What is a Cashback Promotion and How Does it Work?

When customers buy a product on promotion, they can get back a predetermined amount of the purchase price.

To claim the cashback, customers need to make a purchase, then usually keep the receipt, and then submit it online or mail it to the provided address. They may also need to fill out a form or provide purchase date, product details, and personal contact information. After processing the claim, the cashback is usually sent to the customer through direct deposit, a check, or sometimes as a discount for future purchases.

1. Mail-in Rebates: Customers pay the full price upfront and submit proof of purchase to receive cashback later, either by mail or electronically. This method often requires filling out forms and waiting for the rebate to be processed.
2. Digital Rebates: This type utilises apps or websites where customers can upload their purchase details and receive cashback directly to their accounts, offering a faster and more convenient way to get rebates.
3. Card-linked Offers: Cashback is automatically credited to a customer’s account when they use a linked card for their purchases. This method is highly convenient as it requires minimal effort from the customer post-purchase.
4. Retail-specific Promotions: These are offers provided directly by retailers, either online or in-store, where cashback is provided as a credit for future purchases or direct discounts on the current purchase.

After customers purchase an eligible product, they have to actively register their cashback claim with your brand. They can usually do it online on a dedicated promotional website. The claim will then be validated against the parameters you set out in the terms and conditions. This validation process typically involves checking the purchase receipt, ensuring the product was bought within the promotional period, and verifying other eligibility criteria.

The eligibility criteria should align with your promotional goals. For example, if your goal is to boost sales at certain retail locations, you could restrict eligibility to purchases made at participating stores. Similarly, to encourage uptake of specific product lines, you might limit eligibility to qualifying products. Additionally, if you’re looking to stimulate sales within a certain timeframe, setting specific periods for purchase and claim registration can be particularly effective. Each of these options offers a way to customise the promotion to meet your goals, demonstrating the versatility and strategic value of cashback campaigns.

Once the cashback claim has been validated and approved, the customer receives their cashback payment. The rebate can be delivered in various ways, from traditional methods like bank transfers to modern options like pre-paid branded cards, Google or Apple Pay e-wallet, Revolut, and more. Each of these methods offers its own advantages, such as convenience, speed, and security, and can be chosen based on your brand’s and customers’ preferences.