Rebate

What It Means

A rebate is money given back to you after you've paid, a return of part of what you spent, as Merriam-Webster defines it. With a mail-in rebate you pay the full price at the register, then send a claim to the store or manufacturer and wait for the money to arrive. That gap between paying and getting money back is what separates a rebate from a sale price, and it's where most rebates go wrong.

How It Sounds at Home

• "It's $50 after the mail-in rebate."
• "I never got that rebate check."
• "You have to cut the barcode off the box."

The Breakdown

A short example. Sam buys a phone advertised at $99 after a $100 rebate, so he pays $199 at the counter. At home he finds the form can't be sent until 90 days after purchase, must include copies of two monthly bills, and has a 30-day window to arrive. He forgets about it until day 140.

Where it goes wrong. The advertised price assumed Sam would get the rebate. The FTC has brought cases over exactly these gaps: one company's customers had to wait three to six months before they could even submit, some were misled about how many bills to include, and others filed correctly and still waited many months. In one case the forms promised payment in 1010,000 stepsA popular daily step goal that began as the name of a 1960s Japanese pedometer; later studies find health benefits begin well below it. See more to 12 weeks, and the average was about 24.

What to watch for

• The real price you'll pay today, before any rebate.
• When you can send the claim, and the last day it will be accepted.
• Every document the form asks for, with copies kept.
• The payout time the company promises, written down with your send date.

Good to Know

The FTC has said that rebate terms should be clear before you buy and rebates paid when promised. Its settlements with CompUSA (2005), Soyo and InPhonic (2007) and American Telecom Services (2009) barred each company from paying rebates later than the time it stated, or later than 30 days when it stated none. Those were terms of orders against specific companies, so for any other rebate, the promise on the form is what to hold the company to. If a rebate is late, contact the company with your copies and send date, and you can report the problem to the FTC.

Related Terms and Categories

• Cashback

  Money a card or program pays back as a percentage of what you spend, usually as a statement credit, a deposit or a check.

• Coupon stacking

  Using more than one discount on the same item in one purchase, such as a manufacturer coupon plus a store coupon, where the store's policy allows it.

• Price matching

  A store policy of lowering its price to match a lower price for the identical item, found at a competitor or at the store itself.

• Credit card rewards

  Cash back, points or miles a credit card pays you on your spending, worth only what the program lets you redeem them for.

• Impulse spending

  Buying something on the spur of the moment, without planning for it or checking it against your budget.

Household money and budgeting