Rebate (retail)

From ArticleWorld

A rebate is a cash back incentive that is given to a customer in order to increase sales of a product or service. Often there are many stipulations in the receiving of rebates.

One stipulation of rebates is that you have to have the original documented proof of purchase of a product or service. This means that copies of receipts or copies of UPC (barcodes that appear on product or service packages) will not suffice. This has lead to many customers who have not been very happy with manufacturers as a result.

Another stipulation of receiving receipts is that the cash back usually comes after taxes and not before. This means that that customer still has to pay sales tax on the original price of the item, and this sales tax is not figured in to the amount of rebate.

Therefore, a customer could go to the store thinking at first that he or she will purchase an item for $100, and receive $50 back with a $50.00 rebate. However, sales tax in most U.S. states usually runs between 5 and 8% of the total sale of an item. This leaves the customer really getting return of only 35-40.00, and not the $50.00 that they were thinking they would receive.

Of course, people realize usually that they have to figure in sales tax when they go shopping. However, the truth is many people make impulse purchases thinking they will save money when in reality they may not be saving any money in some cases. Consumers have learned over the years, however, to be more careful when they shop.