The whole money back thing makes absolutely no sense. If you are going to sell something for $500, then say you will give $100 back after purchase, why not just make the product $400? Is it some sort of sleezy marketing scheme? ELI5. Please! Make this make sense.
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I remember as a kid in school this came up and I agreed with you: the best thing to do is lower the price!
Turns out I was just too idealistic and honest. Teacher told me it’s better to do the rebate because fewer people would take advantage, so you rope more people in with the promise of a lower price, but don’t have to actually end up offering that price to everyone.
On top of that, in the specific cases of cash back offers like these, it’s often the manufacturer or distributor offering it to clear inventory. So the store still gets their full amount and the “backend” pays the bounty to move inventory.
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