Unredeemed Rebates Bolster TIVO

One of the most powerful marketing tools these days is the mail-in rebate. However, in order to get the benefits of rebate savings, consumers have to actually mail in their rebate forms.

We all know how rebates work: the consumer pays full price and any applicable sales taxes for an item, and then, at some future date, the consumer is reimbursed for a portion of the product's price. The manufacturer, in the meantime pockets the full purchase price and invests it with interest, while the government gets any applicable taxes on the full purchase price. Meanwhile, the manufacturer is betting that you won''t claim your entitled rebate, while the consumer is betting that he/she will.

In the case of TIVO, it seems that while it added 319,000 new subscribers, 50,000 of them did not take advantage of their entitled 100 dollar rebate by failing to mail in their product rebate forms. As a result, 5 million extra dollars stayed in TIVO's bank account, which made a signifigant difference in their latest financial numbers. For additional details, check out the report from Silicon Valley.com.