Any question answered...

To my young ears, that sounds like free money. But where does the money come from? From the retailer?

the manufacturer typically. it's cheaper for them to do that than discount the price as only some of the people buying it will get money back (due to laziness) than if they dropped the price up front.

it's very popular in the states.

Can also be written off against corporation tax in some US states.

The old management consultant adage of "you don't pay tax on a loss" springs to mind.

Even more financial tomfoolery can be had if the rebate is issued from an EU branch and redeemed via a US branch.