Cashback: what it is and 3 reasons to have it
23/09/2022Popular in the US since the 90s, cashback has never been bigger in Brazil. Discover how this feature can benefit an e-commerce.
Despite already setting annual records, the pandemic drove e-commerce to unprecedented levels. The market was spurred by consumers turning to online stores drove retailers to look for solutions that offer a competitive edge, such as cashback. According to the Brazilian Retail and Consumer Society (SBVC), 62% of Brazilian companies made changes to their payment strategies during this period, including cashback.
Brazilian consumers are increasingly accustomed to cashback, paying boletos, registering in , acquirincashback programs a credit card with cashback or simply choosing online stores that offer this benefit. A 2021 SBVC study found the number of Brazilian e-shoppers using cashback in online sales jumped from 17% to 45% from 2019 to 2021.
The following segment will summarize what cashback is, how it works and the main reasons why retailers should implement it on their e-commerce platforms.
What is cashback?
Cashback, as the name suggests, is an incentive program where a percentage of the amount spent is paid back to the consumer. In other words, customers who purchase from an e-commerce or physical store receive a reward based on the amount spent. Cashback can be returned as money or store credit.
Cashback is a US invention. In 1998, a company called Ebates – now known as Rakuten Rewards – launched the program in 1998, offering up to 25% cashback for on-line sales in around 40 different stores – the program is currently available in over 3500 stores, in a variety of niches. Ebates and discount coupons are a big part of American culture
How cashback works
The easiest way for an e-commerce business to offer cashback is through API integration with a cashback platform that will manage the payment and reimbursement processes. The digital store decides which products will offer cashback, the percentage returned to customers and how the benefit is provided. A certain amount may be sent to a specific bank account or made available as store credit for a future purchase, which is a good way to build customer loyalty.
3 reasons to implement cashback in your e-commerce business
Cashback is, first and foremost, a means to attract and retain customers and benefit everyone involved. The end consumer will access a cashback app or website, choose a registered store, complete a purchase and subsequently receive back a certain amount of money back. The platform that connects a customer and an online store will charge for brand exposure or receive a commission, paid for by the retailer. Here are the benefits that cashback can bring:
Competitive differential
There are aspects that can be crucial at checkout if your product is available elsewhere, including cost of delivery, delivery waiting times and whether or not there are any purchase-related benefits – such as cashback.
Increase your customer base
The cashback platform can increase brand exposure and attract new customers. The data customers provide during the cashback process can also support planning for more assertive digital marketing campaigns.
Customer loyalty
The feeling of being rewarded for a purchase can encourage customers to return to the same store in the future and increase the repurchase rate. The cart abandonment rate tends to fall if the store offers cashback.
Online payments: Bexs Pay can assist sellers in Brazil with transactions in local currency
Whether the seller offers cashback or not, they need to offer the most popular online payment methods in Brazil to unlock a potential market of over 200 million customers. With the Bexs Pay PSP solutions, your e-commerce business can accept Pix, national credit cards, boleto and other popular payment methods in Brazil. Monitor sales in real-time through your dashboard, request transfers at any time and get paid in your currency of choice at any bank in the world. Contact us to find out more!
