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.


Price Discrimination Product Demand Redemption Rate Price Discriminat Price Hike 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Springer-Verlag Berlin Heidelberg 2008

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