How does cashback work?

by jaylin.bartell , in category: Banking and Credit , 10 months ago

How does cashback work?

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1 answer


by sibyl , 10 months ago


Cashback is a type of reward program in which customers receive a certain percentage of the amount they spend on eligible purchases back in the form of cash or credit. Here's how it typically works:

  1. Cashback Offers: Retailers or credit card companies partner with cashback sites, offering a specific percentage of cashback on purchases made through their websites. These cashback offers may vary and can range from 1% to 10% or more.
  2. Signing Up: To take advantage of cashback offers, customers need to create an account with a cashback site or sign up for a credit card that offers cashback rewards.
  3. Shopping Through Cashback Sites: Once registered, customers can visit the cashback site and search for the desired retailer or product. They click on the provided link, which redirects them to the retailer's website, ensuring that their purchase is tracked.
  4. Tracking and Verification: The cashback site tracks the user's purchase and receives a commission from the retailer for referring the customer. This commission is then shared with the customer as cashback.
  5. Pending Stage: After making a purchase, the cashback status typically shows as "pending" on the user's cashback account. This period allows for verification, as it ensures that the purchase is not returned or canceled.
  6. Confirming and Payout: Once the return period is complete, the cashback moves from the pending stage to the confirmed stage. At this point, the cashback is deemed valid, and the customer can request payout. The cashback can be paid out via various methods, such as direct bank transfer, PayPal, or gift cards, depending on the cashback site or credit card.
  7. Redemption: Once the cashback is available for redemption, users can choose to cash out or accrue the rewards for future use. Some cashback sites may offer higher redemption values for specific gift cards or partnerships.

It's important to note that cashback offers usually have specific terms and conditions, including exclusions, limitations, and expiration dates. Reading the fine print and familiarizing oneself with these details is crucial to maximize the benefits of cashback programs.