Rebates And Using Plastic

 
 
By Evan Schuman  |  Posted 2004-11-13 Print this article Print
 
 
 
 
 
 
 


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Two Super-Mini E-Commerce Columns. Think Of These As
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Rebates And Other Retail Oxymorons When Staples announced that it was Web-automating its rebate process, it started monkeying with one of those great oxymoronish retail traditions, like a grocery chain rewarding its worst customers with the express lane. ("You want to buy a whole shopping cart worth of items? Sorry, maam, you cant use the fast lane. Go over and wait with the others." Turns to someone else: "Youre just buying a box of toothpicks? Right this way, sir. Only the fastest for you!") The time-honored rebate has always been based on the belief that most people wont bother filling in the forms and applying for the money. Of course, it depends on how large the rebate is, but the more onerous the process, the more the retailer can win brownie points for making the offer without having to actually pay anything.
To read more about how Staples is automating its rebate process, click here. A company called Parago has sold to Staples and other retailers a package to significantly accelerate the rebate process, making it a lot easier on consumers. Will this make a lot more consumers take advantage of rebates? Parago CEO Ken Johnsen says that he doesnt think so. "There may be incremental sales on this, but Im not so sure well be seeing an increase in the redemption rate," he said. What then does he see as the most powerful upside? More sales of the items themselves and related items, as the easier system can tout lots of related products. And if retailers start using their services to turn a $50 rebate check into a $75 store credit, the increase in secondary sales could be huge. See what can happen when you treat your customers as allies and not enemies to be duped? Maybe we can teach that to the airlines and get them to stop rewarding their best customers with free tickets. And then permit only one seat to be available on any desirable flight. "Well, sir, I can book you on the redeye to Nome, if youd like. Thats better than boring old Hawaii, isnt it?"

In God We Trust. All Others Must Use Plastic Visa was recently touting an analysis of its customers and found that the transactions using cash and/or checks were sharply dropping. When we called asking for the specific numbers, Visa couldnt place its hands on any of them. Not that we dont trust Visa to have honestly come upon its self-serving conclusion. ("Visa: Its Everywhere We Tell You To Be") But this claim does raise some interesting retail technology implications. Merchants have historically preferred cash. Besides honesty, it more often revolved around those kickback fees to the card companies. Even with todays razor thin margins, the cash-to-credit, trust-versus-track fight is shifting to the track side. (Ill refrain from saying that dollars bills are from the wrong side of the track. Its too easy.) The potential increased revenue from being able to track every sale and tie it back to individual customers is too exciting a CRM prospect to turn down. As weve discussed before, the relatively small number of retailers that are actually using CRM—as opposed to the simpler basket analysis—is disheartening.But as margins get even thinner, the need to boost overall revenue becomes essential. Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at Evan_Schuman@ziffdavis.com. To read earlier retail technology opinion columns from Evan Schuman, please click here. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.


 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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