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Good and Bad Canon

 
 
Skip M
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      02-06-2006
It's unlikely that the mfr has costs much higher than the rebate amount,
since the redemption company is probably paid a percentage, rather than a
flat fee. And just where does the mfr hold the money, in escrow?

--
Skip Middleton
http://www.shadowcatcherimagery.com


 
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Bill Funk
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      02-06-2006
On Sun, 5 Feb 2006 22:35:10 -0800, "Skip M" <(E-Mail Removed)>
wrote:

>It's unlikely that the mfr has costs much higher than the rebate amount,
>since the redemption company is probably paid a percentage, rather than a
>flat fee. And just where does the mfr hold the money, in escrow?


My understanding:
The fulfillment center collects rebate requests for a certain time or
number, applies for funds to fulfill the requests for rebate, and then
sends that money out.
The manufacturer doesn't keep the money in any special account, as
it's a cost of doing business. Accounting keeps it straight.
And there have been rebates left unfulfilled because the company
offering them simply ran out of money. (RIP)

--
Bill Funk
replace "g" with "a"
 
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Skip M
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      02-06-2006
"Bill Funk" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> On Sun, 5 Feb 2006 22:35:10 -0800, "Skip M" <(E-Mail Removed)>
> wrote:
>
>>It's unlikely that the mfr has costs much higher than the rebate amount,
>>since the redemption company is probably paid a percentage, rather than a
>>flat fee. And just where does the mfr hold the money, in escrow?

>
> My understanding:
> The fulfillment center collects rebate requests for a certain time or
> number, applies for funds to fulfill the requests for rebate, and then
> sends that money out.
> The manufacturer doesn't keep the money in any special account, as
> it's a cost of doing business. Accounting keeps it straight.
> And there have been rebates left unfulfilled because the company
> offering them simply ran out of money. (RIP)
>


Right, so the mfr is using the money in the interim, waiting for requests
for reimbursement.

--
Skip Middleton
http://www.shadowcatcherimagery.com


 
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Tony Cooper
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      02-07-2006
On Mon, 6 Feb 2006 15:49:31 -0800, "Skip M" <(E-Mail Removed)>
wrote:

>"Bill Funk" <(E-Mail Removed)> wrote in message
>news:(E-Mail Removed).. .
>> On Sun, 5 Feb 2006 22:35:10 -0800, "Skip M" <(E-Mail Removed)>
>> wrote:
>>
>>>It's unlikely that the mfr has costs much higher than the rebate amount,
>>>since the redemption company is probably paid a percentage, rather than a
>>>flat fee. And just where does the mfr hold the money, in escrow?

>>
>> My understanding:
>> The fulfillment center collects rebate requests for a certain time or
>> number, applies for funds to fulfill the requests for rebate, and then
>> sends that money out.
>> The manufacturer doesn't keep the money in any special account, as
>> it's a cost of doing business. Accounting keeps it straight.
>> And there have been rebates left unfulfilled because the company
>> offering them simply ran out of money. (RIP)
>>

>
>Right, so the mfr is using the money in the interim, waiting for requests
>for reimbursement.


You feel this is wrong? The manufacturer is offering the buyer a
deal. They can structure the deal any way they want to.


--


Tony Cooper
Orlando, FL
 
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Skip M
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      02-07-2006
"Tony Cooper" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> On Mon, 6 Feb 2006 15:49:31 -0800, "Skip M" <(E-Mail Removed)>
> wrote:
>
>>"Bill Funk" <(E-Mail Removed)> wrote in message
>>news:(E-Mail Removed). ..
>>> On Sun, 5 Feb 2006 22:35:10 -0800, "Skip M" <(E-Mail Removed)>
>>> wrote:
>>>
>>>>It's unlikely that the mfr has costs much higher than the rebate amount,
>>>>since the redemption company is probably paid a percentage, rather than
>>>>a
>>>>flat fee. And just where does the mfr hold the money, in escrow?
>>>
>>> My understanding:
>>> The fulfillment center collects rebate requests for a certain time or
>>> number, applies for funds to fulfill the requests for rebate, and then
>>> sends that money out.
>>> The manufacturer doesn't keep the money in any special account, as
>>> it's a cost of doing business. Accounting keeps it straight.
>>> And there have been rebates left unfulfilled because the company
>>> offering them simply ran out of money. (RIP)
>>>

>>
>>Right, so the mfr is using the money in the interim, waiting for requests
>>for reimbursement.

