An analysis of buyer behaviour in response to rebate promotions

[Truncated abstract] Rebate promotions are a significant promotional tool that have received scant research focus. In comparison to coupons, for example, rebates have received minimal academic attention. Unlike other promotion vehicles, rebates are unique in that they offer a postpurchase discount. More importantly though, consumers receive the discount only if they complete the promotion’s requirements. Many in the popular press argue these requirements are made deliberately onerous in order to deter redemption. It is an easy argument to make. After all, rebate promotions have a redemption rate far below 100%. In interviews with fulfilment houses, redemption rates of 5%-15% were widely quoted. Add to this the documented cases of consumer protection agencies prosecuting companies for conditions deemed, “…particularly unusual and onerous…” (ACCC, 2010 pg.1), where consumers have been misled, or where conditions have been concealed (ACCC, 1996), then one begins to understand the press reports. Redemption requirements are the focus in Section 1 of this thesis. Through a audit of 268 recent rebate promotions, 12 commonly used promotion requirements are identified. They are investigated to determine if their usage varies between offers, product groups, and/or rebate types. To assist manufacturers design promotions that provide tangible savings to consumers whilst minimising the opportunity for fraudulent claims, identifying rebate requirements alone is not enough. It is perhaps more important to determine if a promotion’s requirements could in fact foster non-redemption. There is little research examining rebate redemption requirements and it seems no attempt has been made to develop a measure of what constitutes a reasonable and, perhaps more importantly, an unreasonable set of compliance requirements. One contribution of this thesis is the confirmation that some requirements are more likely than others to discourage consumers from redeeming. Using Best-Worst Scaling (Finn and Louviere, 1992) it was possible to rank the 12 commonly used requirements and demonstrate that the most onerous were up to 50 times more likely to deter consumers from redeeming than the least onerous.