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Beating the rebate runaround, Part 2

Feb 05, 20044 mins

* We hit a wall talking with Dell’s fulfillment company

We hit a wall talking with Dell’s fulfillment company

Last time ( we aired complaints and questioned the motives behind Dell’s rebate program. This week, we look for answers from Dell’s rebate fulfillment house – Continental Promotion Group. 

As you might expect, Mike Leonard, CPG’s vice president of marketing, was light on details. He claims CPG sent out 20 million rebate checks last year and earned $800 million in revenue. Profit numbers aren’t available because CPG’s a private company.

We asked Leonard about “slippage,” our term for the difference between the number of rebate claims mailed to CPG and the number of rebates it actually pays. What are CPG’s slippage numbers?

Leonard responded with a bit about “breakage,” the term CPG uses for the number of products sold without the customer claiming the rebate. “No program ever gets 100% response from consumers, and some get almost no response,” he says. “People just don’t go to much trouble for a $5 rebate on a $100 item.”

So we asked how many rebate checks are lost in the mail. “No clue,” Leonard said, but added that the number is higher during the holidays.

When we asked how many rebate checks are mailed but never cashed, Leonard didn’t have a number. Is it true checks that look like postcards have a lower redemption rate? “We notice no difference between postcards and regular checks,” Leonard said.

Hmm. But if CPG doesn’t know how many checks aren’t cashed, how can Leonard know it’s the same? We didn’t bother to ask again for a number he wouldn’t supply.

Leonard did admit some vendors’ rebate programs are fraudulent. “We have to be diplomatic when consumers call and ask where their money is and the client hasn’t paid us.” Some vendors want the marketing buzz a rebate program generates but never plan on paying the consumer, but CPG refuses to work with them.

Leonard then explained that rebate companies require UPC blocks from product packaging and other proof of purchase to guard against consumers trying to “steal” rebates they aren’t entitled to. He said about 5% to 10% of all rebate submissions are invalid, but added, “Fraud [by consumers] is far less of an issue than people realize.”

But what about fraud by the vendor and the fulfillment company? All the hoops they make us jump through to get our money, the “lost” checks, the “postcard checks,” what, if not fraud, would you call all that?

“The nature of this business is structured so some people will be unhappy,” he said. When consumers have a problem with rebates, they blame the fulfillment company. “The largest number of calls we get is people asking where their check is,” Leonard added.

For the heck of it, we asked Leonard to suggest ways consumers could be more successful getting their rebates. “Submit rebates for products from well known and reputable companies, and keep a complete record of all submission info. You have to send originals, so make copies. Carefully read the terms and conditions.”

We recommend disregarding Leonard’s advice and contacting the vendor directly. After all, in my case, I have a relationship with Dell, not with CPG. I want to give Dell’s Customer Care program a chance to take care of this customer.

When I asked Leonard about my experience, he couldn’t explain why I received CPG’s “rebate denied” letter Jan. 5, after I sent the forms in July 31. He mentioned that many of CPG’s clients, such as Costco and Lowes, use an online rebate submission form, but Dell is sticking with paper.

Unsatisfied, I turned to Dell once more. When I asked a rep how many rebates go unfulfilled, he replied, “Company proprietary information.”