Best Buy even better without mail-in rebates

Posted Jul 11th 2007 9:05PM by Brian White
Filed under: Consumer Experience, Marketing and Advertising, Best Buy (BBY), Circuit City Stores (CC)

Although Best Buy (NYSE: BBY) has gotten into hot water for not paying some rebates as well as possible deceptive practices related to a "secret internal website," the company has been making progress recently on eliminating rebates on many of its products. Browse through any of Best Buy's advertisements in a local newspaper and you'll see a stark difference in the prices it advertises for that newer notebook PC or plasma TV -- there are very little to no "mail-in rebates."

A recent Circuit City (NYSE: CC) ad showed many of the same prices on products very similar or identical to those carried at Best Buy. That is, after two to three rebates were applied. The rebate madness at Circuit City and CompUSA (for example) is still in full force: If you want that $799 laptop, be prepared to pay $1,200 out the door, then apply for two or more rebates to get you down to that advertised $799 price. In the meantime, you've paid sales tax (most likely) on $1,200 already. Enter Best Buy, and you'll likely leave with that $799 laptop for exactly that price, after "instant rebates." That, my friends, is much easier to swallow for most bargain hunters.

Why can't other retailers do away with mail-in rebates and stop luring consumers with artificial prices? Well, they know that industry's dirty little secret: 80% of mail-in rebates are never followed up on. Nothing new here, and it's a margin padder for retailers while allowing them to advertise very low prices. But, savvy consumers these days recognize the difference and see that Best Buy's rebate elimination program is a much better deal. That, in turn, builds loyalty even against e-tailers like Amazon (NASDAQ: AMZN) or Buy.com. Best Buy got it right here, and I'd be amazed if other retailers don't follow suit soon. That, or risk becoming more irrelevant to the informed bargain-hunting consumer.

Tags: BBY, Best Buy, Best Buy Rebates, BestBuy, BestBuyRebates, CC, Circuit City, CircuitCity, rebates

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Reader Comments (Page 1 of 1)

7-11-2007 @ 9:26PM

stoli100 said...

If they are smart they will eliminate these rebates. I have spent over $5000 elsewhere than BUY.COM after they ripped me off for $150 on my cell phone. I won't do business there even if they are a little cheaper. That CEO on the roof can just jump off it for all I care

7-11-2007 @ 11:47PM

William Martin said...

I am having good luck now with Best Buy since I ask for a particular manager to help me with anything I need. He does this because he knows how much trouble I've had with Best Buy's computer in home warranty plan I purchased with my new desk top.He has offered me 10% off when I buy anything else.I feel completely confident when he assists me.This may not be the norm but it works for me.

7-11-2007 @ 11:47PM

mattydread said...

Death to the rebates! I hate those things. They're so wasteful of peoples time and resources.

7-12-2007 @ 12:04AM

J said...

That goes for discounts only when you their credit card, who needs that many cards floating around in your wallet!

7-14-2007 @ 11:40PM

Alexander Manuel said...

I don't know where you got the statistic that "80% of rebates remain unclaimed." That might be true for rebates under $10 but certainly not for those greater than $50, and most surely not for rebates in excess of $100. I would like to see examples of the products you claim are identically priced between CC & BBY in spite of the rebates. In fact, if you visit the respective websites of these companies, CC is advertising $349 laptops (after rebates of course) while BBY can only claim they have product for less than $700. Rebates are not going anywhere because they work!

What is so bad about rebates? Bargain hunters who are looking for a deal will send them in, while folks who could care less simply do not bother. I think BBY is shooting itself in the foot by taking this lofty "no rebate" position with its marketing. Even Apple uses rebates and they are considered the gurus of marketing with the most loyal customer base in the electronics industry.

Geeessh!!! Live & let live!!!!