guides & articles

Related listings

Latest Postings

Subscribe to the hottest news, latest promotions & discounts from STClassifieds & our partners

I agree to abide by STClassifieds Terms and Conditions

Business Advice

New IT sales offer: Buy first, get rebate later

Mail-in cashback deals are catching on here
The Straits Times - January 9, 2012
By: Lim Yan Liang
| More
New IT sales offer: Buy first, get rebate later This Sim Lim Square shop is among eight there selling a drive via post-purchase rebate. -- ST PHOTO: LAU FOOK KONG

BUY first, get a rebate later.

Shoppers for IT products here are biting at the 'post-purchase rebate', a deal under which they pay the full retail price for an item, but get a portion of the money back a month or two later.

The catch: They must mail the requested proof of purchase to the distributor, and even provide personal details - often by a certain date as well.

The sales tactic, common in countries like the United States for more than a decade, is catching on here.

Among the reasons such promotions are offered is distributors and retailers are banking on some customers not bothering to do all it takes to get the rebate.

At Sim Lim Square, eight shops are selling a Kingston solid-state drive - a hard disk - with a coupon. A buyer who mails the coupon to the distributor with his address by Saturday can get a cheque for $22 in the mail in a month.

Mr Michael Tan, an IT manager with Convergent Systems, described customers' response to the deal as 'pretty receptive'. He did not disclose sales figures.

Convergent is a local distributor for the Kingston drive and other IT components ranging from motherboards to memory sticks. Mr Tan said Convergent was running the promotion with Kingston, but declined to reveal how the cost of the rebate was being split.

Larger, mainstream players are offering such rebates too. In a promotion that ended last October, Apple gave $199 back to customers who bought Apple computers with selected Hewlett-Packard (HP) printers priced at $199 or more.

Cellphone giant Nokia, in an ongoing Singapore-only promotion, is giving out a $25 rebate for its Lumia smartphones. Customers can get $25 back by buying that much worth of apps from the WindowsPhone marketplace. They have to e-mail their purchase receipts to Nokia.

Apple and Nokia declined comment.

Mail-in rebates are popular with manufacturers for a number of reasons: First, the rebates can be offered for only certain models in a product line without affecting prices of more successful ones.

Second, the rebates do not affect retailers' margins, which are usually a percentage of the retail price.

Third, the product's price will return to normal after the promotion, which is less likely to upset customers than moving to raise the price after a discount.

Fourth, some customers will forgo the rebate because of the hassle it involves. US research company PC Data said that only a third of American consumers at most will jump through hoops for it.

Consumers interviewed here said that although the rebate procedure was tedious, they got the rebate as promised.

Mr Vince Poh, 33, who bought a $2,000 Apple iMac with a $199 HP printer, is pleased that the $199 rebate means the printer was free.

'It was quite a chore as they wanted a lot of info about me, but the instructions were clear cut. I guess it's justifiable, as they need to verify your information somehow,' said the divinity student.

IT operations specialist Lee Seing Huei, who bought a $1,648 MacBook Pro with the $199 printer, agreed. The 24-year-old said: 'An instant rebate would definitely have been better, but they transferred the money to my account faster than I expected.'

Consumers need to be wary, though, and weigh the savings against potential privacy loss.

Of deals like the Nokia and Apple ones, which require disclosing one's bank account number so the rebate can be banked in, Consumers Association of Singapore chief Seah Seng Choon warned that one's account number is confidential, and that disclosing it opens up the risk of misuse.

'And if you disclose your mailing address, you must be prepared to receive junk mail,' he said, adding the risk of a security breach is greater when a combination of sensitive details is disclosed.

Convergent's Mr Tan said his company has no plans to data mine customers' details or sell them because 'this is the Facebook age, where customers are very vocal, so companies need to be very scrupulous with such promotions'.

Price-conscious consumers say they will probably continue going for post-purchase rebates. Mr Poh, for instance, said: 'I will do it again if it's a good promotion and I need the product.'



Firm keeps its service promise