Why Do Consumers Prefer Cashback Offers In 2024?

Over the past few years, inflation and increased cost of living have hit consumers hard, with prices of goods 31% higher today than in 2020. Although inflation growth is expected to slow in 2024, that doesn’t mean it will go down anytime soon. In this climate of financial strains and uncertainty, consumers are more cautious about how they spend their money. And while higher prices push them to actively seek discounts and special offers, cost is not the only factor influencing buyers’ behaviour. Customers want greater value for their money, where value means propositions that align with their personal needs and financial capabilities.

Why Are Cashback Campaigns Profitable for Brands?

Cashback offers are a very simple mechanic that is easy for consumers to understand and for you to communicate, which is a key factor in crafting effective sales and marketing offers. Moreover, they have fewer cost implications for your brand because customers pay the full price upfront and receive a rebate later. This means your business maintains initial revenue and cash flow. Another advantage is that only a percentage of the customers who purchased the eligible products apply for their rebate, while with sales discounts the redemption rate is 100%. This allows you to stretch your budget further and offer more generous incentives that will make you stand out from competitors.

How do cashback promotions work in practice?

There are a few different ways this can work. With Benamic, 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. 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 bank transfers to pre-paid branded cards, Google or Apple Pay e-wallet, Revolut, and more.  

How Cashback Promotions Could Work For You

Sell More, Spend Less

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The Benefits of Cashback Promotions for Brands 

There are many advantages to cashback campaigns beyond increasing revenue. You can use this type of promotion to drive customer loyalty, attract new customers, boost brand awareness, and much more. Despite the common misperception that cashback offers and sales promotions, in general, are short-term fixes to increase sales, you should strategically implement them to support and boost your long-term marketing strategy.          

Open the Door for New Customers

Financial incentives are an affordable means to broaden your reach to new customer groups unfamiliar with your brand. Cashback promotions can encourage an initial purchase, potentially leading to long-term relationships.   

Entice Consumers to Switch Brands

Cashback promotions are a great way to give your brand a competitive edge and win over customers who are considering switching from their usual brand. Think about it: who doesn’t love a little extra value? A cashback offer is the perfect temptation and could be the deciding factor for a customer choosing between your brand and another. And here’s the cherry on top: if they have a positive experience with your brand, you’ve set the stage for repeat business. So, in a nutshell, cashback promotions = more customers and more sales. Sounds like a winner to us! 

Collect Zero and First-Party Data

Cashback promotions are not just about the cash; they’re about the data, too! For marketers who sell through retail partners and don’t have a direct connection with their end customers, this is an incredible opportunity to acquire information that might otherwise be unavailable. Sure, customers have to provide some basic information as standard when redeeming their cashback value, like proof of purchase and payment details. But here’s the thing:  you can gather valuable zero- and first-party data by asking a few extra questions during the claim process. When customers are already interacting with your brand and have a vested interest in completing the form, they are more likely to give you the information you’re looking for. This additional data can help you fine-tune your customer profiles, figure out where their loyalty lies, and identify important trends, improving your proposition and the effectiveness of your future campaigns. Plus, you can use the information to segment and remarket. 


Maximise Your Marketing Investment

Maximising your marketing budget and return on investment from your promotional activity is always a high priority. Cashback promotions are a great option for achieving these goals because they are typically cheaper to deliver than blanket pointofsale discounts. As we mentioned before, customers pay the full retail price, but a percentage of them don’t claim their cash back. So, there’s the potential for lower-cost outlays with high returns. 


Boost Brand Visibility with Bigger, Bolder Offers

Unlike a standard discount, cashback promotions allow you to get a little more creative with your incentives, thanks to the lower redemption rates. This means less strain on your marketing budget and the opportunity to offer more attractive rewards that stand out from competitors. 

But why don’t all customers claim their cashback? Well, it could be a case of forgotten offers or missed deadlines. But even when they don’t claim their cashback, the promotion still plays a role in motivating the purchase.  

Note: It is important to balance the attractiveness of your offer and expected redemptions and consider this in your budget (or consider insuring your promotion if you are especially worried your promotion could over-redeem). A good promotions partner can help you with this 😉. 

