Why use a coupon over a rebate, or vice versa? What’s the difference between the offers, and what’s the advantage?
A coupon is printed and freely distributed in advance of a purchase, with the hope that it will motivate a potential buyer to purchase a specific product or service. The coupon can offer a discount at the time of purchase, a free gift, an upgrade, or some other type of bonus. It can also be given after a purchase to be used on a subsequent purchase within a given timeframe. Coupons also remind people of your business and can be used as a form of advertising or direct mail or as a print-out from your website.
Some industries, such as fast-food establishments and restaurants, are great candidates for coupons and use them often. Not many people will buy a pizza without a coupon—they’re available everywhere. But coupons need to have a reasonable perceived value for the buyer to use them. If the coupon value is not enough to make it worthwhile to purchase a certain item within a time limit, customers won’t use it. And if the customer doesn’t like the product or has no use for it, he or she probably will discard the coupons immediately. You should direct-mail coupons to people who need
or want your products and can afford to buy them.
A rebate is an after-the-sale refund of money that has already been paid. It’s generally given by the product manufacturer or the home office of the seller’s business. Rebates are usually offered on larger purchases or products where continuing service fees are charged, such as a cell phone or smartphone purchases.
To qualify for the rebate, customers usually have to fill out a card asking for personal information about themselves, their buying habits, and their household or business. The manufacturer or home office doesn’t really need this information to send the rebate—they want it so they can decide what else to try to sell you. Based on the customer’s answers, his or her name and address will be assigned to one of the business’s mailing lists for future use. The customer will start receiving mail or calls about extended warranties, add-ons, or other products that should relate to their income level and lifestyle. They also may end up on mailing lists that are sold to other companies.
Many people will buy a product because of the rebate but never send the rebate in, which is essentially more money in your pocket. A rebate doesn’t work for every type of product or service, but if it can work for you, consider it. Ask the manufacturers of your popular products whether they offer rebates or plan to in the future. You can win in two ways—you get the sale and the mailing list for future purchases.