Rebates can be an amazing help to the budget and your financial situation. They can also ruin a good budget if you aren’t careful. This post is going to cover what they are, including different types to look out for. How they are important, how rebates work and what they can do for you.
But most importantly, we are going to answer that question, “how do rebates work.”
We will also be discussing a few easy rebate programs that I personally swear by. So if this sounds like something you’d be interested in, continue reading.
Some highlight bullet points we will be covering in-depth:
- What is a rebate?
- Is a rebate the same as a discount?
- What is the purpose of a rebate? (answers the “how do rebates work?”)
- What types of rebates are there?
- Why do stores do rebates?
- Why are rebates important to my budget?
- Can you give some specific examples of rebates I see every day?
- What are some easy to get rebates?
What is a rebate?
A rebate is a cashback offer, usually in a “one lump sum” given to you after you make a purchase. The easiest way to visualize this is to think of tax time. When you claimed 0 all year long and had the max withdrawal from your paychecks, you get a large lump of money back after filing your taxes. This is a form of cashback rebate. You overpaid all year long, so you could get the maximum rebate back.
Is a rebate the same as a discount?
Yes and No. For all intents and purposes, a rebate is technically a discount, but it’s also more than that. It’s a discount when you get the rebate at the time of sale, like instant savings. But if your money back is given after the sale, then it’s a refund.
What types of rebates are there?
There are so many types of rebates out there! Including (but not limited to) Mail-in Rebates (MIR), mixed product promotions or promotional launch. You can often see rebates for first-time customers to save a percentage off their order total. There is also rebate apps and websites that consumers can use to get a refund on their purchases.
What is the purpose of a rebate?
Pay attention here, because this is where we answer our original question “how do rebates work.”
The purpose of a rebate from a store sales point is to get people in the door and buying products at a specific price. Stores hope for consumers to forget about the mail-in rebates and not act on the “money back” offers. Which, many people do forget about… Or they lose the receipt or proof of purchase and cannot act upon it.
National statistics say that less than 40% of consumers actually claim their rebates.
Another reason stores offer rebates-
If your rebate is in the form of store credit, the store gets your business TWICE. You now have to go back to the store to spend that money, and odds are that you will spend more of your own money too.
Rebates don’t lose the stores money-
Since you paid full price for your item at the time of the transaction, the store got all of your money. The rebated amount is set aside to be dispersed later (it usually takes 4-12 weeks before stores send you your rebates.) This money is collecting interest as it sits off to the side.
While your $20 rebate alone, might not look like a good investment for gaining interest, add in the thousands of others who joined you on this deal. That adds up quickly.
But how does a rebate work for YOU?
From a consumer standpoint, rebates are enticing. The promise of money back is a deal many of us cannot pass up, myself included. Especially around Black Friday when Kohls offers those $10-$15 cash backs plus rebates on kitchen appliances.
[Related] This stay at home mom saves thousands of dollars a year using rebates in her favor!
Why do stores do rebates?
Stores offer rebates because it MAKES THEM MONEY.
They know exactly what they’re doing, and are not losing money by offering these deals to us consumers. In fact, they offered us these deals makes them money in the long run. This is how rebates work for them. See previous reasonings shown above.
Why are rebates important to my budget?
Trick question, and multiple part answer.
Rebates can be really good for your budget if the rebate total offers you a lower price point than competitors. Saving money is always a good thing. If you have the money to spend upfront, and it doesn’t hurt your budget, enjoy the rebate and the fun of getting money back later. It’ll feel as good as getting a gift card at Christmas.
However, that being said- rebate offers could really hurt your budget too
Allow me to briefly list a few reasons why:
- By being enticed into a rebate offer, you could be spending more money than you would have normally spent. There’s an emotional connection between people and the word rebate, bringing you to the conclusion that it’s simply amazing and a must-have. But it could cause you to lose focus and not compare prices elsewhere.
- For money back rebates, you are spending money upfront that you may not have had. You could be taking money from one area of your budget to accommodate, and that will throw off your whole budget altogether.
- You could be a part of the 60% of Americans who forget to redeem a rebate, meaning you won’t save any money at all. Which risks you actually spending more.
- Even if you did submit for a mail-in rebate, there’s a chance you may not get it. Lost mail, incorrect or missing information on a form can/will result in you forfeiting that rebate.
- You have literally no clue when a rebate will come in. The average time is 4 to 12 weeks, which makes the money hard to include in your budget as income. And that’s if you even receive it at all!
- If your rebate is in the form of store credit, it probably has an expiration date and now you have to plan a shopping trip to use it soon. The odds are high that you’ll impulsively add in other things to your cart, only thinking of the money “you’re saving” and not what you are actually spending.
Can you give some specific examples of rebates I see every day?
Some super recognizable rebates that you could be used to seeing in every day to day life may include:
Verizon (or another phone company) offering a Pre-Paid Visa Gift Card Rebate after the purchase of a new phone or phone line.
Kohl’s cashback programs. (I mentioned this earlier in this posting.)
Firestone tires do a mail-in rebate for money back after purchase of tires.
Rural King does a 2% cashback rebate (in form of store credit) on purchase totals when you redeem online using receipt found information.
Staples and Office Depot do cashback rebates with special coupons, requiring specific item purchases and are redeemable online and in the mail.
Several big named car selling companies offer cashback rebates on car sales.
You could also be used to seeing furniture companies offering instant rebates as a sale.
What are some easy to get rebates?
Cashback rebate programs can be super easy to obtain and not take nearly as long to have back in your pocket as when dealing with big named companies. Some rebate programs are simply put- amazing to work with. When there is not nearly as many hoops or red tape to cross through, you can get your money back with less hassle.
Here are a few of my all-time favorite cash back rebate programs-
EBATES– This is a really popular rebate program that has personally earned me back over $270. My earnings really slowed down since I stopped shopping at retailers online. Sign up with my link here and get a FREE $10 cash bonus. Install the toolbar and be alerted every time you shop online. EBATES will pop up and remind you of rebates and ask to automatically apply any coupons to your cart, saving you even more money!
TopCashBack- Sing up using my link right here and get a FREE $10 credit. This program works exactly like EBATES but it doesn’t have a minimum payment threshold to meet and it offers some stores not shown on EBATES. I enjoy comparing the rebates offered between TopCashBack and EBATES and have seen a few times where this program offers a better deal on a specific merchant. So I highly recommend joining for those bullet points alone.
Ibotta- This one is mostly for groceries. It shows specific items and details on what needs to be done to receive an amount of money back. Making it easy to navigate for even the most un-tech savvy persons. It’s as simple as uploading images of your receipt and scanning barcodes on products for proof of purchase. Within 24 hours you are credited with cashback (however much was specified) to your account. Plus there are cashback bonuses that are unbeatable elsewhere and these rebates can all be combined with in-store sales, discounts, and coupons. Sign up here for a $20 welcome cash bonus.
[Related] See My Ibotta Review Plus How It Works
Hopefully, all this information helped to answer your rebate related questions. Giving you several examples of how rebates work for store merchants and how rebates work you should help to give you a better understanding of rebates in general.
I also hope that this information gives you the motivation to make rebates work for you and your budget, instead of against it.