Rebate Company Admits Rebates Are A Scam

That’s the gist a reasonable person would gather from the language surrounding U.S. Patent No. 7,120,591, granted yesterday to Parago, the company behind Circuit City rebates.

The patent is for a system that 1) processes rebates online 2) encourages “breakage,” which is when the customer messes up the rebate process so the company keeps the money.

From the filing:

“The present invention satisfies a need for a more consumer friendly method for processing rebates that maintains a breakage rate …”

“The rebate processing system provides a user friendly interface, yet retains hurdles sufficient to maintain breakage.”

See, the plunger won’t tickle so much if you just focus on the colorful, rounded buttons.

Rebates to become more of a scam” [Hardware 2.0] (Thanks to David!)

Related: HOWTO: Rebate Whore


Edit Your Comment

  1. homerjay says:

    Wow, how blatent and glaring. Still, are you now not going to buy something because it carries a rebate? is there any way to send a message to retailers that we will no longer tolerate rebates?

    When I send in a rebate I make a photocopy of everything going into the envelope and hang it on my pegboard. After a couple months start laying into them.

  2. Wow is right, homerjay.

    I can’t even come up with anything to say to describe my annoyance at this one. Wow.

  3. WindowSeat says:

    I do pretty much the same thing as homerjay. I’ve only been stiffed once on a rebate, I made some minor mistake on the form and it was sent back. I corrected the mistake, mailed it out again and got the envelope back, stamped “P.O. Box Closed” even though it was still within the rebate dates. Weasels.

  4. homerjay says:

    I made a mistake on a rebate form thus summer from PepBoys. The processor corrected it for me and pushed it through. I was shocked.

  5. Triteon says:

    There are two other disturbing things here:
    First, you can patent things like this. Second, the application was filed almost 6 years ago. Or maybe that’s a good thing, maybe the applicants have lost interest by now. Maybe…?

  6. dandmb50 says:

    I have always said this that the rebates is just a ripoff. I just found out recently that it is true.
    I had purchased a Sirius Radio in Niagara Falls, NY, 8 months ago and filled out the paperwork that I received from Best Buy. I was calling Sirius Radio about another problem and asked them if the rebate check had been sent to me. The clerk said NO and said she would credit my account, which she did.
    So if I don’t challenge the rebate amount, I wouldn’t get the credit?
    Sounds a little screwey to me, and should we trust them?
    Just give us the rebate at the checkout, since only about 16% of people apply for the rebate they probably don’t wanna do that.


  7. I’m totally amazed that you can patent something as general as refusing rebates.

    Next thing you know, they’ll let someone patent a voice mail system that makes it hard to reach a human.

  8. chrisgoh says:

    Basically, they want a patent on borderline illegal activity. Sound like a drug dealer wanting to patent a way to make drugs undetectable by sniffer dogs.

  9. orlong says:

    The reason they dont just give you the rebate at the checkout is because they are often times manufacturers rebates. The store you buy it at isnt giving you the rebate the manufacturer is. If the retailer gave you the rebate at the checkout, they would be out the rebate amount

  10. lestat730 says:

    This doesn’t surprise me one bit. Several years ago I worked for the Staples office supply store. As many consumers may know they are huge into rebates, even going as far as to put the price after rebate in big letters with the up-front price below it in fine print. I can’t tell you how many customers would come to the register and be very upset after finding it would cost $5-15+ dollars more then what they thought. The worst thing was everyday we would get at least 10 people complaining that they never got there rebate after many months of patiently waiting. Personally I’ve come to never trust rebates from anyone. I agree with homerjay, it would be great to really get it across that consumers will not tolerate rebates.

  11. chrisgoh says:

    Lestat, that is surprising. Staples is probably the best rebate out there. Bought some DVD’s yesterday, input the rebate on-line when I got home, already got a confirmation e-mail. Based on past experience, I’ll have the check in hand in a few weeks.

  12. 1964F100 says:

    The last rebate I applied for was for a Staples purchase last March. Not only was their online rebate process, well, easy, but they also accepted my PO Box address. Few rebate programs allow that, and that’s a very sad situation.

    Nothing gets my goat more than “No PO Boxes accepted” in the fine print. And with Patent #7,120,591 ensuring this stipulation is enforced and the vendor profits, it’s all the more annoying!

  13. Julia789 says:

    I was supposed to get a $200 rebate on my top-of-the-line washer & dryer set from 1999 at Circuit City (back when they sold home appliances). It was the reason I purchased that set – to get the better brand at a rebated discount for the same price as the lessor brand.

    The reason they gave me? The manager didn’t sign the form in the correct spot. They said there was no way to re-apply or get the manager to sign in the correct spot.

    They knew perfectly well what they were doing. I bet that manager got some kind of bonus for scamming people out of rebates.