Making Shopping Even More Expensive in Rhode Island (?)
Here’s the question for consumers: If you were intending to purchase an item of moderately high price — a flat-screen TV, for example — would you buy it in Rhode Island or head to Massachusetts if you could get a $50–100 mail in rebate in the northern state (on top of the lower sales tax, of course)?* I wouldn’t state it as a certainty, but I’d say that such an option is a reasonably foreseeable consequence of this legislation:
Under the law, retailers advertising a manufacturer’s rebate on any sale item must apply the rebate amount at the time of the sale and complete the rebate redemption process themselves, rather than requiring the consumer to do it.
The law prohibits retailers from advertising a “net,” or final, price for an item that includes a payment from a manufacturer — unless the retailer gives the buyer the amount of the manufacturer’s payment at the time of the sale.
“In many cases, [companies] assume consumers are going to forget all about it,” allowing the businesses to keep the money, [bill sponsor Rep. Brian P.] Kennedy said. “Offering a deal and then making the consumer jump through hoops to get it is inappropriate and not all that great a deal.” …
Retail-industry research estimates that 40 percent of all rebates are never redeemed, said John Palangio, director of the consumer protection unit for Attorney General Patrick C. Lynch. That rate translated into $500 million in unredeemed rebates last year, Palangio said.
Personally, I’d always assumed that one of the reasons companies offered such large rebates through a mail-in process was that they expected not to actually have to pay a significant number of customers, but it never occurred to me that such a game ought to be illegal. If a rebate amount isn’t worth the effort to claim, it seems to me, then it wasn’t a decisive factor in the purchase. (Curious that protection of citizens with inadequate self-agency doesn’t play, among our legislators, when it comes to preventing the bad deal of gambling.) Making the rebate game illegal seems likely to make it go away altogether, particularly considering that manufacturers and retailers already offer on-the-spot discounts and rebates as a separate category.
How deeply does our society have to dig its myopia-permitted hole before we realize that we — particularly a “we” in such a small area as Rhode Island — can’t simply insist that people and companies behave as we dictate, in eschewal of their own interests? Perhaps I’m too cynical, but I can’t help but wonder whether the legislation doesn’t have more to do with the following than with consumer protection:
Last year, Rhode Island joined 39 other states in a federal lawsuit against Young America Corp., a Minnesota company that processes rebates for manufacturers and retailers. State treasurers say the company, the nation’s largest rebate processor, improperly keeps unredeemed rebates that should be turned over to the states as unclaimed property.
That lawsuit is pending.
When it comes to lawsuits, the states are becoming a frightening maw, indeed — always in search of rebates, no matter the difficulty of the process.
* With the possible added burden of having to receive the check via an out-of-state friend.