Bowing to customer complaints, Best Buy says it will eliminate mail-in rebates within two years. Rebates allows the company to offer low prices, but require customers to mail in rebate forms, receipts, and pieces of the product packaging. Naturally, not all customers do this, and the company ends up pocketing the higher price. It’s natural demand segmentation, and many companies do it, even though it ends up frustrating customers.
Best Buy plans to move its promotional spending to its Rewards Zone loyalty program. (See this post on the 1% Discount Plan about loyalty pricing.)
This reminds me, I need to mail in a rebate form…
Rebates, would love to hear you blog on those more.
What are average rates for customers to redeem them? How well do they work? What are alternatives that work better for customers? What about other companies that do rebates better? How much fraud is there in rebates?