What is cashback and how to use it?
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the expression “cashback” means the return of part of the purchase amount to the client’s card. Over time, this part is used in order to receive a discount and it is applied not before the purchase (i. e., it does not reduce the original cost), but after making purchases. Cashback is a percentage of the amount spent by the client.
The term came to Russia from the UK and the USA and means “refund of money” when translated into Russian.
Loyalty applications are on the move and in addition to replacing plastic cards with virtual ones, cashback has also transformed into the return of bonuses to a virtual card in exchange for money on a bank card. The cashback percentage varies – some organizations may offer higher payout rates than others. With these discounts, the client has the opportunity to pay off up to 100% of the cost of a service or product (based on the company’s terms and conditions).
The vast majority of businesses now approve cashback as an acceptable rewards program solution. With cashback, there is no need to initially put a discounted price on business services or products, and in the meantime you encourage customers to make repeat purchases.
Simply put, a cashback loyalty program is the best option to increase sales and stimulate customers, thereby motivating them to come back and shop with you again.
How does it work
The client installs a virtual card of your business on his smartphone. After the purchase, a percentage similar to bonuses from the amount of the last purchase is returned to his card. The client learns about this through a push notification, which is displayed on the lock display of his smartphone.
The idea is that the more money a client spends on your products, the more bonuses will be returned to him personally on his virtual loyalty card Mvideo cashback becomes the best option for customers to have a discount on the product or service they purchase.
For example, with a cashback rate of 10%, a consumer can get 300 bonuses back for a purchase worth 3, 000 rubles. This brings incentive to customers to purchase the product and allows the business to sell more.
Bonuses can be accrued at the checkout during the payment period if a virtual card is provided or after a set time after completing the purchase. At the same time, you have the opportunity to set restrictions on the crediting of bonuses for payment for certain products and services or for clients with different statuses.
As a rule, one ruble = one bonus. To motivate new customers to come to you again, you can use a “welcome bonus” – an inflated cashback on the amount spent on the first purchase. Be sure to notify the client about this by sending him a push notification.
In the case of returning goods or requesting a refund, bonuses are also debited from the client’s account, and if there are few bonuses on the card, then a negative balance is formed on the client’s account. All this is displayed on his virtual map.
Cashback in the form of bonuses can be awarded only for goods or services paid for in cash.
Conclusion
Cashback is a tactic for potential customers to save on paying for their next purchase, and for businesses it is a chance of sales growth.
