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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Another point that I haven’t seen mentioned is how beneficial it is to the retailer to seem like they are giving a high value item for a discount. It’s perceived as better due to the price, and an actual direct sale will cheapen the value in the perception of many people because people often think it was overpriced.
When someone sees an expensive item at 40 or 50 percent off there is often the thought of how much did it even cost them in the first place, this must have been way overpriced.
If the retailer can get as many different shopper types in, they stand to earn more money, and a rebate is how people get the idea of a sale but it doesn’t cost the store anything, monetarily or otherwise.
Another point that I haven’t seen mentioned is how beneficial it is to the retailer to seem like they are giving a high value item for a discount. It’s perceived as better due to the price, and an actual direct sale will cheapen the value in the perception of many people because people often think it was overpriced.
When someone sees an expensive item at 40 or 50 percent off there is often the thought of how much did it even cost them in the first place, this must have been way overpriced.
If the retailer can get as many different shopper types in, they stand to earn more money, and a rebate is how people get the idea of a sale but it doesn’t cost the store anything, monetarily or otherwise.
People are suckers for the idea of a sale. Buying something for 400 is not as attractive as buying something that is priced at 500 for 400.
Same reason why 399 is psychologically more attractive than 400.
People are suckers for the idea of a sale. Buying something for 400 is not as attractive as buying something that is priced at 500 for 400.
Same reason why 399 is psychologically more attractive than 400.
People are suckers for the idea of a sale. Buying something for 400 is not as attractive as buying something that is priced at 500 for 400.
Same reason why 399 is psychologically more attractive than 400.
Because a lot of consumers won’t follow through and get the money back. So they get the boost of sales from the anticipation of the 100 savings without necessarily losing the money.
Because a lot of consumers won’t follow through and get the money back. So they get the boost of sales from the anticipation of the 100 savings without necessarily losing the money.
Because a lot of consumers won’t follow through and get the money back. So they get the boost of sales from the anticipation of the 100 savings without necessarily losing the money.
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.
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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