Rebates vs. Discounts: What’s the Difference?

When shopping for home appliances, furniture, electronics and other big-ticket items, you may see different kinds of promotions that seem similar. Both a manufacturer rebate and a product discount might seem like good ways to save money. But how do you know which is the better deal? We break down the pros and cons of each type of promotion so that you’ll know what’s best for your particular circumstances. Read on to learn more about the key differences between rebates and discounts – and where they can be useful for your personal shopping needs.

 Rebate Basics

A rebate is a cash-back offer that goes towards your purchase. Usually, the company issuing the rebate requires you to send in a few pieces of information to receive the money – often an itemized receipt, proof that you qualified for the rebate, and an itemized list of any other promotions you participated in. Not all rebates are created equal. Many are offered by third-party retailers, like Amazon, or the product manufacturer itself. Some rebates come in the form of a store gift card, while others are cash-back rebates. 

Product Discounts

A product discount is a markdown on the price of the item you’re purchasing. Discounts are often offered as a short-term promotion by the retailer, although some may be a permanent price reduction. The retailer is still charging the same price for the item as they normally would, but they just give you a bit of extra cash to make the deal more enticing. Some discounts are a set percentage off the item’s price, while others are a set dollar amount. You’ll usually see discounts listed on the item’s page, or on signs at the store where you’re shopping. You can also check online stores to see if they offer discounts on certain items.

Which is better? Rebates or discounts?

The main difference between rebates and discounts is that rebates are tied to your purchase – while discounts are tied to the retailer’s business practices. Rebates are paid out by the manufacturer or third-party retailer, while discounts come from the store where you made your purchase. The rebate is tied to your specific purchase; the retailer is simply passing along the savings to you.

Rebate Tips

Make sure you qualify for the rebate before purchasing an item. Some require you to hold a loyalty card from that store or purchase a specific product (like an energy-efficient appliance) to qualify. Some require you to make the purchase on a specific day, or during a certain timeframe. Review the terms and conditions of each offer carefully. Make sure that you have all the necessary information on hand – and that it’s correct, too. Some rebates may require you to send in a receipt, or include a barcode on the item’s packaging. Be sure to follow all instructions exactly as written. Be sure the rebate is paid out by the manufacturer, and not a third-party company. If a third-party company is offering the rebate, it’s likely a scam.

Discounts: Pros and Cons

Discounts may seem like an offer too good to pass up, but there are a few things to keep in mind before you decide to purchase an item with a discount. First, be sure that the store is still in business. Some stores may go out of business and close their doors, taking any discount with them. Second, be sure the item you’re purchasing is actually discounted. You don’t want to pay full price for an item only to discover it was discounted by 20% – that would be a wasted purchase. And finally, be cautious of the item’s quality. If a store is offering steep discounts, there may be a reason. Perhaps the store is trying to get rid of an older model of the item (which may break down more easily) – or they have too many in stock.

How to Find Rebates

Check product websites, as well as the manufacturer’s website. Some manufacturers offer rebates, too. Check third-party websites, like These websites track retailer rebate offers and let you know which ones are available when you purchase an item. Look for rebate apps on your phone. Some retailers offer rebate apps that let you scan your receipt to see if you qualify for a rebate.

Also Read:

How Sales and Marketing Are Different – Understanding Their Differences

How to Find Product Discounts

Search for coupons in your store’s app. Many retailers offer coupons through their apps. Visit the retailer’s website to see if they offer coupons, gift cards or other discounts. Many times, they will list these on their homepage. Sign up for a store loyalty card. Many retailers offer discounts to customers who have an active loyalty card. Look for online coupons or promo codes. There are many websites that offer online coupons or promo codes you can use at online retailers. 

Rebates: Pros and Cons

Pros Rebates are cash you receive after purchasing an item; you don’t have to do anything to earn it. Some rebates are easy to claim. Many retailers offer rebates that send you a pre-loaded gift card after you claim it. Some rebates are open-ended. If you buy a printer, for example, and it breaks down – but the manufacturer is no longer in business – you can still receive a rebate for your purchase. Cons Rebates can take weeks or even months to be processed. Some rebates require you to fill out an itemized receipt, or send in your original receipt. Rebates often require you to purchase a specific item, or items, from a specific manufacturer. Some rebates may be expired or no longer accepted by the manufacturer. Rebates may also require you to subscribe to a mailing list or sign up for email offers.

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