Rewarding Loyalty With Rebate Incentives

BY Lucy Fang
Jul 12, 2016
coupons coupons, delayed incentives, incentive schemes, Loyalty, marketing strategy, next-purchase, Rebate


Couponing has become a fine art, just look at all the blogs dedicated to clipping and saving. There’s Groupon, Not Your Grandma’s Coupon, and the Krazy Coupon Lady all vying to be the one to satiate our society’s enormous desire to save. These types of rewards are meant for those who go out and hunt for the savings, part of a $3 billion consumer savings on goods and services. However, in the last few years a new player has been added to the game: the “rebate” coupon (commonly referred to as next time or checkout coupon). This incentive rebate reward is given at checkout and is meant for the next time one shops or to be used within a certain time period at a later date.

This delayed gratification rebate coupon has many advantages but to each, there are some drawbacks. For instance, are your clients going to feel their current purchase was worth it with the rebate coupon or will they feel they were shorted and would have wanted the monetary value attached to what they bought today instead of tomorrow?

Rebate coupons are usually generated electronically, sometimes they are expected and sometimes they come off as a complete surprise for your end-user. Either way, the savings are targeted towards a service, brand, or specific category, aimed where you want the customer to go, and are usually a higher value than what a traditional coupon would be. The goal could be to get your customer back and quicken the purchase cycle, increase retention, or funnel your consumers to a particular channel. Your accrued benefits with delayed incentives could also be to consolidate purchases or to switch brands.

Any of the above-mentioned outcomes can be facilitated with rebate coupons but there is a twist that needs to be taken into consideration. Whereas many would feel they have received a surprise there is research showing that “consumers differ in their perception of a rebate coupon either as a delayed reward or an immediate loss. *” To alleviate this perceived unfairness, the coupon should be given a use date of at least a week or month later. This takes away the feeling that they just missed the deal if the coupon was good for just the next day.

Findings from the research show that the design and timing of the rebate coupons increase purchase in the short-term but in the long-term can be perceived as unfair. Therefore, it is quite important to create your program with consideration and with specifics in mind and using various channels at the same time. Call now and let All Digital Rewards can help you guide and target consumers with the most effective rebate coupon option and come up with the optimal plan for you.

*Patrali Chatterjee, (2007) “Advertised versus unexpected next purchase coupons: consumer satisfaction, perceptions of value, and fairness”, Journal of Product & Brand Management, Vol. 16 Iss: 1, pp.59 – 69