How do free after rebate promotions work? How can they afford to give away free product?
I can think of two ways: 1. They know that not everyone will cash in on the rebate. Some customers will forget about it until the deadline has passed, others will lose their receipts or UPCs, etc. They can study past rebate programs to predict the number of rebates they’ll actually have to mail out. 2. Even if you only consider the customers who do get the rebate, the company still has their money until the rebate is mailed out, and if the volume is high enough, they can make some profit just by investing the money for 8 weeks before mailing out rebates.
