How do companies make money selling items with full price mail-in rebates?

Sometimes these rebates are on products, such as printers, which will earn the company much more profit in selling you the supplies for it, such as cartridges, than they earn on the product itself. They eat their profit on the initial purchase on order to reap the benefit of having you hooked on buying the ongoing supplies.

They're making a wager. The companies are betting that a significant number of people will purchase the "free" product, and then either forget or decide it's not worth it to fill out the rebate information. That way, it's like they sold it to you for full price. They're also betting that a certain (probably high) percentage of customers will fail to fill out the forms absolutely perfectly, and then they can simply "disqualify" that rebate. In the end, while many people will buy the "free" product, only a few of these are likely to actually get their money back. While they do have to pay back a few people, since more people probably bought the "free" item than normally would have, they still make a tidy profit.

Really it is simple, they take the price you pay before the rebate and invest it in the company (or in market) and make a profit-how they can afford offering full price rebates. Then they give your full price rebate and keep the rest as profit; usually only time much lower rebates (let alone full price rebates) happen is when they cannot sell hardly any of the products, thus what little profit was left (from investments in their company or other companies) is profit that could not be gain before rebates.