Cashback Ideas: Boost Sales with Effective Rewards

Cashback rewards are an effective way to attract consumers and build a loyal customer base. They have become one of the most popular reward programmes among businesses owing to the returns they offer. Customers look forward to cashback rewards mainly because they offer a partial refund on their purchases. Research shows that in 2022, the global cashback and refund market reached USD 3325.9 million. It is expected to expand further and reach USD 4989.69 million by 2028. In this article, you will learn all about cashback ideas, how they benefit businesses and how to devise effective ones. Read on to find out!

Cashback Promotion: Know About It

A cashback reward falls under the loyalty programme category. This is because it increases customer loyalty towards your brand. It encourages the customers to make more purchases as the cashback can be redeemed on the next purchase. Thus, they keep coming back for more. In certain cases, cashback payment is also done through bank wire transfers or pre-paid cards.

In order to claim the cashback, a customer must register for it. He shall be able to avail the cashback reward after the claim is validated and approved by the company. There are certain terms and conditions attached to the claim. One can claim the cashback reward if he meets the conditions. There may be certain qualifying product categories, purchase dates and specific stores, for which cashback is offered.

Why are Cashback Offers a Trending Marketing Strategy?

Cashback offers have become an effective marketing strategy for a number of reasons. One of the main bases is that a portion of the money spent by the customers comes back to them. Thus, the products purchased appear discounted. Most customers are cost-conscious and look for discount offers to save money on their purchases. Cashback ideas work well among them. As stated above, cashback is mostly provided on future purchases. Many times, it can be availed only in specific categories. Thus, it encourages the customers to purchase more items from the categories you wish to promote. Besides, cashback offers are easy to float as they do not require devising extensive gift cards, giveaways or schemes.

How Cashback Offers Work?

The cashback idea works on a simple matrix. When a customer purchases something, he pays for it. A small percentage of the money paid by him is returned to him as a cashback reward, mostly on his next purchase. Let us understand this with the help of an example. For instance, a customer purchases a T-shirt priced INR 999 from your store. As soon as he makes the purchase, he gets a notification that he is eligible for a cashback of INR 59 on his next purchase. The cashback amount can be INR 59, 99 or whatever you decide. This is a reward for purchasing from your store. Many businesses calculate the cashback reward based on their loyalty programme. 

Ideas For Cashback Rewards 

Here are a few cashback ideas to help you set up campaigns and make the most out of them:

1. Weekend Plan

In order to encourage sales, you can double the cashback reward on certain weekends. For instance, on Paytm – Weekend Wallet Days, the brand offers 2 % extra cashback on gift cards.

2. Happy Hours

It is also a good strategy to announce more reward points or cashback during certain hours of the day. It may be the afternoon hours if you are a cafe or food delivery app as that is the time when most people likely place orders. TGIF mostly runs happy hours from 5 pm to 8:30 pm. It provides a buy 1 get 1 free offer on the same drink. 

Your happy hours can be two or three hours in the evening if you sell garments, electronics or other products. People are expected to make more purchases when they see such rewards. 

3. Cashback for New Users

You can win over new customers by offering cashback on their first purchase. It will urge them to try your products instead of the brand they were using earlier. Brands such as Nykaa offer new user coupon codes to expand their customer base.

How Cashback Promotions Benefit Businesses?

There are many advantages to using cashback promotions. Here are the various ways in which they can benefit businesses:

1. Attracts New Customers

Everyone loves rewards in the form of cash. Customers are more likely to try products that offer cash back in comparison to those that provide rewards in other forms. Thus, it helps widen your customer base.

2. Move Ahead of Competitors

By offering cashback, you can attract the loyal customer base of your competitors. It has been noticed that customers do not hesitate to switch brands if they get a good offer. By attracting their customers, you can move ahead of your competitors.

3. Encourage Repeat Purchases

Offering cashback is a great way to encourage customers to come back for more. To redeem the reward, they will indulge in repeat purchases thereby increasing your sales.

4. Customer Insight

In order to avail of cashback, customers are required to fill in certain details about themselves. This gives access to some information about the customers which you can use to generate their interest in your brand and serve them better.

5. Easy to deliver

Implementing a cashback idea is quite easy. Offering cashback rewards does not require much effort or money yet it helps generate good returns. 

Things to Take Into Account When Developing a Cashback Promotion Ideas

Here are some of the things that you must consider while developing a cashback promotion:

1. Set a Clear Objective

To begin with, you must set a clear objective for offering cashback. Your cashback strategy should be determined based on your objective. Different plans require different strategies to ensure success.

2. Consider Your Target Audience

While devising a cashback promotion, you should keep your target audience in mind. Various geographic areas, demographics and income groups require the implementation of different types of cashback ideas.

3. The Terminology and Clauses

Your offer should be easy to understand. From the terminology being used to convey the offer to its clauses, everything should be kept simple. The terms and conditions attached to it should also be clear. This simplicity and transparency will bring the customers back to you.

4. Select the Time Cautiously

You must identify a time when the promotion is likely to fetch maximum returns and run it around that time. Running the offer at certain times/ days proves to be more effective. Thus, you must leverage such hours to generate greater profit.

5. Gauge the Performance

It is necessary to measure the performance of your campaign to understand how successful your cashback idea has been. Based on its success, you can make changes to the campaign. The information will also come in handy while developing new campaigns.

Cashback Promotions Ideas That Have Become a Hit: Examples

Here are some of the examples of cashback promotions that have proved to be successful:

1. Cashback and Sweepstakes Promotions

Fellowes came up with a superb cashback promotion with a sweepstakes twist in Europe. Under this, the customers got a chance to win a trip to the Windy City by purchasing any product under the qualifying category. This promotional initiative increased their brand awareness as well as sales.

2. Cashback and Trade-In Promotions

Canon launched this cashback reward offer to promote its newly launched products – EOS and XC10 cameras. Under this offer, the customers could trade in their old cameras while purchasing these newly launched products from Canon. This gave a boost to their sales and increased their customer base.

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Conclusion

Cashback rewards are certainly an effective way to attract customers and increase the sales count. Many businesses around the world are strategically implementing their cashback ideas to win over customers. Cashback promotions are easy to develop and implement. They encourage repeat purchases in addition to attracting new customers.