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.
In: 40
You get to realise the sale price into one bucket and take the cash back refund out of another budget. It is all funny money as the end result is the same but you get to say your retail margins are strong but your marketing expenses (where the refund comes out of) are higher.
You get to realise the sale price into one bucket and take the cash back refund out of another budget. It is all funny money as the end result is the same but you get to say your retail margins are strong but your marketing expenses (where the refund comes out of) are higher.
For car companies at least, and possibly others, it’s so they can reduce the price of the car without reducing the actual list price of the car. Changing the list price can have various tax, insurance, legal, business implications. Can be time limited offers, etc. Not an expert tho, maybe someone else knows more!
Some manufacturers have agreements with their authorized retailers that the retailers will only sell at specific prices (MSRP) so the products are never on sale to help keep the premium brand image. The retailer can sell at MSRP and then give a gift card or some other rebate to both stay in compliance and edge out other retailers. Target seems to do this.
Some manufacturers have agreements with their authorized retailers that the retailers will only sell at specific prices (MSRP) so the products are never on sale to help keep the premium brand image. The retailer can sell at MSRP and then give a gift card or some other rebate to both stay in compliance and edge out other retailers. Target seems to do this.
You get to realise the sale price into one bucket and take the cash back refund out of another budget. It is all funny money as the end result is the same but you get to say your retail margins are strong but your marketing expenses (where the refund comes out of) are higher.
Some manufacturers have agreements with their authorized retailers that the retailers will only sell at specific prices (MSRP) so the products are never on sale to help keep the premium brand image. The retailer can sell at MSRP and then give a gift card or some other rebate to both stay in compliance and edge out other retailers. Target seems to do this.
(Money back = rebate): An instant rebate is a marketing ad that works just like any sale price. A mail-in rebate relies on layers of inconvenience such that the percentage of consumers who actually end up having the rebate redeemed is somewhere like 20–68% (20% of all sales, but 68% if you consider only the consumers who likely only bought the product for the explicit intent of redeeming the rebate). ([WP: Rebate](https://en.wikipedia.org/wiki/Rebate_(marketing)#Types_of_rebates))
Sales tax. In general banks will only lend up to the MSRP of vehicles or other high cost consumer items. But the out the door cost includes sales tax. In current America there’s many buyers who can’t afford to make an initial payment of even the cost of sales tax. So they raise MSRP and give cash back to pay sales tax. In reality they’re just financing the sales tax.
Sales tax. In general banks will only lend up to the MSRP of vehicles or other high cost consumer items. But the out the door cost includes sales tax. In current America there’s many buyers who can’t afford to make an initial payment of even the cost of sales tax. So they raise MSRP and give cash back to pay sales tax. In reality they’re just financing the sales tax.
Latest Answers