Reinventing the rebate: Incentivizing today’s mobile, digitally savvy consumer

(BPT) – The next big thing in the quest for customer loyalty isn’t new, and it isn’t fancy. But it definitely does not come in the mail. The traditional rebate is being replaced by digital or virtual rebates — which are an effective way for companies to attract consumers, enhance the customer experience and build brand loyalty.

A recent Consumer Incentives survey by North Lane found that over 91% of consumers were open to using virtual rebates, and 79% would choose a digital rebate over a traditional mail-in rebate. Virtual rebates were perceived as easier to use, and 41% preferred them because they are greener than mail-in rebates. Approximately 84% of respondents said the option to receive a digital rebate improved their opinion of a brand.

And it’s no wonder consumers prefer the digital option — shoppers aged 18 to 44 said their top frustrations with traditional rebates were the long wait time to receive rebates and the complicated steps to redeem them. In contrast, virtual rebates are faster and simpler.

The evolution of the rebate

Ranging in value from a few dollars to several thousand dollars, rebates have been offered by a wide variety of manufacturers in recent years.

According to, they evolved in some degree from the discount coupon. But instead of offering savings with a reduced price at point-of-sale, rebates require shoppers to complete additional steps to get cash back. These include completing a form, providing proof of purchase such as a receipt, and then mailing these items by an expiration date to receive the rebate check in the mail — eventually.

While rebates entice shoppers to buy a particular product with the hope of getting cash back, many shoppers actually fail to complete the process. As a sales tactic to drive primary purchases, rebates often succeed. The North Lane survey found that 60% of respondents had switched from a favorite brand because a different brand offered a rebate. But in some cases, companies that miscalculate consumer interest or follow-through on rebates can end up losing revenue or miss out on opportunities to cement brand loyalty and drive secondary purchases.

This is especially true if, from the customer’s vantage point, the rebate process does not seem worth the trouble. And after a negative rebate experience, over half (53%) of customers would not or would be unlikely to shop with that brand again. These days, virtual rebates fix most or all of the pain points that prompt consumers to label a rebate experience as negative. So, they’re a win for both brands and their customers.

The digital revolution

In today’s marketplace, expectations for smoother, digitally enabled experiences have grown. Consumers have not only gone digital for tasks like shopping and banking, but they also expect seamless experiences at all brand touchpoints.

Virtual rebates eliminate frictions like delivery issues, long waits for payment and difficulty spending the rebate. Today’s virtual rebates are digital open-loop cards received by email, SMS or in app. They can be spent online, via mobile or in person using the customer’s mobile wallet, offering unparalleled choice.

Much easier to manage than traditional mail-in rebates, digital rebates are viewed more like cash equivalents. Read: higher value. They also drive both primary purchases and spendback. In fact, 90% of the survey respondents said they were likely or somewhat likely to spend their virtual rebate with the same brand they got it from.

A growing opportunity

Delivering a frictionless rebate experience helps boost brand loyalty and advocacy among consumers — both valuable commodities in today’s influencer-driven market.

Despite the report’s findings that consumers are overwhelmingly interested in digital rebates, only 27% reported having received an offer for one. This suggests that many businesses are not yet on the virtual rebate bandwagon. By expanding their rebate offerings to accommodate the preference for virtual, brands could see larger gains from their incentive programs.

Offering digital rebates to consumers also allows businesses to learn more about the customer journey. Using data from virtual rebate redemption, companies can track repeat customers and learn how their rebate programs builds loyalty over time. And according to a recent article in McKinsey Quarterly, businesses wanting to stay competitive need to move as quickly in the digital space as their customers do.

“As the world changes, the way consumers shop and use rebates continues to shift to digital. We know brands are placing priority on providing customers with simple, engaging digital experiences,” said Seth Brennan, CEO of North Lane. “Virtual rebates are highly effective at providing an enhanced customer experience and incentive, driving purchases, increased engagement, and ultimately, brand loyalty.”

To learn more about digital incentives and other options for your business, visit