Don’t Sacrifice Perceived Quality

While price discount promotions also boost brand visibility, they can cheapen your brand’s image. Customers could have the impression you are selling off your product quickly and perceive it’s not worth the original RRP. Cashback promotions, instead, can boost brand visibility and add value to the customer’s experience without sacrificing your brand identity and the quality perception of your product. 

Improve Customer Loyalty and Retention

Customer loyalty and retention are key to any successful business, and cashback promotions are a great way to foster them. Not only do they incentivise repeat business, but they are particularly effective when framed within a wider customer loyalty programme. By offering rewards for repeat purchases, you can solidify consumers’ loyalty to your brand and encourage them to continue buying from you. 

Examples Of Successful Cashback Promotions

Co-Branding, Cashback, and Charity Donations to Increase Brand Awareness

Hisense leveraged its partnership with UEFA Women’s EURO 2022™ to present its products as high-quality yet affordable TVs and appliances to the UK public. They offered customers cashback incentives in the form of branded pre-paid virtual credit cards with the option to donate a portion of their rebate to Women in Sport to consumers purchasing TVs and Major Domestic Appliances. The campaign resonated strongly with customers, boosting sales and brand awareness. 

Cashback and Bundling to Drive Sales of Overlooked Products

To boost its heat pump tumble dryer sales, Miele strategically paired it with its top-selling washing machine and offered cashback on the bundle. Focusing on quality, efficiency, and lifestyle, the promotion redemption rate was unprecedented. Moreover, the campaign strengthened Miele’s relationships with retailers by making it easier for them to sell the two products as a bundle. 

Cashback and Trade-In Promotions to Shift Consumers Purchase Habits  

Hotpoint aimed to promote its innovative range in the UK and Ireland. As data shows consumers wait until the end of a product’s lifecycle before upgrading, the brand devised a promotion to encourage the replacement of old appliances with smarter and more efficient Hotpoint products. The promotion that combined cashback incentives with a trade-in upgrade was highly successful, increasing the demand for the Hotpoint smart products range. 

Considerations When Creating a Cashback Promotion

Many factors come into play when implementing this form of incentive-based marketing into your campaign strategy. We’ve covered some of the most important here – but it’s not an exhaustive list! 

Setting Clear Objectives for Your Cashback Promotion

Are you trying to reward loyal customers or attract new ones? Different objectives require different tactics. For example, if you’re trying to incentivise repeat business, you may want to offer a higher cashback rate for repeat purchases. If you’re trying to attract new customers instead, you may offer lower cashback rates for a wider range of eligible products or services.

Who Are You Targeting with Your Cashback Offer?

Who are you trying to reach? Is it a specific demographic, such as millennial or Gen Z consumers? Or perhaps you’re aiming to target specific geographic areas? If you are targeting multiple countries, you should also consider localising your promotion for specific regulations, languages, and currencies.

Creating an Engaging Hook and Offer

Firstly, make sure the promotion is easy to understand and communicate. If it’s too complex, it may not be as effective. And secondly, think about how generous the cashback offer will be. It should be attractive enough to entice customers to take part, but also be financially viable for your business.

Timing is Key

You want to make sure your promotion is running at a time when it will have the most impact, such as during a slow period for your business or a key shopping season. It’s also important to have a clear start and end date for the promotion so customers know they need to complete the purchase and claim their incentive within that specific timeframe. Additionally, while oneoff promotions can be effective, it is often better to consider how your promotion fits within your long-term marketing plan. 

Communicating Your Cashback Promotion

Promotional success is heavily reliant on your offer’s communication and messaging. Therefore, it’s important to have a plan to promote your cashback incentive across different channels, such as email, social media, print advertising, and reseller channels. 

Measuring the Success of Your Campaign

Finally, it’s essential to have a plan in place for measuring the success of your cashback promotion. This will allow you to track key metrics such as the number of participating customers, the overall cost of the promotion, the claim rate, and the return on investment. This information will be invaluable for future campaigns and will allow you to make any necessary adjustments to improve their effectiveness.

Final thoughts

Cashback promotions are an effective way to boost your ROI, as long as you keep your objectives clear, create a generous offer, and target the right audience. With a well-executed campaign, you can achieve great results in terms of increased revenue and better customer relationships. Cashback promotions are here to stay, and with the right approach, it can be a valuable addition to your marketing strategy.