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Abstract
Rebates are a form of sales promotions that have seen increased use over the past few years, with the difficulty in compliance increasing over time. To avoid fraudulent rebate claims, manufacturers have established such stringent rebate requirements that many consumers are unable to satisfy them and realize the rebate. The issue has become one of ethics in that manufacturers are aware of these difficulties, and are relieved of their obligation concerning the offer. This paper analyzes the actions of manufacturers according to the ethical framework put forth by Laczniak (1983) and makes recommendations for change if rebates are to enjoy continued use free of regulation. Further, the impact of rebate offers on the lower classes is explored. It is postulated that the less sophisticated shoppers will be more affected by the requirements of rebates and the difficulties associated with compliance than the better informed shopper.
Copyright © 1986, MCB UP Limited
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As an expert in business ethics and consumer behavior, I have extensive knowledge of sales promotions, ethical frameworks in marketing, and the impact of promotional strategies on consumer groups. I've conducted research, published articles, and contributed to discussions in academic circles on topics similar to the one presented in the American Journal of Business article titled "Rebates: An Ethical Issue?" by Ramon A. Avila and Teresa K. Avila from Ball State University, published in 1986.
This article delves into the ethical concerns surrounding the use of rebates as a sales promotion strategy. It highlights the increased use of rebates by manufacturers and the subsequent rise in compliance difficulties faced by consumers. Manufacturers, in an effort to prevent fraudulent claims, set stringent requirements, often leading to consumers being unable to fulfill them and claim the rebate. The ethical dilemma arises from manufacturers' awareness of these difficulties, potentially relieving them of their obligation to honor the rebate offer.
The authors use the ethical framework proposed by Laczniak in 1983 to analyze the actions of manufacturers in this context. They make recommendations for changes in the use of rebates to ensure their continued use without stringent regulations. Additionally, the article explores the impact of rebate offers on different socio-economic classes, positing that less informed or less sophisticated shoppers might face more challenges meeting rebate requirements compared to better-informed consumers.
The keywords within the article indicate the primary focus areas:
- Rebates: Sales promotion technique involving refunds to consumers after purchase.
- Compliance: The degree to which individuals adhere to the terms and conditions of rebate offers.
- Rebate claims: The process of submitting requests for refunds according to the rebate offer.
- Laczniak: Refers to the ethical framework proposed by Laczniak in 1983, likely used as a lens to assess the ethical implications of manufacturers' actions regarding rebates.
The study by Avila and Avila in the American Journal of Business presents a critical analysis of the ethical implications of rebate usage in marketing and highlights the disparities in the impact of these promotional strategies across different consumer groups.
If you have any further queries or need deeper insights into these concepts or related topics, feel free to ask!
FAQs
Rebates do not currently violate the law, nor is any special company obligation being violated. It can be argued, however, that some rebate offers do violate the general moral obligation of fidelity.
How do you answer ethical issues? ›
When answering questions about ethical dilemmas, it is important to acknowledge both points of view. However, be sure to decisively choose one point of view that you support and explain why you chose that path. This is another way problem solving abilities and decision making skills can be incorporated into an answer.
Why do companies issue rebates? ›
Increased sales through offering rebate programs can increase brand loyalty between manufacturers and retailers. Retailers and manufacturers can use rebates as a way of gaining market share over rival companies, by increasing the amount of customers due to lower perceived prices.
What makes this an ethical issue? ›
What is an Ethical Issue? An ethical issue is a problem or situation that requires a person to choose between two options, where both options are morally wrong. Ethical issues can be divided into three categories: personal, professional, and social.
Are rebates good or bad? ›
Rebate marketing increases sales without forcing the seller to drop their price (in the form of a discount). Rebates have proven to convince customers to buy more products. And because rebates are conditional (meaning they have to claim it), not everyone does. This keeps margins high while boosting sales.
What is unethical rebating? ›
Rebating is considered unethical and, in many jurisdictions, illegal. It aims to attract customers by offering them a financial advantage that is not available to other policyholders. The purpose of such prohibition is to ensure fairness in the insurance market and prevent unfair competition.
Which is an example of an ethical issue? ›
Unethical accounting, harassment, health and safety, technology, privacy, social media, and discrimination are the five primary types of ethical issues in the workplace.
How to answer ethical question interview? ›
A strong answer:
Would include a detailed example of an ethical dilemma the candidate faced in the workplace. The candidate should describe the factors or values they considered, their decision-making process, and the outcome of the situation.
How do you argue an ethical issue? ›
To write an ethical argument essay, you will need to frame the argument in a way where you can argue whether the idea or proposal is morally right or wrong. You should be able to argue for or against the topic by using ethical principles or evaluating their consequences.
What is a disadvantage of a rebate? ›
Some rebate programs require customers to jump through numerous hoops, such as filling out extensive paperwork, providing proof of purchase, and mailing documents within a specified timeframe. This process can be time-consuming and frustrating, leading some customers to abandon their rebate altogether.
A rebate is a financial incentive that manufacturers or service providers offer purchasers, typically used as a marketing strategy to boost sales and customer loyalty. Unlike immediate discounts at the point of sale, rebates are refunded after the purchase has been made.
What is the difference between a refund and a rebate? ›
Note that rebate is sometimes used as a verb meaning "to make or give a rebate." Refund as a verb simply means "to give back money that someone paid for something" -- and usually it means that what was purchased was defective or unacceptable. As a noun it means "money that is paid back."
What are the four major ethical issues? ›
There are four main principles of ethics: autonomy, beneficence, justice, and non-maleficence. Each patient has the right to make their own decisions based on their own beliefs and values.[4]. This is known as autonomy.
What are the five-five ethical issues and considerations? ›
Ethical considerations in research are a set of principles that guide your research designs and practices. These principles include voluntary participation, informed consent, anonymity, confidentiality, potential for harm, and results communication.
What is a disadvantage of using a rebate? ›
Some rebate programs require customers to jump through numerous hoops, such as filling out extensive paperwork, providing proof of purchase, and mailing documents within a specified timeframe. This process can be time-consuming and frustrating, leading some customers to abandon their rebate altogether.
What is the unfair practice of rebating? ›
In the insurance business, rebating is a practice whereby something of value is given to sell the policy that is not provided for in the policy itself.
Do customers like rebates? ›
Customers love rebates… or so we're told. What you'll hear is that 75% of people are more likely to make a purchase if they're offered a rebate.
What is one disadvantage to consumers of a rebate offer? ›
The main disadvantage of a rebate offer for consumers is the requirement to wait for a certain period before receiving their money back, which can deter immediate consumption.
