Cash Rebates
Cash rebates are mostly offered in the factories so that they can heat up the dealer sales contests and so that they can move inventory locally, therefore most of the deals become public knowledge.
In this case I will consider the factories that deal with the vehicles. Due the dealers pay money to keep cars on their lot especially after a car has been on that lot for more than three months and they have added incentive to sell. They therefore offer to give it at a cheaper price than the set one so that they save the incurred costs. Therefore it is necessary to check the date of manufacture of the car you buy; if it has been in the showroom for more than six months it is worthy to note that some kind of dealer incentive has been placed on it.
Rebates are highly attractive to many consumers because of their provision of partial cash reimbursement for their purchases that doesn’t include tax. Many view it as reduction in product price rather than income. It is very advantageous to manufactures for because in the first place they encourage the customers to give their products a trial hence boosting the sales of the company and its visibility; it relives the excess inventory problems; it also attracts retailer interests. Therefore the rebates can help the company increase their leverage with retailers and develop brand loyalty and repeat business among potential clients over a period of time.
In fact they are the most effective means to establishment of product awareness to the consumers. Due to the mentioned benefits of the rebates we can note that these are sound business decisions.The percentage of the rebates offered that are paid back depends with agreements made and the product cost and the time the product has stayed in the showroom.
Reference
Royal, L.E. (2000) Reap the rebate. Black enterprise
Kandra, A. (2000) Rebate, rebate, who’s got the rebate, PC world
Smart Investing Article collection (2011) Rebates – Rewards or rip off? Kindle edition
Smart Shopper Article collection (2011) Save money on your purchases by taking advantage of rebates, Kindle Edition
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