Cashback

Cashback is a form of consumer incentive that refunds a portion of a purchase price to the buyer. It is offered by banks, merchants, and third-party platforms to encourage spending, loyalty, and continued use of a payment method or retailer.

Cashback can be earned in several ways: through credit cards that apply a percentage of purchases as a rebate to the cardholder’s account; through merchant programs that provide a rebate after a transaction; and through online portals or apps that give cash back when shoppers access partner sites.

Amounts are typically expressed as a percentage of eligible purchases, often ranging from about 0.5% to 5%. Some programs offer higher rates for specific categories or during promotions, while others use fixed amounts per purchase or tiered structures. Redemption options include statement credits, direct deposits, checks, or gift cards, with minimum thresholds in many programs.

Limitations and considerations include the need to spend to earn rewards, potential fees or interest that offset benefits, exclusions on certain purchases, and caps on earnings. Rewards can also be affected by stacking rules, blackout periods, and how long cashback remains available.

Cashback programs have grown with the expansion of credit cards, online shopping, and digital wallets. They vary widely in structure and cost, and consumers are advised to compare rates, redemption terms, and any annual fees before enrolling.