Overview of Rebates
A rebate is an amount paid by way of reduction, return or refund on what has already been paid or contributed. Types of rebates include purchase price, challenge, escalating, group, guarantee and charitable refund.
High-value rebates can be used for expensive, high-margin products to generate possible trial, infrequently purchased products or products with low market value. Lower-value rebates should be used for frequently-purchased products with low brand loyalty. Rebates can also be used for competitive promotions and to establish consumer databases.
Advantages of Rebates
- Attract attention.
- Offer a substantial discount without misredemption problems.
- Reward non-users of coupons.
Disadvantages of Rebates
- Affected by rising postage costs.
- Reward loyal users.
- May be less appealing to consumers who want immediate gratification.
When planning a rebate, marketers should consider the following:
- Removable proof-of-purchase.
- Offer length.
- Complexity (complex offers can depress redemption).
- Exposure vehicles (in-store, in-pack, on-pack, etc.).
- Percent reward.
- Copy.
- Slippage (rebates sent to consumers, but never cashed).
Source: PMA
Published in
Rebates
