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    The Ethics of Cash Rebates

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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.

    1. Are these practices sound business decisions? Are they ethical? Explain.
    2. What percentage of the rebates offered are actually paid?
    3. Select a business you are familiar with and explain whether you would recommend this business use cash rebates.

    I need help with the first two questions and some general recommendations for the third question would be helpful.

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    https://brainmass.com/business/cash-management/the-ethics-of-cash-rebates-47092

    Solution Preview

    Please see the response below. I hope this helps and take care.

    Given: 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.

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

    It depends. For example, some rebate prices can be misleading advertising. And since they are, I believe that they should severely be curtailed. Many people make a point of not purchasing items that have an advertised price that turns out to be after mail-in rebate in fine print. I ignore such ads, and shop elsewhere almost every single time. These are considered unethical business practice, when they are misleading the public.

    However, there are also ethical merchants that show the real price in large bold print, and advertising rebate available, or fill out the form at the cash register and give the customer the instant savings. Any merchant who emphasizes the price after submitting a mail-in rebate to the manufacturer is unethical at the least in my opinion. In fact, some peoples boycott merchandise from manufacturers who encourage this practice (http://reviews.cnet.com/5208-7810-0.html?forumID=77&threadID=97889&messageID=1120068).

    However, most of the time you can shop around and find a comparable item at the same price without dealing with rebate forms. It's just a marketing ploy to get your name and address so you can be bombed with junk mail. Why can't a company who sells a product just give you a good price without getting your personal information?"

    Obviously, we don't have to look far to find examples of rebate scams that are not considered ethical or best practice business practices for sure. ...

    Solution Summary

    In regards to cash management techniques, this solution explores whether or not using cash rebates is a sound business decision. The ethical implications are explored, such as the percentage of cash rebates that are offered compared to those paid. Then, it discusses recommendations that could be applied to a specific business about whether or not to offer cash rebates as a cash management technique.

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