In Incentive Program Planning, Rebate Fulfillment

How to Ensure Your Rebate Program Stays Compliant

Customer rebates are one of the most effective ways to increase sales and drive awareness of your product or service. As a manufacturer, a rebate allows you to reach customers who might be particularly price sensitive, while not taking overall margins.

However, before your business takes on a promotional strategy like a rebate program, it’s important that you understand the rules and regulations of rebate compliance.

Rebate compliance is not an easy thing to stay on top of

Understanding rebate compliance is much easier said than done. You see, many laws surrounding rebate compliance have changed in recent years and it’s resulted in businesses creating offers on outdated guidelines. While these rebates were once acceptable they are now illegal. Even more, each state has the authority to create its own legislation surrounding rebate offers. Therefore, what is legal in one state may not comply in another.

Take this requirement, for example, some states forbid you from including an item’s post-sale price, unless you reveal the pre-sale price too. While other states take it further by prohibiting you to mention the post-sale price at all. You can mention the pre-sale price and the discount, but must put the rest of the “work” on the customer.

How a rebate is fulfilled is also regulated. The federally-mandated Mail Order Rule requires you to mail rebates within the timeframe that you promised on your initial offer. If you did not give a timeframe, you have 30 days to fulfill the order from the time it is received. If you are unable to meet your deadline, you are then required to notify each participating customer of your reason for the delay as well as when they can receive their rebate. Talk about bad PR for your company!

But ignorance when it comes to rebate compliance could cost your company big time

When it comes to rebate compliance, federal and state regulators are stepping up their efforts. They are actively cracking down on manufacturers who offer rebate programs that are not compliant. Their ability to charge, prosecute, and fine you for failing to adhere to the rules and regulations surrounding rebate programs is NOT something to underestimate.

While it’s true that some companies intentionally disobey rebate compliance, many companies simply don’t know any better. Luckily, there is a smart and effective way to ensure your company never crosses over rebate compliance lines.

The solution? Outsource to a rebate fulfillment company who knows rebate rules and regulations

A reputable rebate processing and fulfillment company works with rebate compliance every day. It is quite literally their job to stay up to date on the rules and regulations of rebate programs. When you partner with the right rebate company, you can ensure your rebate program operates according to the rules of your specific industry and state. Plus, if internally, your team lacks experience with rebates–outsourcing to a team that has experience will allow your company to maintain efficiency and avoid possible compliance mistakes.

When choosing a rebate provider who can help you execute a compliant rebate program, ask these questions:

Does the company have a strong and extensive record of providing rebate program consulting, processing, and fulfillment?

When it comes to finding the best rebate companies, experience speaks volumes. Take it from us at Incentive Insights, we have 20+ years of it!

Does the company offer  “one-size-fits-all” or flexible incentive options?

A company that only offers one or two types of incentives, while compliant, will not give you the freedom to create a rebate program specific to your needs. Look for a company who offers flexible submission and reward options. We are firm believers in offering flexible incentive solutions.

Is the company committed to fast turn times and accurate processing?

As we said, rebate compliance goes as far as to say how quickly you need to process and fulfill your rebates. Find a company that ensures quick and accurate rebate processing. Our rebate processing capabilities are nothing short of accurate and efficient every time.

Does the company promise total transparency?

Look for a company that can provide you with transparent and real-time reporting, plus proactive account management.

Does the company have processes and procedures in place to identify and handle fraudulent claims?

While rebates can help you gain revenue, they can easily become non-profitable promotions when they’re mismanaged. You’ll want to find a company who can help you avoid rewarding unqualified rebates. See the other ways you can prevent rebate fraud.

Rebate compliance is not something to take lightly, but it’s also no reason to avoid rebates altogether. There is plenty of good that can come from offering your customers a rebate. As long as you, or your rebate processing company understand how to keep things legal, your company will see nothing but success.

We offer a guide for manufacturers like yourself to create a successful, fraud-resistant, compliant customer rebate program. Throughout the guide, we discuss the benefits of a well-built, well-executed rebate program, as well as the potential pitfalls you may come across–one of which being the rules and regulations surrounding rebates–and how you can avoid them. Download the guide here.

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