Revisiting Rebates


Juli Spottiswood, president and CEO, Parago Inc., Lewisville, Texas,

A decade ago, rebates fell out of favor with marketers and retailers as consumers tired of the cumbersome and difficult submission and redemption processes involved. However, more recent advances and innovations have prompted a resurgence of rebates. Senior editor Katherine Field talked with Juli Spottiswood, president and CEO of rebate fulfillment and prepaid card provider Parago Inc., about the advantages of rebates in a retail-marketing program.

Are rebates experiencing a resurgence among retail marketers? 

We have definitely seen resurgence in the demand for rebates for two key reasons. First, retailers are looking for ways to appeal to the value-seeking consumer in this economy. They are looking for marketing tactics outside of the typical clearance, coupon and “everyday low pricing” options. Rebates allow retailers to learn about their customers, temporarily drop their net prices, and access additional branding and marketing opportunities through the numerous touch points that occur throughout the rebate submission and redemption process.

Additionally, and most importantly, consumers are seeking rebates. Research we conducted late last year showed that 83% of consumers are actively seeking products with rebates, and more than 93% of consumers will go five to 10 minutes out of their way for a $15 rebate.

What specific marketing advantages do rebates offer? 

Marketers understand that the purpose of a rebate is not just advertising a lower net price, but it’s also the ability to form a long-term profitable relationship with their customers. Today’s best-in-class rebate programs are designed to be easy for the consumers, while still providing the financial benefits to the sponsor. Additionally, they offer retailers multiple touch points with their customers, the recycling of rebate dollars back to their store (when prepaid or gift cards are selected as the payment vehicle) and the ability to capture data to determine consumer preferences for future promotions.

Our ClickChoice program has advanced the rebate industry even further, as customers can select the rebate payout that best suits their needs, which can include the traditional paper check, a prepaid card, the retailer’s own gift card or even payout via PayPal. Features like these have dramatically impacted consumers’ impressions of modern rebate programs.

How can rebates work to rev up today’s retail marketing programs? 

Rebates provide deep discounts that would not be otherwise achievable. As such, they drive tremendous sales, foot traffic and urgency. Consumers are looking for these great deals and seek them out. From a marketer’s perspective, rebates can be a gold mine because they generate customer demographic information and the opportunity for additional opt-in touch points via e-mail, text message and online.

Another huge boon of rebates is the reward vehicle itself. Rebate cards are hugely popular with consumers, and marketers are reaping the benefits. On average we see 25% to 50% of rebate dollars spent back at the retailer.

What kinds of technology exist today to better process rebates and make the rewards more accessible to consumers? 

The rebate process itself has become simple and seamless for the consumer—from a fully paperless process requiring no mailing of forms, to quick turn times and even the choice of rewards.

Overall, we have introduced tremendous advances in automation and systemic processing. We have fully digitized processes that were once completely manual. This makes rebates more efficient and cost-effective, dramatically increasing turn times and accuracy and reducing fraud.

The technology around the consumer’s rebate experience and ongoing communication are what are most exciting for us. At Parago, for example, we offer clients Rebates 360—an all-in-one rebate platform that takes away the pain points felt by the consumer in the past and promotes a more brand-positive experience for clients.

With Rebates 360, our retail clients can offer their customers the best possible experience with their rebates, with features including prepaid card or gift card payout, PayPal payout, paperless submission, e-mail and fax submission, an online rebate center, customer service Web chat, faster turn times that result in payouts in as little as two weeks, choice in rewards and greatly enhanced communication.

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