What is cashback and how does it work?
December 3, 2022

What is cashback and how does it work?


Wouldn’t it be nice to Earn money when you buy it? To know that this is indeed true! If you still don’t know what cashback is, here we will explain how this feature works.

Basically, cashback is a purchase model that returns a portion of the money spent on a transaction to the customer’s wallet. This has been popular in the United States since the 1990s and has gained traction in many countries in recent years when many companies have begun to bet on this functionality…

Keep reading and see how you can start using your cashback today.

What is cashback (cashback)?

Cash Back is an English term that means “cash back” in the free translation. When making a purchase at an organization of a company that offers cashback, the client earns a percentage of the amount spent as a bonus or cash.

However, cashback is neither a discount nor a points program: it really is A percentage of the value that is returned directly to the customer, who can choose what he wants to do with the benefits he has received.

The percentages can vary from store to store and range from approximately 0.5% to 50%, which attracts more consumers and encourages more purchases.

How does Cash Back work?

Understanding how cashback works are simple. Some companies specialize in cashback Retailers are involved.

Therefore, customers register on the websites of these companies, and then, when making a purchase online or in person, they are able to Get a percentage of the refund amount.

It also evaluates other types of companies, such as brands for credit cards and Partnerships with stores. In this case, they offer limited promotions that promise a cut of the money spent.

In both cases, customers receive a percentage of the amount spent on purchases made on the websites and points of sale of partner companies.

Then, when the refund reaches a certain amount, it can be withdrawn or used for another purchase.

For example: Imagine you want to buy a new cell phone that costs $300 at a particular store, which offers 2% cash back through a partner company. At the end of the purchase, you will receive $6 back. Cool, isn’t it?

That’s why it’s very important to avoid impulse purchases, research prices, promotions, and cashback offers, to spend consciously and still get a portion of the value back.



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Why do companies return the money?

In the process, everyone wins: people are able to buy more with their own money and businesses are able to attract more customers, as well as retain those who actually buy.

in this meaning, Consumers tend to come back to buy from a particular store When they know they will get a percentage of Cash Back on the amount spent.

Moreover, the chances of these clients referring the establishment to acquaintances who speak of interest are greater. Thus, the company is becoming increasingly known in the market.

And more than that: that tool distinguishes the stores from its competitors offering a cashback feature is beneficial for both the consumer and the company itself, as sales may increase due to this option.

“But where does the money come from?”, you must ask yourself. From the same deal! Because promotion and cashback companies bring new customers to their websites and points of sale, retailers pay these companies a commission for each purchase made. Part of this value includes the money that is passed on to the customer.

The client, in turn, will be more satisfied and the chances of a new sale increase, which makes this cycle work, thus benefiting everyone involved.

How to use cashback money?

Just as important to understand what cashback is and how these feature works is to conscientiously use the money received to get the most out of it.

Therefore, you need to compare prices and look for establishments that offer cashback before buying.

This way, you will not risk buying a product in one place and after a short time discover that you could have refunded part of the value.

Then, when you accumulate an amount, you can separate that money to use on other purchases, thus, spending less to get what you want.

You may think it’s a little, but from cashback to cashback you can add up a significant amount. The important thing is to shop wisely, buy what you can actually afford, and choose stores that offer this feature whenever possible.

What do you think of the information about what cashback is, how this feature works and how to use it to your advantage? Don’t waste time and start getting cashback on your purchases today!

Our goal is to reduce inequality and to show you simpler and fairer financial paths because everyone deserves a bright future. Financial education is one of the main pillars to achieve this, so we are here to accompany you on your financial journey.

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