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Couponing's dominance as a sales promotion tool is being challenged by refund offers. Rebates stimulate sales without the high cost, waste, and fraud associated with coupons. Refunds are consistently predictable in terms of results and liabilities. Between 1977 and 1984, households using refunds increased from 27% to 51%. Dan Ailloni-Charas of Stratmar Systems attributes this growth to 3 factors: 1. the promotion and popularity of high-ticket rebates, 2. increased desire for shoppers to obtain greater savings than those possible by couponing alone, and 3. the proliferation of consumer swap clubs that foster awareness of promotional offers. Overuse of refunds by manufacturers, however, can be detrimental by eroding positive brand image in categories where there is a strongly perceived product differentiation. Because rebate offers often are made in response to competitive pressures, Ailloni-Charas says they should have a competitively favorable price-value ratio for the product.
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