Rebates

Rebates
Name
Institutional Affiliation

Rebates
Organizations that seek alternative marketing methods of their products utilize rebates. They provide highly attractive mechanisms to woo the clients. A significant advantage of rebates is that the partial reimbursement that the client receives is tax-free. It is more of a reduction of the price paid for a product. For instance, purchasing from HP will enable the customer to claim a refund from the company. For the manufacturer, the rebate is an ideal method for inducing the customer to try a company’s products. Through rebates, companies can increase their sales and visibility. Notably, Chen, Li, Rhee, and Simchi‐Levi (2007), also mentions that it provides a platform for the reduction of excess inventory. Thus, a firm is likely to leverage it with retailers and foster brand loyalty in the long run.
However, maintaining rebates for organizations is not as easy. Firstly, companies experience challenges of honoring the rebates especially when the demand is too high. Another challenge is that the concept of rebates does not necessarily entice all consumers. Thus, it is not a guarantee that it would be a pathway to encourage loyalty (Chen, Li, Rhee, & Simchi‐Levi, 2007). For the consumer, total dependence on rebates leads to negative shopping experiences. It may take some time or delays may occur in the course of processing the rebate.
Mail-in rebates provide a viable method for enabling the manufacturers to reach price-sensitive shoppers.

For example, in a company such as Best Buy, it is an ideal way of dividing customers according to their spending ability. The mail-in rebate works when an individual pays an items price in full at the time of purchase (Chen, Li, Rhee, & Simchi‐Levi, 2007). The client is then given a claim form to fill, and then it is sent to the manufacturer. Supply chains benefit from mail-in rebates in that they can plan and schedule for the required products efficiently (Chen, Li, Rhee, & Simchi‐Levi, 2007). Moreover, some customers do not claim their rebates when small. The amount may be significant if many customers do not claim the rebate. The mail-rebate is a sure method of the management of inventory. Prompting customers to mail when they need a rebate provides an ideal mechanism for planning. The main reason for the existence of a business such as HP is to make a profit. Thus, it is ethical for HP to offer mail-in rebates give that those that want to benefit out of it will send their claims. After all, consumers have the liberty to choose whether they want the rebates or not.

Reference
Chen, X., Li, C. L., Rhee, B. D., & Simchi‐Levi, D. (2007). The impact of manufacturer rebates on supply chain profits. Naval Research Logistics (NRL), 54(6), 667-680.