By Lesley Fair

According to a recent industry study, annual rebate payments are closing in on the $500 million mark.  Nearly one-third of computer equipment is sold with a rebate offer, as well as a quarter of digital cameras, big-screen TVs, and other high-tech gear.  But rebates also figure on the list of business practices likely to draw the ire of exasperated consumers.  Here are some steps you can take to make rebate promotions a win-win proposition for your company and your customers.

• Not-so-fine print.   Make sure the material terms and conditions of your offer are clearly and conspicuously disclosed to consumers before they buy.  The important stuff – what consumer need to do to get the rebate, any other purchases they need to make, the deadline for applying, etc. – shouldn’t be buried in a dense block of fine print.  
• Before and after?   Ads that include rebate promotions should prominently state the before-rebate cost, as well as the amount of the rebate.  Only then will consumers know their actual out-of-pocket cost and have the information they need to comparison shop.
• Keep it simple.   A complex rebate program with unusual terms or multiple purchase requirements can translate into a customer service headache.  You’ll be swamped with calls from confused or angry purchasers, causing your fulfillment costs to skyrocket.  In the long run, a simple promotion with clear terms and conditions is more likely to contain costs and keep customers content.
• Don’t “hoop” it up.   It’s reasonable for companies to establish procedures to protect themselves against fraud, but requiring consumers to jump through onerous hoops to get a rebate can land you in legal hot water.  At some point, a company’s practice of bouncing rebate applications for frivolous reasons begins to look like a scheme to defraud consumers.
• Dismayed by delay.   Rebate promotions should clearly and conspicuously disclose when consumers can expect to get their check.  If you say nothing, the FTC will assume you intend to send checks within a “reasonable” time – defined in recent cases as 30 days.  Failing to deliver rebates in a timely fashion can result in law enforcement action, as defendants in recent FTC and state Attorney General cases will attest.
• Pushing the envelope.  Some consumer advocates have raised concerns about rebate checks sent in envelopes deceptively designed to mimic direct mail solicitations.  Generally speaking, the FTC leaves the design to the company, but obvious efforts to discourage consumers from opening the envelope will raise red flags.
• Trust, but verify.  Many advertisers hire fulfillment houses to process applications and send out checks.  That’s fine, but remember the buck stops with you.  Consider building into your contract express performance standards and a mechanism for monitoring the work contractors are doing on your behalf.  Do your part by paying your bills on time so the fulfillment house will have the funds it needs to pay your rebates.  The same holds true if you’re promoting rebates paid by other companies.  Be on the look-out for signs they’re not doing right by purchasers.

Lesley Fair is an attorney in the FTC’s Bureau of Consumer Protection who specializes in business compliance.