In Company News, Consumer Rebate Programs

No matter how big or small your company is, everyone in a managerial role knows one thing: it could always be more successful! The real key to major success is customer satisfaction. Many companies have benefited from instituting rebate programs to increase satisfaction. Such programs offer many advantages and challenges when implementing your own. Curious to learn more? Keep reading to discover the pros and cons of rebates!

What Are Rebates?

We’ve put together a solid guide to the pros and cons of rebates. First, though, we need to establish something fundamental: just what is a rebate program, anyway?

A consumer rebate program is any kind of opportunity your company provides customers for them to get a portion of their money back if they perform a specific task. Because of this exchange, such programs are sometimes called “refund programs.”

There are many different forms of rebate programs, of course. One popular form of a rebate is a mail-in rebate, where a customer can get X dollars back from their purchase in the form of a prepaid card or a check if they submit the materials required by the offer.

The extra level of effort the customer must expend is what keeps this program successful among companies. And the ones who opt into the campaign are your most committed customers—making them ripe for additional sales opportunities once you identify who they are and market to them accordingly.

Benefits of Rebates

Sales Growth

Number one in the “pros” column is sales growth. This is the whole goal of any good rebate program: items that may not have naturally moved from the sales floor will move much more quickly when customers see an opportunity to save money.

This is psychologically appealing to customers on a few different levels. For instance, it comes across as a really nice and fun surprise when they discover the item they wanted in the first place will actually reward them with money for buying it. It can also persuade customers who are wishy-washy about making a purchase to take the final step and buy products that the company is not going to sell.

Contrary to popular belief, any extra steps (such as mailing a proof of purchase) do not discourage a buyer’s fulfillment. Instead, such customers feel like a special, select few who were wise enough to take advantage of the rebate offer while other people overlooked it. It is important to note that those do fail to fulfill the rebate are still buying, intending to complete the rebate process, therefore, there is much opportunity for sales growth without sacrificing discounts.

Building Consumer Base

Rebate programs are a great way to boost sales and build your brand. Why? It all comes back to the idea of building your base of customers up.

Not everyone will take advantage of the rebates you offer. But those who do will be happy enough to basically become your brand ambassadors. That means they provide excellent word-of-mouth about your product and service to anyone who listens.

Of course, your company is getting quite the “deal.” You offer customers a simple rebate and get better brand ambassadors than any big salary could pay for!

Cons of Rebates


We’re committed to examining the pros and cons of rebates. Sadly, poorly executed rebates can lead to what we consider to be “cons”. The first “con” of such programs? The answer would have to be their potential for complexity.

It can be difficult to design a rebate program that has extra steps to get money back and simultaneously ensure that customers take advantage of it. For instance, you may require them to simply mail in a proof of purchase. But some customers will lose their proof or simply lose their motivation to mail something in—especially Millennials who aren’t huge on physical media of any stripe.

This can cause issues down the entire line, of course. If not enough customers are taking advantage of your rebate program, then they will not be “wowed” and “wooed” by your efforts. This means you won’t be able to effectively build a base of customers or experience the sales growth you were looking for.

While you may face difficulties with implementing rebates, this should not be a deterrent to integrating them in your marketing plans. Third-party companies such as Incentive Insights can help you set up and manage your rebate programs, so you don’t have to deal with the hassle. With their experience, you can have any of your rebate designs coded by sophisticated developers that ensure that the rebates are “just right” and that customers have an awesome experience with them.

And it’s all full circle. As we said earlier, your success is based on customer satisfaction. It’s a bit like what your mother may have told you growing up: when she is happy, everyone else is happy, too!

Limited Bandwidth for Internal Implementation

Let’s say that your customers are ready and willing to embrace your rebate programs. We have a big and important question: are your employees ready to do it?

Unless you hire a third party like Incentive Insights, you will set up and manage the rebate processing of the rebate programs in-house. That means that you must make a pretty difficult decision: figuring out how many employees need to be assigned to this program.

This is a classic “Goldilocks dilemma” for management, of course. With too few people working on the program, it will be too “cold,” and the program will suffer. With too many people on it, you face significant labor cost overruns and lost productivity because those employees are no longer contributing as much to their original responsibilities.

Ultimately, it’s all about finding what is “just right.”

Assessing the Pros and Cons of Rebates

We’ve explored some of the pros and cons of rebates. That leaves just one question to ask yourself: are rebates right for you and your company?

In the right hands, these programs can be a real game-changer for your company. Our advice? Do it, but do your homework and take the time to get it right! Incentive Insights takes time to understand your brand and customize your incentive programs to meet your business goals.

With our assistance, you will gain many benefits, such as flexibility over a cost-effective sales incentive program planning and implementation and extensive data analysis and reporting. If you are ready to take advantage of our services, give Incentive Insights a call to answer all your questions and establish the right program for your business.

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