Customer Rebates Management

Question: Discuss the advantages and disadvantages of rebates for the customer and the manufacturer? Answer: Logistics and Supply Chain Management Disadvantages and Advantages of rebates for the manufactures and customers Customer: Advantage: A program of rebate can help in instilling of brand loyalty and creating awareness for a product. When there is a full refund or coupon to make free purchase then the customers think of purchasing a new product (Bragg, 2013). Disadvantage: When the procedure of the rebate is complex then a customer can simply discard the required verification of the purchases and never mail the rebate. Manufacturer: Advantages to Manufacturer: Rebates help in inducing the prospective customers to try the product. Disadvantages to Manufacturer: Manufacturers due to rebate are not able to keep up with the demand. Mail-in rebates a method to divide the customers in categories Mail in rebates is a type of discrimination. The reason for this is that the lower class people are less likely to redeem the rebates than the educated upper middle-class. Working of Mail-In Rebate The first step in rebate is for the manufacturer who issues offer of rebate to those purchasing the product. The purchaser signs and mails it back to the manufacturer with the UPC to the address specified. The purchasers mainly send this form to the clearinghouses hired by the manufacturers. The time taken for processing is four to eight weeks. The clearinghouse then sends the purchaser the check in the name of the manufacturer (Datta Gulati, 2011). Benefit derived from Supply chain from Mail-in rebate A manufacturer will be able gain profit from the supply chain when the customer does not claim the rebate. Need for customers to Mail in Rebate The customers need to mail in the rebate because then only the manufacturers can understand that the product has been purchased. Ethical for the manufacturer to offer Mail in Rebate It is ethical for the manufacturers to offer Mail- in rebate but the manufacturer must also help the customer to avail the rebate. References Bragg, S. (2013).Accounting best practices. Hoboken, N.J.: John Wiley Sons. Datta, S., Gulati, S. (2011).Utility Rebates for ENERGY STAR Appliances: Are They Effective?. ZuÃÅ'ˆrich: Swiss Federal Institute of Technology, CEPE - Centre for Energy Policy and Economics.