
The dealer collects the full price and protects his margins. The manufacturer has to pay out some funds but, nothing compared to the amounts he would have to pay if he protected his dealers from price drops.

In my opinion rebates should either be outlawed or paid as a discount at the point of sale.

To illustrate the ridiculous, a well known computer company that sells direct (there are only 4 letters in it's name)sells items at a low price after rebate. The catch is that you have to pay full price before they ship and then mail the rebate info and wait for the rebate to be mailed to you. And this is from the manufacturer, no dealer involved. Oh well I guess my reasoning in the previous paragraph was wrong. Is is a scam to make the comsumer jump through hoops to pay a fair price.

Posted by: Tom on March 21, 2005 02:04 AM