Every time you spend in Wellcome supermarkets in HK , you will receive 1 stamp for free gift redemption. Wellcome enhances the whole loyalty campaign by doubling up the number of stamps if puchase is made on Saturday or Sunday. For first time visitors a brochure will be given stating the products up for redemption on one side, with boxes to collect the stamps on the other.
In this campaign a German cookware brand can be redeemed from the stamps collected. Pots and pans are needed by every household and tie in nicely with buying more groceries from the shop to cook with.
This is not the first time Wellcome use this type of promotion and their marketing department has experience with redemption rates and setting up this kind of campaign. They make extra space in the stores to display the cookware and have stocks in the supermarket so this is not gift with purchase or a mail in rebate system.
If Wellcome had worked with a fixed fee company they would just need to pay a certain amount of money to the promoting company and not need to worry how many customers redeem the items. The Fixed fee company would make profits as long as the redemption rate does not exceed a fixed %. As Wellcome is a very large company their policy is to self insure and therefore forego the associated costs of a risk premium.