Once you’ve decided that offering a rebate program is a strategy you’d like to implement, you and your team will be faced with deciding which rebate reward you’ll offer your participants.
In the past, approved rebate participants would receive a check via mail. Today, there’s a variety of reward options, from checks, gift cards, physical prepaid cards, digital rewards, and more. It’s up to you to decide which rebate reward works best for you and your customers. Below, we’ve explained the benefits of using prepaid rebate cards. Take these into consideration when deciding which reward options to use for your rebate program.
Prepaid Rebate Card Benefits For Your Company
1. Cost efficient
Prepaid rebate cards provide your business with measurable cost savings when compared to issuing checks in two ways. First, you’ll save in labor costs and second, in bank fees.
Outdated manual issuance systems require a serious amount of labor. This ultimately drives up the cost your business pays and takes away from what you’re able to reward your customers.
Second, as a company offering checks as a rebate reward you should know that the Federal Reserve charges banking institutions clearing fees to process or cash checks. Fees which the banks then markup and pass along to account holders. Since consumer accounts are typically charged monthly fees, they are not charged clearing fees per check. Instead, business accounts–you–are charged.
See the latest Federal Reserve check processing fees under various circumstances. For more on how the Federal Reserve processes checks, read here.
A digitalized, automated system like a prepaid card program requires far less labor and won’t result in increased bank fees. Therefore, it costs you and ultimately your customers less–everyone wins.
And if you really want to cut the cost of your rebate program down, consider outsourcing fulfillment altogether. See what we offer in the way of customer rebate fulfillment and processing solutions.
2. Data collection
Similarly, the amount of manpower that goes into manually organizing, inputting, reporting, and maintaining data collected from a rebate program that offers paper checks is costing your business big time.
Not only that, but when you offer prepaid rebate cards as a reward option, you’re likely to see improved response rates. Thus, your company will gain valuable insight into your customers–insight you might have otherwise lost out on by offering another type of rebate reward.
Looking for someone who will work with you to determine what information is needed from your customers, help you gather that information, and organize it in a way that is easily digestible for your company’s needs? We know someone!
3. Branding opportunities
When you offer your customers any type of reward, they directly associate that reward with your company. Allow us to explain the psychology behind this.
When a customer receives a reward check from your company, they will most likely deposit it and end up putting it towards a bill or some other fixed cost (not so rewarding, though the money does have to come from somewhere some might argue). With a check, you lose out on the opportunity to tie your brand’s name to a positive reward and spending experience.
With a prepaid card, your customers are more likely to have a positive experience spending their reward on something special for themselves and have your business to thank for it.
(See a graphic representation of how this psychological process plays out below from Blackhawk Network | Hawk Incentives.)
Go a step further to remind your customers that it was you who made their positive reward spending experience possible by branding your pre-paid cards.
Prepaid rebate cards can be customized to fit your brand with personalized content and messaging. This is a huge opportunity to maximize your promotional investment and increase brand visibility while delivering an awesome reward.
It’s highly likely that the reason you chose to implement a rebate program in the first place was to help your business acquire, develop, convert, and retain customers. And if that’s the case, we’d like to say great work!
When designed and employed properly, an incentive program can help a business drive sales! But did you know, making the decision to offer prepaid rebate cards can give your sales even more of a boost?
It’s true! According to a leader in the incentive industry, 30-60% of prepaid card funds are typically spent with the retailer whose branding appears on the card, due to the simple power of suggestion. (Based on their client’s experience with prepaid rebate cards.
Prepaid Rebate Card Benefits For Your Customers
1. Simple to redeem
In today’s digital age, not many consumers enjoy manually filling out forms, submitting via snail-mail, and then waiting (and waiting) to receive their paper check. Add in the time spent driving to the bank to deposit the check, then waiting for the check to be cleared (assuming your customers have bank accounts and practice traditional banking)–and you can understand why paper checks are no longer the preferred rebate reward type. Paper checks make for a slow, irritating, inconvenient, and in the case of your “underbanked” customers who often experience high costs to cash or deposit checks–costly.
Online redemption with a prepaid rebate card makes the participant’s experience redeeming your rebate an enjoyable experience. For a consumer, this is a big factor. They want to feel rewarded for their purchase and loyalty to your business–not burdened by your process. It’s important to remember that if your customers have a negative experience, they’re likely to associate that negative experience with your brand.
2. Near-instantaneous spending capabilities
The longer a rebate program participant has to wait for a reward, the more likely they are to forget who gave them the reward in the first place.
Plastic prepaid rebate cards tend to be received an average of 10-14 days before checks are mailed by first class USPS mail. The fast delivery and funding capabilities prepaid rebate cards provide, allow your recipients to receive and spend their reward soon after submitting their rebate. The recipient can activate their prepaid rebate card easily and use it right away. No need to wait for a deposit to clear, or anything else that might keep them from spending.
For you, this means you can deliver happiness to your customers, fast. And trust us, that’s something they’ll remember your brand for.
Plus, many prepaid rewards cards are optimized across multiple devices for easy access and instant delivery, even on the go. Look for a blog on the benefits of offering Digital Reward Cards coming soon.
In the United States, check fraud is the second most common type of financial fraud at 35 percent. In fact, according to the Banking Journal, check fraud contributes to an estimated $789 million in losses annually. And check fraud isn’t the only concern you should have about sending a check to a participant through the mail. The check could simply get lost on its journey and result in a disappointed participant.
Prepaid rebate cards are one of the safest ways to handle finances and avoid the security risks related to cash, check, and bank fraud today. If a check is stolen or lost, it can’t be easily replaced because it lacks the security features common with prepaid cards. With many prepaid cards you and your customers have 24/7/365 coverage against loss or theft and can cancel and reissued immediately. At Incentive Insights, the prepaid card issuers we use provide a high level of protection against fraud, theft, and loss.
When you prioritize your customer’s best interest, it will show and they’ll appreciate you for it–with any luck, by remaining your customer.
4. Extended expiration
The average check is only good for 90 days. To a customer, this can feel somewhat restrictive.
Whereas prepaid rebate cards offer standard six, or twelve-month expirations allowing the user plenty of time to redeem.
There are numerous steps that go into planning and executing a successful rebate program–each of which we outline in The Incentive Insights Guide To A Successful Customer Rebate Program.
When you take our approach to planning and executing a successful customer rebate program, your business should see an immediate boost in sales, plus gain market share, customer loyalty, and valuable customer data. So what are you waiting for? Download our guide and get started.
Nathaniel Smathers, a contributor to the Incentive Insights blog, brings a fresh perspective on business strategies and market trends. With a background in marketing and a passion for data-driven insights, Nathaniel offers a unique blend of expertise and creativity. His approach to dissecting complex market dynamics and transforming them into actionable strategies makes him an invaluable asset to our team.