There's More To Rebates Than Just Cents Off, CU Prof Says

Published: April 17, 1997

There's more to using a rebate than merely saving a few cents, a new study of shoppers reports.

People who are willing to spend extra time and effort sending in a rebate will tend to believe the product they are getting is pretty swell, says Donald Lichtenstein, a marketing professor at the University of Colorado at Boulder.

But when shoppers respond to advertised sales, they are less likely to attribute high quality to the brand. Why?

"People are more likely to develop brand loyalty where the effort expended to obtain a product is higher," Lichtenstein said. “The reason is that, if the effort to redeem is high, shoppers need some justification for going through the effort," he said.

For rebates, the justification is likely to be "the brand is good." For sale items, the justification is more likely to be "because I got a deal."

These were among the findings of a survey of 565 grocery store shoppers in Boulder, Colo., and Fayetteville, Ark. The study was aimed at finding out how different types of shoppers respond to different types of shopping promotions. Results were similar in both communities.

The study will be published in the 24th edition of Advances in Consumer Research. It was co-authored by Scott Burton of the University of Arkansas and Richard Netemeyer of Louisiana State University.

The study shows that certain types of shoppers tend to fall for certain types of sales promotions. For example:

•People who like coupons are willing to spend more time in grocery stores to "get a deal" but are less likely to be strictly "price conscious" of the items they select than are people who are more prone to advertised sales.

These shoppers may use coupons for reasons other than price, such as the feeling "I'm getting a deal that you're not getting," he said.

But they may not be getting a deal if the store price is too high to make using the coupon a good deal. And they may use them to purchase items they normally wouldn't use.

•People who like to purchase products on sale are highly conscious of price and show little loyalty to particular brands. Again, they like getting benefits without expending much effort. Thus, they attribute their purchase behavior to the sale instead of the brand.

•Those who like rebates are similar to people who like sales but tend to be more loyal to particular brands. The effort to use a rebate sends the shopper looking for a reason for the purchase, and the reason is likely to be "because I like the brand."

•Those prone to buying items on display tend to be impulsive, rarely use shopping lists and don't like rebates, Lichtenstein said. They are at high risk of paying too much by falling for end-of-aisle displays that appear to be special sales but actually are at regular price.

This group of shoppers also tends to equate higher quality with higher price, which is not true in many cases, he said. This "mindless" sort of shopping rewards merchants that do not provide the best values, he cautioned.

"You've got to be vigilant," Lichtenstein said. "We want to reward merchants that do us better."