Radio Shack Tries Rebates That Focus On What The Customer Did <i>Not</i> Purchase

Radio Shack is launching a rebate experiment at the end of next month (July 27) that focuses on what the chain believes the consumers opted to not buy.

Consumers will go to the chain' site and use codes from their POS receipts to begin the process.

"We have the demographic information and we've got the fact they bought, say, a cellphone and, more importantly, what we have is what they didn’t buy, such as a warranty or accessories," said Chris Quinlan, the CEO of a vendor called Ohana that is working with Radio Shack on the trial.

"During the process of validating that rebate online, we give them the opportunity to spend that money directly at for a bonus or for specific products that have a higher probability they are going to purchase. It's not just arbitrary," he said. "The retailer and rebate sponsor, in this case the cellphone company or Radio Shack, also benefit. That rebate amount is spent back on a specific rebate sponsor or at the retailer. We're vastly eliminating the escheat issue because the money is being spent."

Ohana receives the POS information from Radio Shack and validates that the purchase requirements for the rebate offer are met. "We then interrogate the data to take into consideration the demographic information, such as name, address, where you live, age, purchase information and what you didn’t buy like a warranty or case," Quinlan said. "We put all that information through our system. The response to the consumer is an offer that has a high probability of being acted on because it is specifically targeted to that consumer."

With the new Radio Shack system, customers are not forced to buy something from Radio Shack. They can also get their refunds in the form of an "open-loop" MasterCard that can be used anywhere or as a Radio Shack gift card.

He said no secure personal information is shared with Ohana. "All that information is owned by the rebate sponsor," Quinlan said. "It's Radio Shack's information. We have marketing programs we work on with Radio Shack regarding the harvesting of e-mail, but it's completely the property of Radio Shack." Quinlan said the system requires no changes to Radio Shack's POS system.