Are Debit Cards Better Than Cash Rebates?

11:15 AM, Oct 29, 2013   |    comments
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Washington, DC (WUSA9 Call For Action)--When you do your holiday shopping you may find that you are offered a prepaid debit card instead of a cash rebate.  This is significant because nearly 80% of consumers say that rebates are a factor in buying one product over another.

How have consumers responded to this change?

The problem used to be rebate runaround.  Consumers tried to fulfill all the requirements and found themselves denied the money they were led to expect when they purchased the product offering the rebate. 

Well, the dialogue has changed, now many rebates are in the form of prepaid debit cards. 

MORE: Debit Cards

There are a number of reasons for concern.  For example, some of the debit cards charge a monthly fee, quickly eating up the amount on the card.  Others may be restricted in how you use them.  For example, suppose you want to make a purchase but the amount leaves a few dollars on the debit card.  Will you be able to redeem that amount?  Or what if you want to purchase a more expensive item and will you be allowed to use the debit card to pay for part of the item?  

One suggestion makes a lot of sense, go to the grocery store and purchase a gift card with the debit card that way you will be able to buy groceries and use the full amount of the card. 

What should consumers do to protect themselves from problems?

Keep in mind prepaid debit cards that are issued as rebates are not treated the same way as gift cards. These prepaid cards are exempt from the rules regarding fees and expiration dates that apply to gift cards.   

MORERules on Prepaid Cards for Rebates 

Don't put the card in a drawer and forget it!  Instead, use it immediately so it doesn't expire or decline in value because of monthly fees.  Make sure to read the fine print about the card and its use and fees.  Some of them may only have fees if the card isn't used for a number of months. 

If you lose the card notify the issuer immediately.  You may or may not get it replaced, depends on the company policy.

What about returning an item that offered a rebate?

It depends on how the store handles the prepaid debit card rebate.  If the product meets the return requirements of the store it is likely the rebate debit card value will be deducted from the refund amount.  Ask about the return policy when you make the purchase. 

Written By: Shirley Rooker, Director, WUSA9 Call For Action

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