Budget overrun during a cash back offer

THE CONTEXT

An advertiser (a food manufacturer) organised a promotional offer for a product. The consumer could request a full refund for the product involved in the offer, provided that conditions for validity were met. A specialised management centre was tasked with handling the campaign. However, due to the campaign’s success, the budget that the advertiser had originally earmarked for the campaign was exceeded.

GM CONSULTANT INTERVENTION

GM Consultant’s loss adjusters analysed the claim by checking that the cash back offer was in compliance with the specifications of the coverage, checked the volume of products involved in the offer, checked that the rules for customer participation were respected (date of purchase, date entry form was sent, contact information, proof of purchase, etc.), and checked compliance with the management cost threshold limit.

This entailed a three-part analysis:

  • Gaining an understanding of the management centre’s control environment in order to assess its level of control over the entry verification process (part of the processing was outsourced to a foreign country).
  • Carrying out a comprehensive analysis of the operation’s results in order to establish a balance sheet.
  • Performing a detailed test on a sample entry form to verify those identified as “compliant”

The work done by GM Consultant led to adjusting, using a proportional approach, the declared budget overrun in order to limit it to the amount corresponding to the volume of products involved in the covered offer.

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