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Marketers Risk Allegations of Rebate Fraud

Marketers Risk Allegations of Rebate Fraud

Consumers are furious with the marketing community’s apparent ambivalence toward complaints about mail-in rebates. They are taking their message to anyone who will listen – and legislators are finally listening.

Even the Federal Trade Commission is weighing in on the subject.

When a retailer or manufacturer fails to honor a commitment by declining a legitimate rebate request, regulators may consider that fraudulent.

It is also considered deceptive to mail a rebate later than promised on the request form. And lawmakers are beginning to crack down – with fines, sanctions, and new legislation.

Rebate requests are rejected so frequently that many consumers don’t know where to turn. First they try to contact the fulfillment house, then the rebate sponsor, and in exasperation, finally turn to a governmental agency or consumer hotline.

The stories are endless- and mounting. The problem is that manufacturers and retailers are doing little to quell the tide.

An estimated 40 million rebate requests are declined every year, and Hal Stinchfield, an international rebate management consultant, calls that “unacceptable”.

A typical scenario plays out like this- a consumer submits a rebate request to an obscure P.O. Box, doesn’t get their rebate, calls the 800 number to complain and finally reaches an operator halfway around the world who can’t find any record of the consumer’s request! As John Stossel might say- give me a break!

It is unlawful for any marketer to engage in fraudulent, deceptive or unfair business practices, and when they do, the consequences can de devastating.

If marketers don’t start listening to their consumers, they are risking everything: consumer loyalty, market share, legal challenges and staggering financial consequences.

“The irony is that these issues are so easy to correct and the cost to do so is virtually nothing compared to the lifetime value of the consumer to the brand – the only missing element seems to be an interest in correcting the problem”, says Stinchfield.

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