Attack of the prepaid rebate cards

Attack of the prepaid rebate cards

It’s a disturbing new trend in the world of technology retailing — Rebates — but these aren’t the rebates from years ago… these rebates come in the form of prepaid credit/debit cards.

No longer will you receive that fancy paper check in the mail that can be deposited directly into a bank account.

The old paper rebate checks were a treat to discover in your mailbox, as if you were getting a paycheck back for making your tech purchase, albeit a small one. But alas, these days that doesn’t happen anymore, as most rebates now come in the form of a square piece of plastic that is “preloaded” with your rebate dollars. I’ve seen Visa, MasterCard and American Express prepaid cards.


What’s wrong with a debit/credit card pre-loaded with funds? You ask…

Well, you might think that a debit card loaded with funds would be more convenient to use compared to a paper check, but in most cases, I’ve found the opposite to be true. With a paper check, you deposit it and you’re done. Quick and easy. Refund received and added to your account balance.

With a prepaid card, you can run into all sorts of little snafus. I’ve found that many retailers and registers can have trouble processing these prepaid cards. Sometimes they can’t use them at all, other times they can only charge a certain amount to the card even though you might have more funds available on it. There are many hassles to be had.

If you don’t spend the entire amount of the card funds in one transaction, you’re then inconvenienced with trying to remember what the remaining balance is and to find a place to use that balance. It’s easy to forget what the remaining balance is and also easy to forget to even use the card again.

Why the switch to prepaid rebate cards?

So why have all these companies switched to using prepaid cards versus paper checks for rebates? It’s gotta be more expensive for the fulfillment of a prepaid card versus just mailing out a plain ole paper check, right? Initially, yes, but you’ve got to look at the entire picture of consumer behavior. I believe that many of these prepaid cards are getting lost, aren’t getting used or their entire balance is never fully spent. When you don’t spend the entire balance, the issuing company can recoup some costs, because it is as if they never paid you that amount. It’s a clever strategy by the rebate issuers to try and reduce their payout costs.

How do you get the most out of your prepaid rebate cards?

Spend them and spend them right away! Try not to leave a balance on the card. Use it at a gas station to fill up your vehicle in order to use up all the funds in one go. Keep track of your balances and be diligent about utilizing the entire amount.

I certainly wish that paper rebate checks were still the norm, but since they are not, I’ll be making the best of these pesky prepaid rebate cards.

Update: As @rax0r pointed out on Twitter, it might be worth it for you to get a free Square card reader and account to cash out your prepaid cards on your own. Square charges a fee of $0.15 + 2.75% per transaction.

About Wes Novack

Wes is a Technologist working in the software industry, with extensive experience building and managing highly available applications, services, and systems in the public cloud. He has extensive experience with online publishing and building internet communities. Wes enjoys hanging with his family, getting outdoors, skateboarding, hiking, pickelball, tennis, the vegan lifestyle, and a good cup of tea. You can find him on X (formerly Twitter) @WesleyTech.

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