Why do stores and manufacturers use mail in rebates? A scam, or is there a way to use them effectively?
"It's an effective way to achieve market segmentation without having to ask your customers how rich they are, and you get the benefit of finding out additional information like their address, email etc. The principle is similar to coupons on cereal boxes, anybody can get the rebate/discount if they go to the effort, but people who are cash rich/time poor are less likely to do so than those that really need the money. Joel Spolsky wrote about this and various other pricing mechanisms a while back, I like to reference the article every few weeks. It's well worth a read. Now, if you're retired and living off of social security, $7 an hour sounds pretty good, so you do it, but if you're a stock analyst at Merrill Lynch getting paid $12,000,000 a year to say nice things about piece-of-junk Internet companies, working for $7 an hour is a joke, and you're not going to clip coupons. Heck, in one hour you could issue ""buy"" recommendations on ten piece-of-junk Internet companies! So coupons are a way for consumer products companies to charge two different prices and effectively segment their market into two. Mail-in rebates are pretty much the same as coupons, with some other twists like the fact that they reveal your address, so you can be direct marketed to in the future." I've had positive experiences and negative ones. One key is to be sure you have followed ALL of the instructions. Once I forgot a small piece of information and lost out on $40. I was not happy. A few weeks ago I got a rebate for $50 from Staples, and it couldn't have been simpler. Stick with big companies and make sure you do everything on time. Companies use rebates because they know some people will forget, mess up, or not use the rebate. They make a ton of money off of unused rebates. "Unfortunately too many companies view a Mail in rebate as an unwelcome cost instead of as a customer interaction issue, and it gives the company a bad reputation when someone gets stiffed on the mail in rebate, and it also has basically ruined the concept to a large degree. Many people will simply regard the rebate as worthless and evaluate the product based on the full price - killing what the company wanted to get out of it (Rich Seller hit the nail on the head), which is why you see ""instant rebates"" etc." Chiming in with other answers that incriminate market segmentation attempts, I would like to offer this Seth Godin video where (among other things) he speaks about breakage, the art of making coupon redemption so difficult that most people get it wrong and do not redeem them. Oh, and when comparing/deciding which/whether to buy, I always use the up-front price. Don't want to encourage the wrong behavior. Rebates are a great way to give discounts to customers who are cost sensitive. A long time ago, I worked for a retailer that extensively used rebates as a marketing tool. From my point of view, about 90% of the complaints that I investigated were a result of people not following directions. Biggest single thing was not sending original documentation when it was called for. There are many reasons, some already covered by other answers. I have a blog post on the issue here, and I'll summarize: Some notable percentage of buyers won't even try to do the rebate, or will forget - so it's a [relatively] cheap incentive to the consumer than most will miss out on. Not so much a scam, if you fill the required paperwork and actually take time to mail it in assuming it's done correctly; you will get your money. That being said, having a mail-in rebate program is usually a win-win for the seller. While they may have to pay a small fee to a third party who handles the rebate almost always this influences a potential buyer to choose a specific product over the alternative. The seller knows very well that very few people will actually go through with it. And yes, they do often make the process needlessly complicated and long as a deterrent.  Plus, let's be real, no one likes sending out physical letters anymore. From a marketing standpoint the mail-in rebate is a brilliant idea. However, it's usually more of an annoyance for the consumer.
