Cashback used to be a marketing tactic solely for those earning high incomes. But thanks to the implementation of Open Banking and advances in technology, cashback is now available to anyone with a debit or credit card and money to spend. With the flashy slogan of “save money with spending”, cashback is an incredibly attractive and efficient way to acquire, retain and reward customers. In this article, we’ll be covering what personalised cashback exactly means, and what the main benefits are.
What is personalised cashback?
Cashback is a simple concept: offer customers a percentage back on the money they spend on a product or service.
Customers may receive this percentage back through an app, on their debit/credit card or on a cheque every month. As a company, you may offer cashback on specific categories, or even on specific days of the month. This is different to reward points, where consumers receive rewards for making purchases and then need to convert those rewards into money or gift cards before using them.
Cashback is an activity that takes place after the purchase has been made, rather than at the Point of Sale. This offers customers a much more seamless payment experience which helps build trust and loyalty down the road. As we’ll see below, there are many other benefits to implementing a cashback system.
The benefits of using a cashback programme
Does not decrease product value
One of the main benefits of cashback programmes is that they offer financial incentives to customers without decreasing the price of the actual product. This means that customers will still value products and won’t be as influenced by product price when it comes time to purchase.
Increases customer loyalty
Cashback programmes put money back into the pocket of the customer. This gives customers more control over their money and allows them to choose what to spend their savings on. This type of tactic helps increase customer loyalty as well as encourages repeat purchases: if a customer knows they will get cashback when purchasing at your shop, it’s more likely they will return for future purchases.
Convenient and practical
With a cashback system, customers don’t need to understand the ins and outs of a complex reward system or build up points in order to get the incentive. With some cashback programmes, many consumers don’t even need to download an app or use a new credit card. This makes it very practical for both the consumer and the retailer: companies don’t need to inundate customer with emails or text messages, and customers don’t need to spend time piling up on coupons. Win-win!
Valuable insights
Cashback cards offer valuable consumer-related insights to companies such as spending habits, location of purchase and product preferences. The data can then be used to offer even more personalised cashback rewards, segment customers into various demographics and even target competitors’ customers!
Affordable
Cashback programmes are low cost to deploy. They are simple to implement and don’t require a lot of capital to set up and maintain. Overall they increase sales volume while still protecting the profit margin - a good mix for any retailer looking to grow.
How can I offer cashback?
What are some ways you can offer cashback to your customers? We’ve listed a few below:
Cashback websites: Many customers like to earn cashback through specific cashback sites. As a company, you’ll need to sign up to the cashback website and they will then advertise your business on their platforms. You’ll need to pay them a commission for every cashback programme you set up.
Cashback credit cards: Other customers like signing up to specific credit cards that offer cashback on certain categories, such as petrol stations and groceries. These cashback systems are a little more complex to set up and would require offering customers a separate credit or debit card specifically for cashback.
Upgraded debit cards: The simplest and cheapest way to offer cashback is to simply upgrade the customer’s current debit card. Thanks to Open Banking, a tool like Recash can help retailers set up a cashback programme through customers’ bank details, bypassing the need to offer new debit cards or sign up to a cashback site.
Getting started with Recash
Through the new Open Banking directive, Recash can help retailers set up cashback systems in a simple and effective way. We are registered as an AISP entity in the UK, which means we can connect retailers to their customers and help them create personalised cashback offers.
Once you create an account with Recash, we will set you up with a dashboard and cashback system. You will be able to set how much cashback you want to offer customers depending on the category, then send a request to customers to join your programme. They will be able to securely share their bank details, and immediately start earning cashback on their purchases with you.
With the Recash dashboard, you will be able to see which competitors your customers are shopping at, which categories are the most popular and how much your customers are spending in your store. You’ll then be able to use this data to target your competitors’ customers, offer cashback to an even larger audience and further reward your most loyal customers.
Now with Open Banking, It’s easier now than ever to offer real, financial incentives to your customers without negatively impacting your bottom line. With a personalised cashback programme, you can maintain the price of your products, increase customer loyalty and gain valuable insights on consumer spending habits. And with a tool like Recash, cashback will help you stay ahead of your competitors at all times.