Market Power

Musings by an academic economist on the power of markets and the power over markets.

Sunday, February 13, 2005

More Reasons to Hate Rebates

Rebates stink. Ralph Frasca of Division of Labour thinks so too. So does his co-blogger Michael Munger. Munger links to a piece by Arnold Kling that is a must read for those who are thinking of buying a computer partly because of a sweet rebate detail. Kling links to this piece by Ed Foster which tells in detail games that are played by those offering rebates.

3 years ago, when I bought the computer on which I am currently typing from that computer maker not named Gateway, one of the reasons I chose it was to get a triple-digit rebate. When I bought it, I wanted to get the best speakers and sound card I could get, but doing so would delay the shipment. I was afraid that the delay might bring my computer to me after the rebate expiration date, but I was told by a customer service rep via email that my rebate would be honored. The shipment arrived after the rebate expiration date. Guess what happened next? Yup... I didn't get my rebate honored. I even sent a copy of that email mentioned above, but no dice. So when I bought my next computer, I treated the rebate notice like I would treat a Kleenex or some Charmin. I based my decision on the non rebate price of the computer and its amenities.

Talk is cheap, and if a rebate sounds too good to be true, it probably is. If you want to buy a new computer, be wary of a big rebate.