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    Cash rebates: sound business practices? Ethical? What percentage are actually paid?

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    Among the cash management techniques used by most businesses are those that slow down their bill payments. A good example for this is "Cash Rebates" offered on household items like computers and other electronics.

    Are these practices sound business decisions? Are they ethical? Explain.

    2. What percentage of the rebates offered are actually paid?

    Select a business you are familiar with and explain whether you would recommend this business use cash rebates.

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    Solution Preview

    Cash rebates serve a variety of purposes. Not only do they allow
    businesses to hold on to cash from a sale and collect interest on it
    for a period of time, but they provide businesses with valuable
    information about the marketplace and their customers. Furthermore,
    cash rebates are more efficient promotion than a simple price
    reduction because not everyone who buys the product will apply for the

    As long as the consumer is informed that the selling price includes a
    cash rebate prior to the sale and in all advertising, and provided
    that the procedure for applying for the rebate is clearly disclosed
    and the rebate is paid according to those terms, then it is an ethical
    business practice. No one is forced to apply for a rebate, and as
    long as they understand before they make the purchase that they will
    not receive the "rebate price" without ...

    Solution Summary

    In a 549 word solution, the subject of cash rebates is thoroughly explored.