Reader Question: How do cash-back rebates work on electronics and other items?

dave_ramsey I like this question. Most consumers don’t think about how the process works. They only care that it’s benefitting them from a financial standpoint.

Let’s say you buy an item for $1,000, and you get a cash rebate for $100. Basically, you just paid $900 for that item, right? So, what the companies are trying to do is incentivize certain retailers to buy a particular product or amount of that product, yet sort of protect the sticker price in the minds of the consumers. To me, it’s really a little ridiculous. Why not simply take off the money, and price it at $900?

That keeps retailers from jerking around with the margins. It purifies the process a little bit, but it adds to the hassle.

Dave Ramsey

Dave is the author of The New York Times best-selling book Financial Peace. He is also the host of the nationally syndicated The Dave Ramsey Show, and is a regular guest on television. All of his financial counseling is based on biblical truths. You can hear Dave from 9 a.m. to 11 a.m., weekdays online at Send your questions He resides with his wife Sharon and their three children, Denise, Rachel, and Daniel, in Nashville, Tennessee.