What Is Rebate?

What Is Rebate?

There are lots of marketing strategies used by companies to attract customers and in the process build their customer base, one such strategy is the rebate strategy. 

Businesses and companies all over the globe are starting to embrace the idea of rebate in their marketing strategies. Rebate is simply giving back a percentage of the money used to pay for a goods or services back to the customer. Marketers use them as incentives or bait to get customers to buy more than they would have bought or more than they borrowed. Rebates are most times offered to the customers by the retailers or the project manufacturer. 

Sometimes companies that manufacture different types of products give rebate when a customer buys products that complement each other e.g. shaving stick and shaving cream from the same manufacturing company while some retail stores offer rebates to customers who visit their stores regularly. Rebates not only favor the customers but also help build a foundation of loyalty, trust and a good customer-manufacturer relationship. Various industries ranging from building suppliers, electronics, retail and wholesale shops are in the habit of offering rebate on products and services. 

Before rebates can be given specific sets of agreement and criteria has to be met. Many times people see rebate and discount as the same thing, however they are too different things.

What is the difference between Discount and Rebate? 

Discounts and rebates are different strategies from each other. 
However, lots of people mistake one for the other. 

Discounts are offered to the customers before payment is made, instead of paying the full price, a certain percentage is deducted from the specified amount of the goods or service. Rebate on the other hand is refunding back a percentage of an original payment made on a product or service after a specified time. Meaning payments have to be made before a percentage of the amount paid is given back to the customer. While discounts can be offered on the spot, rebates take a more technical approach and it's not a decision that can be taken on the spot. Discounts on one hand are only profitable if done on a short term basis, while rebates offer a long term relationship because it requires commitment, loyalty since its payment is done later. 

Rebates offer various to specific people depending on the services rendered or product bought while discounts are available to everyone, it can be seen on the goods available for sale before purchase. Discounts are a means to offer a positive customer- manufacturer relationship and it is used to calculate the commitment between the buyer and the seller. It is a useful tool for more sales, it also encourages customers to pay in full immediately instead of paying in installments.

What makes Rebate a good strategy?

The effect of rebate in business cannot be overemphasized. It can move a struggling business from being shaky to one with a firm financial background. It reduces cost and also boosts their productivity level since it is a means of building product awareness with customers. Businesses that make use of the rebate marketing strategy have reduced inventory stress and also interest from retailers who bring in more customers to the manufacturers.

Companies that make use of the rebate marketing strategy.

There are several companies that make use of this kind of strategy to make sure that they keep their customer base happy and guarantee it is always growing. The notable ones include;


In conclusion, using rebate or cash back strategy is one that is not really spoken much of but is one of the best strategies as it is one that would definitely interest customers and prompt them to make large sales when they calculate how much they would be getting back after each purchase.

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