>
> You feel this is wrong? The manufacturer is offering the buyer a
> deal. They can structure the deal any way they want to.
>
>


I didn't say it was wrong, just slick, in a Slick Willie sort of way. If
they actually marked the price down to the retailer, so it could be bought
at a lower price, then they wouldn't have the use of that money for the 2-6
months it takes the consumer to apply for the rebate and for the redemption
middle man to request reimbursement.

--
Skip Middleton
http://www.shadowcatcherimagery.com


 
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Tony Cooper
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      02-07-2006
On Mon, 6 Feb 2006 17:16:45 -0800, "Skip M" <(E-Mail Removed)>
wrote:

>>>Right, so the mfr is using the money in the interim, waiting for requests
>>>for reimbursement.

>>
>> You feel this is wrong? The manufacturer is offering the buyer a
>> deal. They can structure the deal any way they want to.
>>

>I didn't say it was wrong, just slick, in a Slick Willie sort of way. If
>they actually marked the price down to the retailer, so it could be bought
>at a lower price, then they wouldn't have the use of that money for the 2-6
>months it takes the consumer to apply for the rebate and for the redemption
>middle man to request reimbursement.


You don't seem to understand business. The idea of a rebate is to
offer a special, attractive price to the end-user to get that person
to buy this product instead of another, similar, product.

If the manufacturer offers an additional discount to the retailer, the
manufacturer *cannot* insist that this discount be passed on to the
end-user. Some retailers will, and some will just pocket the extra
margin and leave the normal sales price unchanged.

The only way the manufacturer can be sure that the discount will be
offered to the end-user is to rebate directly to the end-user. The
retailer doesn't care which brand of item is sold as long as some item
is sold. The rebate program is the manufacturers way of affecting
which brand is sold.

Your idea that the manufacturer has "use of the money" is absurd.
It's not someone else's money that they are holding. It's a delayed
discount from the manufacturer. It comes out of their pocket. It
only becomes *your* money when you buy the product, comply with the
terms of the rebate program, and get the check.



--


Tony Cooper
Orlando, FL
 
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Skip M
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      02-07-2006


"Tony Cooper" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> On Mon, 6 Feb 2006 17:16:45 -0800, "Skip M" <(E-Mail Removed)>
> wrote:
>
>>>>Right, so the mfr is using the money in the interim, waiting for
>>>>requests
>>>>for reimbursement.
>>>
>>> You feel this is wrong? The manufacturer is offering the buyer a
>>> deal. They can structure the deal any way they want to.
>>>

>>I didn't say it was wrong, just slick, in a Slick Willie sort of way. If
>>they actually marked the price down to the retailer, so it could be bought
>>at a lower price, then they wouldn't have the use of that money for the
>>2-6
>>months it takes the consumer to apply for the rebate and for the
>>redemption
>>middle man to request reimbursement.

>
> You don't seem to understand business. The idea of a rebate is to
> offer a special, attractive price to the end-user to get that person
> to buy this product instead of another, similar, product.


Tony, I understand business quite well. I realize that the rebates are
meant to attract purchasers with better-than-standard pricing. That is also
the purpose behind sale pricing. What I am commenting on, as are several
others, is the cynical thinking that seems to be behind its utilization.

>
> If the manufacturer offers an additional discount to the retailer, the
> manufacturer *cannot* insist that this discount be passed on to the
> end-user. Some retailers will, and some will just pocket the extra
> margin and leave the normal sales price unchanged.


No, the mfr cannot, but it is in the best interest of the retailer to do so,
and, in 30 years of retail and wholesale sales, I've never seen a retailer
with whom I've dealt fail to do so.
>
> The only way the manufacturer can be sure that the discount will be
> offered to the end-user is to rebate directly to the end-user. The
> retailer doesn't care which brand of item is sold as long as some item
> is sold. The rebate program is the manufacturers way of affecting
> which brand is sold.
>
> Your idea that the manufacturer has "use of the money" is absurd.
> It's not someone else's money that they are holding. It's a delayed
> discount from the manufacturer. It comes out of their pocket. It
> only becomes *your* money when you buy the product, comply with the
> terms of the rebate program, and get the check.