"I cannot definitively say this is illegal, but we'll apply some cold hard logic to it: If this were as easy as it sounds, why aren't they using their own account/card instead of yours? Ask them this question directly.  They will probably say something along the lines of ""I don't have a card"" or try to guilt you into doing it. You should do two things:  Tell them no. Report them to the police/the bank/etc. In all likelihood, they will end up doing something illegal or they are laundering money.  When push comes to shove, you will be the one the police come after asking questions.  They have complete deniability as it is your card.  This is no different than the ""Cash this big check and send me half of it"" scams that are common." "Here we go again! Why, oh why, would someone just open a bank account in your name with that much money for no good reason?  Unless there's a very rich relative in your family tree, this can not come to a good ending.  Besides, if this was money being left to you by someone as part of an inheritance, you'd hear from attorneys from the estate. Notwithstanding everything @NickR posted about the details of what makes it suspicious, ask yourself why a banker would contact you by email about an account with this much money in it.  The bank would, at the very least, send you a registered/certified letter on official stationery.   So what happens here is when you give them your banking information, whoever it is that's doing this will clean out your account, and that's for starters.   They will ask for enough information to steal your identity too, and if you have good credit, that'll be gone in a heartbeat. The best scams (meaning the most successful ones) always appeal to peoples' greed, using large amounts of money that just miraculously belong to the victim, if only they'd give a little information to ""transfer"" the money.   Worse yet, most of these scams will come up with some kind of ""fee"", ""tax"" or other expense that you have to pre-pay in order to make the transfer happen, so this just adds insult to injury when you find out (the hard way!) you've been scammed. DO NOT reply to the email you received or, if you already have, don't send any more responses.  If they think they may have you on the hook then they won't stop trying, and it will become very messy very quickly. THIS IS NOT REAL MONEY!  It isn't yours, it doesn't really exist, and all it will do is come to no good end if you go any further with it. Stay safe, my friend." &gt;ever heard of unions? They love seniority.  One of the main reasons why labor intensive manufacturing has left the midwest and new england. Unionized industries like airlines and auto manufacturing have seen most major firms go bankrupt in the last decade.  &gt;Over time, this is how asian countries will take over with their education and work ethic being at the top of their values.  This could happen but I think Asian aversion to innovation will prevent them from racing past the US. Becoming a developed country shouldn't really be that hard. There is an easy playbook followed by Japan, South Korea etc. Leading the global economy in a rich country is a much more difficult task.  &gt;and as for those who went to college, did poorly, picked bad majors, and are wondering why the fact they went to college isnt landing them a plush job, welcome to how it has always been. Just doing the minimum of going to college hasnt been enough for a very long time and people were naive to think that there was ever a golden path or ticket to success.  This is Obama's base: entitled whiners who need the government to give them goodies because they have no marketable skills. "The first question I have to ask is, why would your ""friend"" even be considering something so ridiculous?  There are so many variations of the banking scam running around, and yet people can't seem to see them for what they are -- scams.   The old saying ""there's no such thing as a free lunch"" really comes into play here.  Why would anyone send you/your friend $3,000.00 just because they ""like you""?  If you can't come up with a rational answer to that question then you know what you (or your friend) should do -- walk away from any further contact with this person and never look back! Why?  Well, the simple answer is, let's assume they DO send you $3,000.00 by some means.  If you think there aren't strings attached then all hope is lost.  This is a confidence scam, where the scammer wins your trust by doing something nobody would ever do if they were trying to defraud you.  As a result, you feel like you can trust them, and that's when the games really begin.   Ask yourself this -- How long do you think it will be (even assuming the money is sent) before they'll talk you into revealing little clues about yourself that allow them to develop a good picture of you?  Could they be setting you up for some kind of identity theft scheme, or some other financial scam?  Whatever it is, you'd better believe the returns for them far outweigh the $3,000.00 they're allegedly going to send, so in a sense, it's an investment for them in whatever they have planned for you down the road. PLEASE don't take the warnings you get about this lightly!!!  Scams like this work because they always find a sucker.  The fact that you're asking the question in the first place means you/your ""friend"" are giving serious thought to what was proposed, and that's nothing short of disaster if you do it.   Leave it be, take the lesson for what it's worth before it costs you one red cent, and move on. I hope this helps. Good luck!" Amazon has 2 different cards you can apply for, a store card and a credit card. The credit card is through Chase. The deal is not a scam, I can confirm this because I applied for their credit card and got $70 in the form of a digital gift card. By giving customers free money for signing up for their cards they get more people who are willing to give it a try. Once you have a card, you get benefits like 3-5 percent back on Amazon purchases that will entice consumers to use the card. Amazon likely has an agreement with Chase and they are hoping to get you hooked with the free money and benefits. They aren't swearing off of competitive shopping, lol. They're just paying for an individual service up front in exchange for what they presume are greater returns later in the year. Whether it's actually worth it probably varies on an individual basis. Some businesses verify the shipping address with the credit card company, and refuse to ship to an alternate address without additional, offline verification.  Of course, this is only useful for physical goods. I mainly use Ebates to get cash back when shopping online. I wrote a little review here: http://www.savewithdan.ca/websites-use-ebates-ca A super useful app is the one called Flipp (it's not a website, it's an app, but I think it counts as a valid answer, right?) You can compare prices from several stores and their fliers.