Check it Out: Wait 6 Weeks No More

Rebates applied at the point 
of sale. Sounds like a foreign 
concept to most consumers, including myself.

Who hasn't been reeled in by the lure of a money-back rebate, reducing the purchase price of that new dishwasher or refrigerator you need? The process sounds so simple, too: Just fill out a rebate form, mail it back with a proof of purchase, then sit back and wait for the check to arrive in the mail. At least so it seems.

There are reasons companies use rebates rather than just dropping the price of items at the point of sale. Chief among those reasons is that many consumers never redeem rebates. They either forget to do so, don't want to take the time to fill out the rebate form, lose the rebate form or wait too long to submit the claim (most all rebates have a time limit). Industry statistics reveal that between 40 percent to 60 percent of all mail-in rebates go unredeemed.

Realizing this problem existed, Offermatic, a free web service that tracks consumers' debit or credit card purchases and then offers them discounts and deals based on what they routinely purchase, seized the opportunity. Last December, the Sunnyvale, Calif.-based company launched a platform that enables consumers to receive targeted and customized automatic rebate offers without the hassle of coupons, codes and vouchers.

Privacy Invasion or Useful Tool?
Here's how Offermatic works: consumers sign up for the free service online and link one or more credit or debit cards to their account. Offermatic then anonymously and securely reviews their purchase history and identifies highly targeted and relevant money-saving offers from merchants. Offers are valued between $5 and $100, and the rebate is applied immediately to the user's debit or credit card after a purchase is made; no coupons are needed.

If you purchased $350 worth of baby supplies last month, for example, you could be sent via email a $50 rebate offer from Babies"R"Us. Participating retailers pay a commission to Offermatic each time a consumer buys one of their discounted products. Merchants don't pay for leads or impressions. National brands including Wal-Mart, Best Buy, Gap, Amazon.com and Home Depot are participating Offermatic merchants.

Conversion Rates Improve
Merchants benefit because better targeting equates to better results. Offermatic's solution enables retailers to use permission-based targeting of consumers based on their purchase histories. Beta testing of Offermatic's platform with top retailers yielded a 14.5 percent conversion rate on its offers, a dramatic improvement over average conversion rates of .5 percent to 1 percent via other channels.

Offermatic's solution affords merchants the opportunity to use hypertargeting, improving conversion rates by 10 times to 100 times over existing online or offline targeting methods. And as a result of accurate targeting, participating retailers cut down on wasteful marketing spending. Those savings can then be shifted to the customer offer or deal.

My feelings on Offermatic's service are conflicted. From a consumer's perspective, I'm leery about handing over my credit information to a third-party provider of any kind. Sure, I like getting great deals, but at what risk? That's the tightrope that Offermatic is going to have to balance to be successful. Conversely, from a retailer's perspective, I see little to no risk involved. Yes, you pay a commission when a customer makes a purchase, but you may not have ever gotten your message in front of that customer without Offermatic's data. No customers come free these days, especially highly targeted ones.