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Some Rebates May Have Hidden Motive

October 24, 1985|DON G. CAMPBELL | Times Staff Writer

Question: There's something about marketing strategies that baffles me and that I hope you can clear up. It seems that there's a tidal wave now of more and more products showing up on store shelves with coupons attached offering attractive rebates. But they practically all require that you soak a label off, cut out a part of the box or can, tear off a lid or something like that, and send that back with the coupon in order to get your money. Some of the labels are almost impossible to get off, and cutting some of the cardboard boxes requires a blowtorch.

And then, of course, there's some company with an obscure name, somewhere, which either sends you the check for the rebate or rejects it because you've already received one rebate (one to a customer). All of this must require a horrendous computer capability as well as a lot of check-writing and postage. Why don't they just attach a plain old coupon to the box or can that you can turn in to the retailer for a rebate or discount--wouldn't that be a lot easier and accomplish the same thing without all of this cutting, soaking, tearing nonsense?--L.D.

Answer: Old advertising maxim: "There's no such thing as a dumb promotion if it works."

There are undoubtedly impressive market studies available from firms specializing in premiums, coupons, rebates, giveaways and what have you that would support the validity of the soak-off, pry-off, cut-off approach to establishing what is called "proof of purchase."

But Michael Ridel, a group creative director for Dailey & Associates here (the West Coast's third largest advertising agency; it has a high involvement in consumer products), frankly admits that "what you hear (from him)--because we do very little of this kind of promotion--is largely educated guesswork, nothing definitive."

It's almost axiomatic, though, Ridel continues, that the less effort there is involved in getting a rebate, the more requests for rebates will be submitted. And this, he also concedes, is not what routinely qualifies as "A Great Truth."

It's also quite true that the average consumer seeing an attractive rebate offer on a store shelf doesn't, at the moment, pay a whole lot of attention to what might be involved in the soaking/cutting/prying procedure to establish proof of purchase.

We recently sought to capitalize, for instance, on an attractive rebate offered by Smirnoff vodka--$2 off the normal price of a 1.75-liter bottle (which was already selling at discount from the list price). All that was required was the filled-out coupon attached to the bottle, the cash register receipt and the neckband from the bottle.

Therein was discovered a principle that had escaped us in high school physics class--that it is virtually impossible to "soak" anything from the neck of an empty 1.75-liter bottle. It was like trying to submerge an unbroken light bulb--as soon as the empty bottle was immersed in the basin, water would settle to the bottom of the bottle and the neck and cap would pop above the surface.

After several hours of this futility, the label was finally pried off with the help of a fine surgical tool found in a kitchen drawer, but in the form of two dozen flecks of soggy and anonymous paper that could have been anything from (indeed) a vodka label to a one-inch strip of paper torn from a Canadian passport. Reconstructed as logically as possible and glued to a piece of paper--along with the required coupon and register receipt--this exercise, plus the postage, put the value of our time at roughly 48 cents an hour.

"The key feature in this sort of thing," Ridel says, "is that if you can offer a large, attractive, rebate that catches the consumer's eye, but, at the same time, doesn't give you the worry of having to make too many rebates, you've accomplished your goal."

One of the inescapable facts of life in retailing is that you've got many, many similar products crowding each other on the shelves, which, alas, are so similar that there's not a nickel's worth of difference between them.

"In advertising," Ridel adds, "you look for things to talk about that make your product different from the others--and a lucrative rebate offer is one of them. So, if it works, you've got increased sales without all that much cost in rebates. And, who knows? Maybe they'll like it better than the one they normally buy."

But, if getting the rebate is too easy, all you've done is increase sales and offset much of it with the additional costs of making high rebates.

Q: In reference to Individual Retirement Accounts, I will be 70 1/2 this fall. I understand that I may defer the first pay-out until March 16, 1986.

Must my next pay-out occur in 1986 too? Or can it be set up to occur 12 months after the first one?--G.B.A.

A: Actually, according to Robert Giannangeli, a spokesman for the Internal Revenue Service, if you're turning 70 1/2 this fall, you've got until next April 1 to take you first pay-out.

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