Dell Opts To Drop Most Rebates

Nov 27, 2006 (11:11 AM EST)

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Shoppers heading to Dell's Web site this holiday season will see far fewer rebates on computers and consumer electronics.

In an attempt to simplify the shopping process, the Round Rock, Texas, computer maker is selling products at the rebate price. "Rebate free doesn't mean they're getting a higher price," Dell spokesman Mike Maher said Monday. "We're translating the savings into lower-priced products."

Dell decided to drastically reduce the number of rebates, discounts, and other promotions based on customer surveys. Shoppers preferred to see one price for a product, rather than have to go through the hassle of deducting promotions.

The company started reducing the use of rebates several months ago, beginning with its televisions and Inspiron notebooks. "The feedback from customers was resoundingly positive," Maher said.

Dell today offers fewer than 10 promotions per product line, versus as many as 50 two years ago. Dell last week added its Dimension desktop computers to its rebate-free line of products.

The number of promotions could decline further, but "I don't think we'll get to a point where there won't be some incentives," Maher said. Among the discounts Dell will continue to offer on some products are "instant-savings" promotions at checkout to try to convince shoppers to become buyers.

Fewer rebates are expected to make it easier for Dell shoppers to compare prices on the Web, since they can easily take the one price with them in looking at similar products from competitors. Making comparison-shopping easier is important, since surveys show that people routinely visit several retail sites to check prices before making a purchase.

Dell has embarked on a major push to improve customer service to boost slowing revenue growth. In October, Hewlett-Packard toppled the company from its perch as the world's largest PC maker. Consumer Reports this month rated Dell as the fourth best place to shop among manufacturers that sold directly to consumers. Apple Computer topped the list, followed by Lenovo and Hewlett-Packard, respectively.