Retail Trend: Rebates Turn to Plastic

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Next time you fill out a rebate, you might be surprised to get a debit card in the mail, instead of a check. This is because companies are increasingly turning to debit cards as a rebate, rather than giving you something that you can actually take to the bank.

It’s not just companies that are issuing debit cards as rebates. Flexo at Consumerism Commentary writes about his girlfriend’s experience as a New York teacher:

“More recently, the City of New York switched to prepaid Visa debit cards, offered by Chase Bank. ...If you want to use the reimbursements to pay yourself back for your spending on items for the classroom, you must visit a Chase branch to convert the card to cash.”

It is important to understand the restrictions on these debit cards. Some of them have expiration dates, while others come with “maintenance” fees. These terms can quickly eat into your rebate amount. Some companies, like Verizon (Stock Quote: VZ), will allow you to go online and cancel the debit card in favor of a check, but that requires an extra step.

If you do use a rebate debit card, you will probably have to let the cashier know your plans. And you may need to know exactly how much is on the card, so that the cashier can complete the transaction properly (especially if you plan to use more than one form of payment). Most rebate cards need to be run as "credit" even though they are debit cards.

When you receive your rebate debit card, be sure to familiarize yourself with the terms. If you aren’t careful, you may end up with less than you thought.

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