Why big brands are offering cashback rewards - and you should too
Ever wondered why so many brands—like PayPal, Sony, and American Express—offer cashback rewards?
Cashback loyalty programs are popular because they’re a proven way to drive customer retention, increase sales, and outshine the competition. If you're considering launching a cashback reward program, this guide will help you understand how it could work for businesses like yours.
What is a cashback reward?
A cashback reward is a simple but powerful concept: customers earn money back on their purchases, either as cash or credits they can use later.
Here’s how it works:
- A customer makes a purchase.
- The company returns a percentage of the purchase value.
- Customers can spend their cashback immediately or save it for future purchases.
Think of it as getting paid to shop!
How Cashback Loyalty Programs Work
Cashback programs operate on various models:
- Affiliate-based programs: Businesses partner with affiliates to offer cashback deals.
- Licensed offers: A third-party company sets up and manages the cashback rewards system.
From the customer’s perspective, the process is seamless:
- They shop online or in-store.
- Cashback rewards are tracked and displayed in your app or microsite.
- Customers can redeem their cashback for products, upgrades, or services.
For customers, the user journey is super easy. Users simply enable an extension that shows them deals and coupon codes on a site. At checkout, the users get a discount code and the commission can be saved as cashback or points. Depending on your setup, users can see the rewards they’ve earned in your app, or microsite, and use them to pay for products, services, upgrades etc! You decide.
Wondering how cashback rewards could work in your business?
Why do businesses offer cashback rewards?
When you offer cashback rewards, you’re doing more than just giving your customers money back - you’re showing them that you care.
But offering cashback isn’t just about generosity - it’s a smart business move.
Key Benefits of Cashback for Companies:
- Boost customer loyalty: Cashback incentives encourage repeat purchases.
- Reduce churn: Customers have a tangible reason to stay with your brand.
- Stand out from competitors: A well-designed cashback program can be a deciding factor for buyers.
- No hidden costs: With the right solution, you only pay for the platform, not individual rewards.
Why Customers Love Cashback Rewards:
- Instant value: Unlike points systems, cashback is immediate and gives instant gratification.
- Budget-friendly: Helps customers stretch their spending power.
- Simplicity: No complicated rules - just shop and save.
Why do customers want cashback rewards?
The value you offer to customers is one key driver of loyalty.
Shoppers want to feel like they’re getting something in return for choosing you - and what better way than more money to spend? Cashback gives customers more value from their purchase - which means they will feel like they’re getting a better deal. Cashback is also an instant satisfaction and money-saving benefit. No more waiting to accumulate points to get rewards…
Plus, cashback rewards help customer stretch their budgets - a big help during the current cost of living crisis.
Benefits for customers
- Customers get more in return for spending with you
- Easy user experience - customers get cashback for activities they’re already doing
- Helps customers stretch their budgets
Benefits for businesses
- Reduce churn - customers are incentivised to keep choosing you
- Become your customers’ brand of choice by offering something your competitors don’t
- No extra cost to you - with the right solution, the rewards your customers redeem won’t cost you anything! You only pay for the solution itself without paying per reward
- Easy and quick to launch - at White Label Loyalty, we do most of the heavy lifting for you
How cashback can create customer loyalty
Offering cashback rewards can be an effective way to create loyal customers for several reasons:
1. It's tangible. Cashback rewards can be used right away. It's not like other loyalty programs that require members to wait to accumulate "points" before receiving anything.
2. It's easy for customers - they simply shop as usual. As a bonus, they can easily see how much value they're getting.
3. It encourages repeat purchases by showing customers that every time they shop with you, they'll get more value out of their purchases. It encourages them to keep buying more stuff from the same company!
Cashback reward examples
PayPal Rewards
PayPal rewards is the latest in a long line of incentives that big brands are rolling out to reward loyal customers.
PayPal is offering customers cashback to attract new users and retain existing ones.
PayPal rewards gives customers money back when they choose to pay via PayPal. It’s an easy way for shoppers to save on purchases, and it’s totally free. Plus - it’s an extra incentive for customers to choose PayPal as their core payment method.
This is just one example of how a cashback campaign can differentiate a brand and drive loyalty.
Want your own branded cashback extension to offer rewards to your customers?
Launch Your Cashback Loyalty Program Today
It’s more important than ever for businesses to offer every value-add they can to retain customers. According to Toluna research, 45% of consumers plan to reduce unnecessary purchases as a result of rising expenses, while 31% plan to compare prices and brands.
That's why brands across all different industries are giving customers cashback - it's one way to offer more value.
Cashback is a great way to motivate your customers to shop with you more often. It’s also a quick and easy way to stand out from your competitors.
White Label Loyalty offer an out-of-the-box cashback solution to make it more attractive to become a customer and add value to stay a customer. Our turnkey cashback solution is easy to implement, fully customizable, and proven to drive results. With our platform, you can launch a cashback reward program tailored to your brand’s needs, giving your customers more value, and keeping them loyal to your brand.
Get in touch to find out more.
Recommended Posts
If you enjoyed this article, check out these relevant posts below.
Share this Article
Helen Walker
Senior Content Marketing Executive
Helen is our Senior Content Marketing Executive. She shares valuable information about the Future of Loyalty and will keep you up to date on the latest industry insights...