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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Sometimes it’s because they really are hoping not everyone will bother to get the money back. It’s a form of “price discrimination”. Basically they know some people are happy to pay $500 and don’t have time to waste getting $100 back, while other people would happily jump through hoops to get $400 and wouldn’t be willing to pay $500. So that way they maximize the money they make from each person.
However, another reason is because it isn’t the same entity taking your money and offering the $100 back. For example: the store sells the product for $500. The manufacturer wants to get rid of inventory so they can introduce a new model, so they offer $100 money back coupons to get more people to buy their product. The store isn’t involved at all, the money back comes directly from the manufacturer to the customer.
There might be other reasons!
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