Let's say you're shopping for a new cellphone. Let's say that, like me, you thought it'd be kind of cool to own one of those sleek Razr handsets. So let's say you go to T-Mobile's website and there it is, for the nifty price of $49.99.
But wait. Clicking on the ad you discover that the phone's starting price is $159.99. Then comes $60 off as an "instant discount." Then comes another $50 off in the form of a mail-in rebate. And that's how you get to that $49.99 offering price.
An L.A. lawmaker thinks he has the solution. More from him in a moment.
First, are mail-in rebates a total racket or what? They don't represent the out-the-door price to consumers. They typically involve the sharing of a significant amount of personal data. And you usually have to jump through hoops to get your money -- if, that is, you ever do get your money.
Lona Luckett, a spokeswoman for the Better Business Bureau of the Southland, said the bureau had received nearly 800 complaints so far this year involving rebate clearinghouses, the companies that retailers and manufacturers use to process claims.
If you were to factor in individual companies that rely heavily on rebates, such as wireless providers or electronics sellers, she said the number of complaints would be "considerably higher."
"Often, people end up waiting six, seven, eight months for their rebate check," Luckett said. "A lot of times, it seems like companies find reasons to disqualify people from getting their rebates."
By some estimates, hundreds of millions of dollars in rebates go unclaimed for various reasons every year.
In my case, I filled out all the information on the rebate form provided by a T-Mobile dealer and mailed it in. About a month later, I got a letter back saying I'd omitted some number that was on the box my cellphone came in, although I'm pretty sure I filled in every blank on the form.
Needless to say, that cellphone box had been thrown out weeks earlier, so now I couldn't qualify for the rebate no matter what I did.
A T-Mobile representative was unavailable for comment.
My feeling is that if a retailer or manufacturer is willing to cut the price on a particular product, it should do so at the point of sale. Anything else smacks of sneakiness.
State Assemblyman Mike Feuer (D-Los Angeles) has another approach. His legislation, AB 1673, would give retailers a choice: Either they advertise a product at the higher, pre-rebate price to avoid any confusion, or they immediately honor the rebate at the cash register, rather than make customers go through the trouble (and uncertainty) of the mail-in process.
Feuer's bill was approved by the Legislature and is now on the governor's desk, awaiting a thumbs up or thumbs down from the big guy.
"Too many people are enticed into a store by advertisements that don't clearly reflect what they're going to have to go through to get that price," Feuer told me. "There's no question that the difficulties inherent in the rebate process are intentional. It's done on purpose."
Not surprisingly, business interests are fighting Feuer's bill.
"Legitimate frustration about the rebate process is being imposed on retailers, who aren't the problem, rather than manufacturers, who are the problem," said Pamela Williams, vice president of the California Retailers Assn.
Denise Davis, a spokeswoman for the California Chamber of Commerce, said AB 1673, if passed into law, would lead to elimination of rebates.