It certainly isn't "absurd." If that money were offered as a discount, the
mfr or wholesaler would not collect the money, thus it would never be in
their possesion and available for use in the interim. With a rebate, that
money is collected from the retailer or wholesaler, and then offered back to
the consumer, if that consumer gets around to sending in the rebate forms in
time. Just what is the money doing in the meantime, sitting in someone's
desk drawer? Of course not, it is in the mfr's bank, probably drawing
interest. I never said it was "my" money, or the consumer's. It is the
mfrs money, until it is refunded, and thus, they, the mfr. have access to
it, which they would not if it were offered as a direct discount.
--
Skip Middleton
http://www.shadowcatcherimagery.com


 
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SMS
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      02-07-2006
Tony Cooper wrote:

> You don't seem to understand business. The idea of a rebate is to
> offer a special, attractive price to the end-user to get that person
> to buy this product instead of another, similar, product.


Actually, that's not really the idea behind rebates anymore, because
there are so many competing rebates that price has become a secondary
reason.

The bigger reason for rebates is to prevent returns. Once the rebate is
submitted, refunds are usually not possible.
 
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ASAAR
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      02-07-2006
On Tue, 07 Feb 2006 09:14:34 -0800, SMS wrote:

> Actually, that's not really the idea behind rebates anymore, because
> there are so many competing rebates that price has become a secondary
> reason.
>
> The bigger reason for rebates is to prevent returns. Once the rebate is
> submitted, refunds are usually not possible.


Yes, usually, not always. Speaking with a Radio Shack customer
service rep. (1-800-THE-SHACk) about a possibly defective audio
device that was no longer available, I was told that I could
exchange it for the new model (priced identically) but I'd have to
pay an additional $50. It turned out that I wouldn't have had to
pay anything extra. The $50 was assumed on her part because the RS
employee botched the "paperwork", making it difficult for the RS
c.s. rep. to figure out what had happened, and she assumed that I
had taken advantage of a $50 rebate, which I had not. It didn't
matter that the rebate could only be used if I subscribed to a
year's worth of a "data/music" service. It was linked to the audio
device purchase. Sneaky, and probably deliberate on RS's part.

 
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Paul J Gans
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      02-07-2006
Tony Cooper <(E-Mail Removed)> wrote:
>On Sun, 5 Feb 2006 05:44:45 -0800, "Skip M" <(E-Mail Removed)>
>wrote:


>>Indeed. Not to mention the interest your money earns in their account while
>>you wait for them to send it back to you. Not unlike the IRS...


>That doesn't make sense to me. A camera is sold to a retailer at,
>let's say, $100. The camera sale is subject to, let's say, a $10
>rebate. The camera maker pockets the $100, and later pays out the $10
>when the rebate is redeemed, but the camera maker is not holding this
>$10 in an interest-bearing account. The camera maker is offering a
>conditional discount of $10 to the end purchaser. The amount paid the
>end purchaser is a cost of goods sold. It actually costs the camera
>maker more than $10 since the redemption service charges them a fee.


>The camera maker is not discounting the entire model production since
>the camera maker knows that only a certain number of rebate
>applications will be redeemed, but it's a genuine discount for the end
>users that complete the rebate process correctly.


>The system allows the camera maker to offer a discounted price to the
>end purchaser without negatively affecting the retailer's profit
>margin. It also allows them to generate interest in a model due to
>the potential discount.


>The primary reason a manufacturer offers a rebate program is that it
>allows them to declare a "sale price" that is available through all
>retailers. The retailer cannot decline to participate. The retailer
>does not have a reason not to participate because the retailer's
>profit margin is unaffected by the discount. Certainly the
>manufacturer is aware that not all buyers will take advantage of the
>rebate, but all buyers *can*.


>I don't particularly like rebate programs, but I don't think they
>should be criticized erroneously.


The problem with what you post is that it applies to
an ideal world. In practice folks often have a very
hard time getting their rebates.

And it is costly since often an outside firm has to
be hired to handle the paperwork, though the resultant
bad will accrues to the equipment maker, not the
fulfillment house.

Speaking for myself, offering a deal that you *know*
will be difficult to fulfill, is akin to fraud.

Worse, several of the places where I purchase merchandise
require a sales receipt in order to accept returns,
make adjustments, etc. And at the same time I'm often
required to send the original sales slip to the fulfillment
address to hope for my rebate.

This gives me an ugly choice.

---- Paul J. Gans
 
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