The Economics of Manufacturers’ Rebates
In Chap. 9, we noted how many product prices advertised in Fry’s Electronics full-page multicolor newspaper ads ended with 9, such as in $2.99 or $299. What is also notable about Fry’s ads is how many of the products carry manufacturers’ mail-in rebate offers. On the day I began writing this chapter, Fry’s included 53 products in its full-page ad, a third of which carried manufacturers’ mail-in rebates. Two of the advertised products had two rebate offers, with one declared “Free” after the rebates were deducted from the posted price. But then, Fry’s ad mirrors a national apparent affection among manufacturers for rebates. About a third of all personal computers and their peripherals and over a fifth of all digital cameras, camcorders, and LCD TVs are sold with rebate offers. Overall, according to one long-time rebate researcher, there are about 400 million rebate offers annually in the USA alone, all worth about $6 billion.
KeywordsPrice Discrimination Product Demand Redemption Rate Price Discriminat Price Hike
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