Cashback: 5 questions and answers to learn more about Cashback 19 July 2023 Where it was born, how it works and why it is so popular Let’s find out more about the Cashback formula! Competition in the market is increasingly fierce and companies must continually find new ways to attract new customers and retain existing ones. Whether consumers are more attracted to products that offer special offers than over those that do not has been investigated by various research studies. Among the most popular types of offers and promotions, we find Cashback. But how exactly does Cashback work? Who came up with the idea?Let’s find out more about this promotional formula! How do Cashback promotions work in practice? The operation of a Cashback campaign is very simple: after the consumer has made the product purchase, they enter their data and upload the purchase document to the online platform for the refund request or send it to a dedicated post office box. Once the request has been verified and approved, the consumer receives the refund by bank transfer directly to their bank account or by crediting directly their credit card or PayPal account. How did it come into being? Cashback originated in the mid-twentieth century in the United States. The first form of Cashback was offered by BankAmericard (now Visa) in 1966. At first it provided a 10% refund on purchases, later reduced to 1-2% with the spread of the programme. But its real popularity is due to Discover Financial Services, a subsidiary of Morgan Stanley, which entered the credit card market in 1985 and the following year began to offer a Cashback program nationwide. Why are Cashback campaigns so popular? Cashback campaigns appeal to consumers because they are financially motivating. They attract much more than the classic discounts, so much so that, according to recent research by Statista, 46% of respondents stated that they consider the presence of a Cashback significant in choosing one product over another. From the point of view of companies, interest is growing: research has shown that retailers that have activated Cashback campaigns have increased their sales up to two and a half times. What are the benefits for your company? The benefits are varied, here are some examples: making new products known reaching a wider target audience and acquiring new customers increasing brand awareness collecting data to understand the purchasing habits of customers boosting sales growth increasing purchase frequency retaining customers How is a Cashback organised? Organising a Cashback requires managing certain operational aspects: drafting transparent regulations with the conditions of participation producing clear communication messages in compliance with regulations dedicated customer support service creating a mailbox, if you have chosen this method, for receiving reimbursement requests if, on the other hand, you have opted for a digital platform, this will have to be configured and tested collecting reimbursement requests received checking documents received making refunds Our advice is to rely on a specialist agency that will take care of all these aspects. If your Cashback campaign also involves foreign countries, check that the agency you choose is competent and has experience in international promotional initiatives. To date, Promosfera has organised competitions and promotional activities in over 70 countries and is therefore able to fully support you. Want to learn more about how to organise a Cashback campaign? Read What a Cashback campaign is, how it works and how to organise it Do you want to organise a Cashback campaign? Contact us
