A rebate is a deferred discount, issuing a percentage of the price in cash after the product is purchased. Popular with consumers, they are often associated with the sale of new cars. Rebates typically have redemption rates less than 50%, according to John Courville, professor of marketing at Harvard Business School. This means that the publicized discount can be effective in generating additional sales while the lower redemption rate reduces its cost.
On the negative side, failure to promptly redeem a rebate can cause bad customer relations. Because of growing complaints, some companies have discontinued rebate programs.