Are Rebates and Customer Loyalty Programs Illegal? A Strategic and Legal Case Study of Intel and Eaton

July 2014 Pricing

Rebates, discounts, and other forms of incentives are common parts of customer loyalty programs.   Done right, they improve the profitability of the firm and the reduce costs for customers.  As such, they are common marketing programs and are often included in marketing and pricing recommendations. Yet recent court rulings indicate that they are sometimes illegal. […]


“Do not do what someone else could do as well as you. Do not say, do not write what someone else could say, could write as well as you. Care for nothing in yourself but what you feel exists nowhere else. And, out of yourself create, impatiently or patiently, the most irreplaceable of beings.” -Andre Gide (1869-1951)

  1. Innovation is king. It’s essential to differentiate your brand from your competitors’, and necessary to avoid being commoditized.
  2. That said, remember that however unique your offering is, there is always an alternative to fill that customer need.
  3. Customer engagement is a critical means of maintaining loyalty over time. Firms must strive to engage customers on multiple levels.
  4. This can include directly surveying for or responding to customer feedback, marketing campaigns, social media, pricing tactics, segmented offerings, and many more possibilities.
  5. But if you are the principle player in the market, be sure that your tactics rewarding loyal customers aren’t seen as bullying or predatory.
  6. When in doubt, have a good lawyer on speed-dial.