Allen Gregory

How Do Online Rebates Work

If you can buy it online, chances are there’s a rebate for it somewhere. Whether it’s physical goods, like clothing, or a less tangible service, like web hosting, there are cash incentives for almost anything you might want to purchase through the internet. How is this possible?

Online rebates function quite a bit differently from traditional rebates. The thought process behind traditional rebates is that the lower advertised price (after rebate) promoted by a store would draw a lot of customers in to purchase the discounted items. They pay full price and then have to fill out paperwork to redeem their rebate (including submission of proof of purchase and receipt). Very few people who purchase the items actually complete all the required steps to qualify for the rebate.

In the online world, this is sometimes still the case. These are typically manufacturer rebates, which operate under the traditional concept of a rebate. However, today a lot of third party rebate sources exist that operate under a completely different model.

Most companies that make sales online offer a commission or bounty to other websites who can provide paying customers. Even major retailers like Best Buy and Gap are willing to pay a portion of sales to the site that supplies the customer. If you can drive enough traffic to these sites, you can make a substantial amount of money.

Rebates frequently come into play here – companies who receive a commission (we’ll say 5 percent for this example) will decide to cut their earnings in order to entice more people to click through their links. For instance, they might take a 3 percent commission and offer the other 2 percent back as a rebate.

These types of rebates are particularly appealing to consumers, because the rebate requirements are satisfied simply by purchasing and filling out an online form. There’s no paperwork to deal with, no proof of purchase to cut out, no mail to send, and frequently no check to cash, as most of these rebate payments are made electronically.