ETHICS EXERCISE

Sally Burke works for Hi-Tech Electronics. Her responsibilities include selecting items to advertise in her company's Sunday newspaper FSIs. One hot item is a 50-inch flat-panel plasma TV. The list price is $4,999, but her manager tells her to advertise it at $3,999, since customers can apply for a $1,000 mail-in rebate. The advertised price has attracted many people to buy the TV;

however, Sally has heard several complaints from customers who found the rebate process unusually complex and were denied a rebate because the manufacturer claimed they hadn't provided the required information. She would prefer to advertise the "real" list price, knowing that customers are not guaranteed to receive a rebate.

Questions

1. Is it unethical to advertise products at their post-rebate price in order to increase sales? Why or why not? What is another sales promotion method Hi-Tech Electronics could use to persuade customers to buy their plasma TV at the store?

2. Rebate programs are commonly used by electronics manufacturers because the rebates arouse consumers' interest in buying products; yet only half of purchasers ultimately claim their rebates. Is a rebate program itself unethical if the manufacturer knows consumers are unlikely to receive their money?

3. Visit a local electronics store-or Web site-and find a product being sold with a mail-in rebate offer. Are the rebate instructions clear? Would you take the time to complete the process?