Manufacturer rebates are offered for several reasons, including 1) It allows companies to offer a short-term discount without effecting the long-term price of the product, 2) It allows companies to hold onto the discount dollars (and invest or collect interest on them) for a month or two until the rebate is issued, and 3) It leaves open the possibility that consumers will fail to send in the rebate forms and never collect the discount (though of course it still factors in their purchase decision).
As the recent beneficiary of a large rebate, I've observed it's even more tricky than that.
Last fall, I bought a Canon 5D Mark II and a Canon Pro9000 Mark II printer. The $400 rebate advertised, along with holiday discounts, was of course a crucial factor in my decision to make that purchase.
After a couple of weeks, I got around to sending my rebate form in. It was moderately tedious stack of paperwork, whose requirements included hacking off the proof of purchase symbols from each box. I also had to make photocopies of all the paperwork and send the letter certified mail in case my $400 never arrived. I'm not sure how long it took for the rebate to arrive but it wasn't a short span of time, a number of weeks at the very least. The rebate came in the form of a $400 American Express card.
This American Express card added an additional element of dexterity to the whole process because I now had to keep track of the card balance and ensure that I used it all. Although I went through the steps of calling American Express and setting up the card for online usage, most online purchases I attempted to make failed to go through (in fact, maybe all of them?). Thus, I had to use it at physical establishments.
American Express is great if you are looking to get rewards points and have a lot of money to spend; it is less stellar if you have a prepaid non-rewards card and are simply looking to use all the cash that you are owed. Many local stores and restaurants still do not to take American Express, so I instead ended up using it soletly at large chains like OfficeMax and Super America. While doing this, I had to make sure I didn't lose the card. In this sense, the card was actually like cash- if I had lost it the money would simply have been gone.
I'm pleased to say that as of today the remaining balance on my Canon rebate American Express card is 1 cent (finishing at the gas tank is one course of action I recommend).
I'm not sorry I made the purchase- the Canon 5D Mark II is a great camera (even with its dodgy focus outside the center point) and certainly the $400 rebate proved to be quite useful over the last month. But I have learned to importance of keeping a keen eye on all the fine print.
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