Accrual
This is the amount of co-op money available for advertising. It may be based on a percentage of purchases or it may be a fixed amount. Before initiating an advertising program, the co-op department should always research the accrual.
Participation
Depending on the plan, the manufacturer’s share of the cost of advertising can range from 20% to 100% or more.
Requirements
The rules set forth by the plan must be followed to qualify for co-op reimbursement. If the rules are not followed precisely, a claim may be rejected. Among the most common requirements are:
- Illustration of the product in the ad. It may also be mandatory to use the manufacturer’s ad slicks and/or certain copy.
- Logo. Use and size of the logo may be specified.
- Prior approval of the ad may be required before running.
- Competing products. A manufacturer may refuse to reimburse ads in which competing products appear. Competing products require prior approval from the manufacturer.
Term or Timing
This refers to the time period in which a co-op plan is in effect. Generally the term is the calendar year, or the manufacturer’s fiscal year. There are also plans of shorter duration with specified starting and stopping dates. Adherence to the term of the plan will prevent loss of co-op funds, since funds are unavailable to the retailer after the expiration date of the plan.
Claim
Request for reimbursement from the manufacturer or distributor, filed by the retailer. Each plan specifies information, which must be submitted for a claim to be processed. Commonly requested items include:
- Invoice showing date, size and rate for the ad
- Tear sheet
- Claim form
- Address where claim is to be sent for processing
Filing period. Most claims must be filed within 30, 60 or 90 days after an ad runs. Claims filed after this stated period would usually not be honored.