The Balancing Act of Rebate Management
 

As the average dollar amount of promotional rebates continues to rise, it is becoming increasingly important for manufacturers to pay particular attention to the procedures they employ to validate (or invalidate) their consumers’ mail-in rebate requests. Several years ago, a packaged goods manufacturer was curious about the financial implications of employing rather lax “checking” procedures in order to avoid consumer complaints. In this particular case, a few too many complaints of non-receipt had been received by the executive management team, and the promotion department had concluded that the best way to stop the complaints was to (essentially) pay every claimant. Unfortunately, it didn’t take consumers long to figure out that they could take advantage of this rebate sponsor; before long, word got around through some of the then “rebate publications” that they would pay almost anyone. Nonetheless, a formal study was commissioned by an outside expert in rebate and fulfillment management. The conclusion of that study was that there would be a dramatic improvement in ROI if the company reversed its long-standing policy and began to implement significantly tighter “checking” or validation procedures. Hence a plan was implemented to begin a closer examination of every rebate request for the following:

Check Electronification:  Keys to New Efficiencies Check 21 - On a Slow, but Steady, Path                       Fall 2004 Back Office to the Future: Check 21 and Back Office Conversion Summer 2004 Taking the Admin Out of Your Returns: Introducing MICRefine™ Spring 2004 Reconciling ARC with Check 21 Fall 2003 Check 21 Becomes Law, Invites Big Questions

External The outside of each rebate submission was checked for the following: Same/Similar Handwriting Type of postage stamp (or meter impression) Stamp placement Return address Return address label Postmark Type, style, and shape of envelope Internal Next, the contents of envelope containing the rebate submission were examined for:  Presence of a proof-of-purchase Presence of a receipt Valid purchase date range Valid price paid range UPC symbol in valid range Original mail-in certificate Computer Check Finally, before check generation, Computer Operations employed the following:  An address correction editing routine (sometimes called scrubbing) Duplicate elimination routine, per the stated parameters In today’s environment of prolific retail, wireless, and technology rebates, it would also be critical to transmit purchase information from retail point-of-sale to the fulfillment platform for added security – with a built-in delay to check for claims for rebates on products subsequently returned for credit. After the procedures were implemented for the scenario described above, there was a 50% reduction in fraudulent attempts to claim rebates. The bottom line is that word gets around if you are being lax in your procedures, and before you know it you are paying out too many invalid claims – ultimately costing you a fortune. Do not reduce validation procedures to solve a complainant problem; perform a root cause analysis and employ a considerably less costly solution. Everyone realizes that customer satisfaction is a critical component to brand loyalty, however understanding why your consumers are dissatisfied is more important than paying consumers who have not complied with the requirements of your offers.   Hal Stinchfield, President and Founder of Promotion Management Group has been providing rebate management, sales promotion, and fulfillment consultation for over 25 years. He can be reached at (952) 404-1915, or hal_stinchfield@att.net.

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