Tremendous Research Reveals 4 in 5 Rebate Programs Are Ineffective

Small changes can yield 50% more sales — and no surprise, cash is still king

NEW YORK–(BUSINESS WIRE)–Tremendous, the simplest way for businesses to send rewards and payouts, announced the results of its 2023 study on consumer rebates, revealing that 82% of rebate programs are not fully optimized to incentivize purchases.

This study, in partnership with behavioral design consultancy The Decision Lab (TDL), is the first of its kind to delve into the efficacy of rebates in almost 20 years, and the first to cover digital rebating. At a time when companies across industries are focused on reducing spend, the study found marketers can net 50% more sales by optimizing rebates, without changing their budget.

The difference between a great rebate program and a lackluster one, the report finds, hinges on providing incentives that consumers deem valuable and framing them in ways that maximize value. Consumers see prepaid Visa cards as virtually equivalent to cash transfers. Mailed checks and store credit are worth less, shaving off anywhere from $16 to $130 in perceived value from a $300 rebate.

“We couldn’t believe there was no research on optimizing digital rebates. We changed that. Marketers and shoppers alike will benefit from these findings, as it turns out the payouts people prefer — either a prepaid card or a choice of redemption options — are also the ones that deliver the most bang for your buck,” said Nick Baum, co-founder and CEO of Tremendous.

Other key findings from the report include:

  • Redemption rates for digital rebates hover around 38% for rebates of $20 or less.
  • Redemption rate increases as rebate amount increases, hitting 50% for $50 rebates.
  • The most common rebate value seen in the marketplace today is 30% of the retail price.
  • A $40 prepaid Visa card is equally as valuable to prospective customers as a $40 cash transfer.
  • For rebates between $100-$300, people overwhelmingly prefer cash and prepaid Visa cards over gift cards to specific retailers.

The study is based on a rigorous two-stage discrete choice experiment, which prompted research participants to choose between a set of realistic, randomly generated promotional offers, and then rebated them with real Tremendous rewards. TDL then analyzed a total of 6,500 data points to determine how product type, messaging, rebate amount, incentive type, and redemption requirements influence the efficacy and profitability of consumer rebates. This research also informed a step-by-step guide on building an optimized rebate program.

To test the findings of this report, Tremendous will fund two companies’ rebate programs with $10,000 each. Tremendous is accepting entries until Sept 10. In October, Tremendous will announce the winning partners, and work closely with each company to fund and create an optimized rebate program. Interested companies are invited to apply here to participate. For more information on the report, register for the webinar on August 15.

About Tremendous

Tremendous is the simplest way for businesses to send rewards and payouts to over 200 countries. Recipients can choose from over 1,000 redemption options, including prepaid Visa cards, Venmo, PayPal, direct deposit, charitable donation, and specific gift cards to more than 800+ retailers. Over 10,000 companies, including Google, Visa, and MIT, use Tremendous to send hundreds of millions of dollars in employee bonuses, research incentives, referral rewards, and more. And the platform is free to use – you only spend what you send.


Whitney Topping