Do Rebates Make Retailers Happy?

When they're done right, absolutely.

What retailer can resist a competitive advantage with no added expense? There’s a reason rebates excite retailers as much as they do customers. Essentially, rebates are a free marketing campaign for the store, driving sales without eating into margins.

Rebates’ proven “call to action”—the promise of a cash reward in a finite time frame—draws customers into the store. Increased foot traffic results in increased sales and consumer retention, creating a competitive advantage without making a dent in your retailer’s margin. If a $79 item carries a $40 rebate, the price OTD (“out-the-door”) remains $79 although the customer perceives it as $39—the discount already fixed in her mind.  Top-line revenue increases as the store moves to the forefront of the customer’s awareness, becoming a familiar fixture of one’s shopping routine that entices with the prospect of future savings.

• Rebates can reduce stock of a slow-moving product, freeing up space on retailer shelves.
• Rebates can stimulate a burst of sales while maintaining the retailer’s price point.
• Rebates can be used to introduce a product price correction.
• Rebates can encourage additional purchases across categories. 

Brisk sales, brisk movement

With 20 years’ experience in rebate processing, we know how to drive product sales with mail-in rebates. Our complete rebate processing services can bring consumers back to the retailer, too. Research from the Aberdeen Group finds the top benefit of rebates for both retailers and manufacturers is customer retention (50%), followed by ROI (50%) for retailers, and customer conversion rates (46%) and customer engagement (42%) for manufacturers. 

Post-rebate awards

A key way to cement consumer loyalty is to make post-rebate awards exclusive to the retail outlet, taking such forms as coupons, credits, online codes or gift cards. A consumer survey from last September about preferred forms of reimbursement indicated that shoppers across income levels and industries overwhelmingly preferred prepaid cards over discounts, statement credits and e-cards—citing the “convenience and flexibility” of a physical, plastic prepaid card in their hands. The delight of a merchandise credit works to retailers’ advantage when the gift card reward is linked to the store. Rewarded for their initial purchase, customers will return to the retail store to spend their gift card—and then some.

Bottom line: rebates bring customers into the store to spend money, get acquainted with the layout and inventory, adjust their shopping behavior and become shoppers for the long haul. The retailer doesn’t have to do any extra work beyond welcoming the influx of customers through the door.