If you listen to the commercials on the radio, it seems businesses anticipate that everyone in America is getting a tax refund this year. There are dozens of ads imploring consumers to spend their refund on a new car, mattress, eyeglasses, furniture or other big purchase. If you believe the advertising copy, the refund allows you to buy the product practically for free.
Only the thing is, the refund is already YOUR money. This sounds obvious and we know it intellectually, but we don’t always consciously think of refunds in this way. The gap between paying and receiving it makes it more difficult to see the linkage, just as the time separation between credit card charges and the bill sometimes results in surprises.
The delay is a factor with rebates too: we receive a check or pre-paid card in the mail and it feels like a gift, when, in fact, it is a return of funds we have already spent. This is not a bonus, rather payment of a loan we proffered with no interest charges.
Yet, despite the smoke and mirrors of the whole refund/rebate operation, there is something appealing about getting money back. Think about how you can use this to your advantage. Can you hold back a small portion of the salary pool and use it (plus the interest) to provide a bonus at the end of the year, or give another form of recognition after a particularly stressful quarter? Maybe you can offer a rebate to consumers — knowing that many of them will not apply for it or ultimately cash in on it even if they do — that allows you revenue to give additional funds in donations or sponsorships? Or offer a rebate only if they buy your product in multiples to share as an incentive to spread your message?
If people are happy to loan you their money without interest and are actually excited when you give it back, it’s worth considering as part of your marketing strategy.