Decoding the Smartest Method of Marketing: The Cashback Scheme

It’s a dull Sunday. A notification pops up on the screen of your phone – Weekend Offer! Grab 100% Cashback on the X&Y Bill of Rs. 300. Valid only today. Rush to your closest store now!
What do you do after this?
1. Getaway with it and forget about it
2. Think about it and make a plan to try it.
Cashbacks are offers where you receive a certain amount or percentage of what you spend back in your account. The word works magically, literally making it mean getting the cash spent back. In India, they are often confused with reward points. The brands promise cashback but, what they actually give are reward points. Reward points as part of the loyalty program include giving a certain benefit on future transactions depending upon the value of the current transactions.
The deals, however, vary across brands. Earlier they used to be popular with the credit card issuing companies. As the online market expanded, it wasn’t just the high-end established brands that used the scheme but also, the existence of those brands came into play whose sole business is being an aggregator which informs customers about cashback on various brands.
If you are someone who is mad over marketing, you’d first confirm whether the cashback is through a virtual currency in your virtual store account or your actual bank account.
Case 1
If it’s in your virtual account with the store, let’s call it store wallet – you know it is a trap! The store gives you a certain percentage of your bill as points in your wallet which can be redeemed on your next transaction. For instance, the bill is worth Rs. 300 and consequently, 100% cashback means Rs. 300. This is nothing but, a rather profitable version of a ‘Buy One Get One Free’ deal (which is nothing but, a 50% off) for the store. Here, you will be constantly reminded that you have Rs. 300 in your wallet which can be utilized to buy anything in the store. If you fall for the bait, you are bound to spend more than that, unlike the 50% off deal where all you did was buy two products at the price of one and exploit the offer. Through cashback, you are giving the brand another chance to seep into your system.
Good luck with rewarding the brand!
(Reward points, right? But, for the brand.)
Case 2
If it’s in your bank account, it is a classic case of affiliate digital marketing. Notice that the offer will be valid only if you use a particular bank’s credit/debit card in the transaction. It wouldn’t be wrong at all to find out that the brand and the bank are partners. Both the stakeholders get a particular percentage when the amount is deducted from your account. We won’t get into the ancient marketing guru dialogues of “a brand doubles the price to give a discount and then, actually gives a product at the original price itself.” But, what we will definitely ponder over is that a brand does share the profit with its customer too in an affiliate marketing mix. Being the homeland of a rather cost-sensitive population, India can sustain the existence of brands that realize the importance of giving the populous a share in the profit. Finally, a customer saves money in a transaction and that’s the end of the story.
A brand will continue to sell its products. Customers will continue to buy products from brands. The distinctive element is the creative marketing plan which has the ability to entice a customer. An affiliation with a cashback site is a very smart move for smaller brands as they don’t have the budget to run above-the-line advertisements. A cashback site automatically promotes the brand.
An aggregator between brands and customers to implement the cashback scheme works wonders. It generates sales and pulls traffic for brands that are affiliated to it whereas, informs buyers about the best cashback offers on brands. Needless to say, customers use such sites to find out and compare which brand has better deals and ultimately choose the brand with the best offer. In a nutshell, it is a win-win for both the brand and the customers.


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A marketing enthusiast, media graduate who aspires to bring a demanding revolution for independent media, cinema, and music, someday. "I don't wish to get my own writings/stories out until I promote the unknown gold in the field of content" says Bhoomika.

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