In Incentive Program Planning

One of the most critical parts of planning an incentive rebate program revolves around figuring out what types of incentive payment methods you should and can offer.

But making this decision doesn’t just come down to convenience or preference regarding your business processes. Depending on what industry you’re operating in, you could be facing certain restrictions.

To help you better understand how you can structure your rebate strategy, we’ve put together a guide based on our extensive experience supporting rebate sponsors in many different industries and business models.

Customer Satisfaction Through Flexible Payments

When it comes to structuring incentive rebate types, you want to take the approach of providing as much flexibility and convenience as possible for your incentive compensation. And while there can be restrictions in certain industries (more on those below), there are three main examples of incentive pay for rebate rewards.

  • Checks
  • Physical Prepaid Rebate Cards
  • Digital Prepaid Rebate Cards


When it comes to banking and financial transactions in general, checks still remain a very common and reliable option. This is the case for vendor and supplier rebates as well as end-user rebates.

Traditionally, incentive rebate offers have also involved an automated check issuing process, where the last step after verifying a rebate application is eligible involves printing and sending out a check.

The advantage of this payment option is that with the right fraud protection, it’s still a practical way to issue incentive pay-outs. However, the software and systems required to integrate a printing system with your banking service are not cheap and require some expertise to manage properly.

This is an area that our team at Incentive Insights has supported for many years, and we can advise you on the best ways to use check payments for customer and supplier rebates.

Physical Prepaid Rebate Cards

A lot of rebate sponsors have moved away from the traditional approach of sending out checks in favor of structuring their incentive payments around prepaid debit cards. These are available from most of the credit and debit card service providers and have a few distinct advantages.

It’s a lot more cost-effective and convenient to send out such prepaid cards, and it allows the recipient to use the funds almost immediately. With checks, there can be delays in banks processing the payments until the funds are available to use in the recipient’s account.

And with both stores and online retailers accepting debit cards for all transactions, there is no limitation on how and where to use them.

Digital Prepaid Rebate Cards

Similar to physical debit cards, rebate sponsors can issue a virtual or digital prepaid rebate card. These can be even more convenient, especially for small amounts associated with rebate programs.

The main advantage of this virtual incentive reward payment is that they can be sent out electronically. That further reduces the need for physically posting a card and reduces delays in recipients of the end user or vendor rebates having access to the funds.

Both types of rebate cards can also be a great way to help you target the underbanked population.

More on this shortly.

Flexible Types of Incentive Payment Choices

A question we hear a lot: What are 2 types of incentive pay?

Here at Incentive Insights, we have also managed payments for rebate sponsors that offered customers a choice of check or prepaid card payments. Having that flexibility can allow you to satisfy more customer needs and get better results from your marketing efforts. However, you will have to ensure that your industry allows different types of incentive pay by consulting with your in-house or outside legal team.

Industry And Regulatory Restrictions on Types of Incentive Payment

Before you decide on your preferred incentive payment method, you also have to consider regulatory restrictions for certain industries. It’s not always possible to offer rebate debit cards, and it’s important to know that before you put your marketing information together.

To learn more about the top challenges restricted consumer manufacturers face with their rebate programs, check out our blog. Here are the more restrive industries:

  • Medical Equipment
  • Alcoholic Beverages
  • Pesticides and Herbicides
  • Food and Dietary Supplements

Medical Equipment

In the medical equipment space, incentive payments can only be offered in the form of checks. While it might seem more practical to manage these types of payments for volume rebates through prepaid cards, it’s important not to run into regulatory issues.

Also, keep in mind that medical rebate offers are often based on products with a high purchase price, meaning that checks can be the more practical way to issue larger payments.

Alcoholic Beverages

When it comes to consumer and supply chain incentive programs in the alcoholic beverages space, choosing the right type of payment method becomes more complicated.

Not only do marketing regulations by the federal government apply, but many state laws apply restrictions for rebate marketing. These don’t just cover the way you advertise and offer your rebate marketing program but also the way that payments are made.

In many states, this can be restricted to only checks. And you will need to get legal advice if you’re planning a rebate program in this industry.

Pesticides And Herbicides

While there are strict regulations around pesticide products and how you can market them, there is more flexibility here than in other industries. Whether you choose check or prepaid cards will depend on two things.

When dealing with retailers and businesses in the supply chain, you will need to clarify and confirm the preferred payment method with individual companies.
And when it comes to choosing payments for end users, the decision will depend on the target audience.

More on this in the next section.

Food And Dietary Supplements

In the food and dietary supplement space, rebate sponsors can choose between issuing checks or prepaid debit cards. Which option they choose will largely depend on the target audience for consumers or the preferred payment type of companies.

It’s a good idea to reach out to target retailers and ask them if they would be in favor of the more convenient method of physical or digital prepaid cards before you launch the rebate program. That way, you can come up with a uniform rebate agreement that you will propose to all vendors, making these marketing efforts easier to manage. For more about how you, a manufacturer or reseller of restricted consumer goods, can get the most out of your consumer rebate program, check out all of our solutions:

Rebate Program Target Audiences

There are two types of target audiences for all rebate sponsors, and it’s important to understand what kind of rebate payment methods would suit them.

  • Business to Business
  • Business to Consumer

Business to Business Types of Incentives

Many rebate sponsors set up marketing programs where they reward retailers with incentives. These encourage retailers to recommend your products to customers and place them in a more prominent store location.

You can incentivize retailers by specifying certain purchase requirements for a set number of products in a specific timeframe, which will then qualify them for a rebate amount.

And many vendors are open to receiving those rebate payments either as checks or physical and digital prepaid cards. You can make this a flexible option for vendors to choose from or encourage them to use more convenient and easier-to-manage prepaid card payments.

This will depend on internal business policies for each rebate sponsor. Some businesses restrict all incoming payments to checks, or they may have restrictions that state payments over a certain dollar amount have to be in the form of checks.

Business to consumer Types of Incentives

While checks have been the most common way to offer an individual and product mix incentive rebate directly to end users, there are some benefits to using prepaid physical and virtual debit cards.

According to the FDIC, almost 5% of households in America are unbanked, with many more having only basic checking accounts but no access to credit or debit cards. That’s a large portion of the population that probably won’t respond to rebate offers based on issuing checks.

And you also have to account for the age profile of your target audience. According to the Atlanta FED, 25% of people over 65 prefer making check payments. But that number goes down to 15% for the 45–64 age group and even further down to 7% for 18–44 year-olds.

Who typically ages Uses Checks by age in rank order:

  • 65+
  • 45–64
  • 18–44

So, if your target audience is under 45, you’ll likely achieve better results from offering customer rebates in the form of prepaid cards than checks.

Let Us Help You Manage More Efficient Incentive Rebate Payments

If you’d like to find out more about streamlining your rebate marketing by outsourcing the data collection and payments, then talk to our team at Incentive Insights today.

We have developed unique processes for using rebate management most effectively to ensure that you gain access to insightful customer data while at the same time improving customer satisfaction with fast payment options.

We have flexible solutions to suit your budget, allowing you to maximize sales and brand recognition through your marketing efforts.

Recent Posts
Submission Processing