People like money.

It’s a simple concept that we often forget about when buying and selling goods and services. This incentive is one of the reasons why cashback as a promotional mechanism is so powerful. It is an excellent opportunity to increase revenue and drive volume through your channels while rewarding your customers.

Sales promotions are a vital component for many retail and e-commerce brands, and cashback offers, in particular, are continuing to grow substantially year on year.

That’s because they work. Running a cashback promotion adds real tangible value to the transaction for your customer.

So what exactly is a cashback promotion? It’s pretty straightforward; the word cashback says it all. A consumer purchases the promotional product and then claims a pre-determined amount of what they paid back in cash from the manufacturer.

The amount a consumer can claim back depends on the specific promotion. There is also a certain period when they must have purchased the product to take advantage of the cashback offer. There is also a deadline for registering for the claim, which is usually slightly longer than the purchase window.

Now that we’ve defined a cashback promotion let’s delve into why so many brands choose to implement this type of incentive into their marketing strategy.

Cashback promotions are among the most effective methods of increasing sales, boosting customer satisfaction, and heightening brand awareness.


01. Entices customers to switch brands

Cashback promotions help your brand rise above the competition, win new customers, and gain immediate sales from the added value you can deliver.

It’s a subtle shift in the promises made to a consumer that your offer can meet their needs more accurately than a competing brand. This incentive creates the temptation to switch from a brand with which they are familiar.

Your offer could be the deciding factor for a customer choosing between your brand and another, even if they are inclined to be loyal to that other brand.

If the consumer has a positive experience with your brand beyond the promotion, it is a great opportunity for you to build on that relationship and encourage repeat business.

Rebate Promotion Fulfilment

02. Responsibility is in the hands of the customer

Although it is wise to budget for full compliance with a cashback program, a surprising proportion of customers do not get around to fulfilling the requirements needed to access their cashback.

There can be several reasons for this – they simply may forget about the offer or fail to submit their claim within the promotional period. Whatever the reason, we can conclude that a cashback promotion contributes to a customer’s decision to purchase even though they may not take the necessary action to redeem their reward.

A cashback offer entices consumers to buy from a brand on the basis that it could be a lower price point than what other brands are offering.

03. Access to more customer data

Consumers must provide specific information when redeeming their cashback value. Some of this data is necessary as part of the claim process, i.e. proof of purchase, payment details, etc.

However, further questions can be asked to probe deeper into the customer’s experience with your brand and can be extremely useful in directing future promotional efforts and customer relationship management.

Tactical questioning can help refine your customer profiles and provide insight into where your customer’s loyalty lies. Moreover, the questions you ask serve to establish important trends that can be analysed and used to improve your proposition.

Cashback promotions are a tried-and-tested way to sell products at full price, helping to maintain the value perception of a brand by rewarding the consumer for their loyalty with a cash payout in return for proof of purchase.

04. Boosts brand visibility

Brand awareness is the fundamental building block of brand loyalty. It can have a significant effect on consumer behaviour and can strongly influence purchase intentions.

Price promotions naturally pique consumer interest and have a positive impact on brand visibility. The beauty of running a cashback promotion is that while your brand receives increased exposure due to an attractive offer, the brand’s perceived value is not affected because the price point remains the same and is in line with other brands.

The brand gains a competitive edge by offering a financial incentive without the risk of devaluing its image.

Pioneer Cashback Promotion

Final thoughts

If you’d like more information about the logistics of operating a cashback promotion, please feel free to reach out today.

We can work together to develop a plan that works to increase your customers’ satisfaction.

For more reading, check out our blog post on running a successful gift with purchase campaign.