Cashback is a mechanism that has grown significantly in popularity in recent years. As companies increasingly focus on attracting and retaining customers, the practice has expanded across various sectors, becoming one of the most common perks in the world of CRM. An acronym for Customer Relationship Management, CRM refers to how a company manages its relationships with consumers, aiming to satisfy current customers and attract new ones.
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Literally translated, the term cashback means “money back” and involves rewarding the consumer by returning part of the amount spent on purchases, investments, or fees, for example. The practice started with credit card companies and has evolved into other industries, becoming a frequent benefit in loyalty programs. Cashback is now one of the most popular advantages customers receive, having a direct impact on the numbers.
Types of Cashback
As customer relationships evolved, cashback also took on different forms. In the travel and hospitality industry, for example, the accumulation of miles has been a popular format for many years, allowing users to exchange points for trips, hotel stays, or upgrades. This market has also evolved into platforms for buying and selling miles, making point usage easier and providing more options for consumers.
In banking, besides points that can be exchanged for rewards, direct cashback to the account has also gained traction in recent years. The amount may vary, but a common offer is to receive 1% of the amount spent on the credit card bill. In addition to being easily understood by consumers, this type of cashback does not involve point expiration or the need to figure out the most efficient use of miles.
More recently, CRM platforms have evolved to gather cashback from different companies. Thus, a purchase made at one retailer may yield a reward at another, increasing the user’s options and providing greater versatility. This initiative can strengthen customer loyalty to the brands involved. In some cases, the product in question may not be a recurring purchase, reducing the importance of a future reward. However, if a purchase leads to a discount at another company where the user is already a customer, the synergy between the brands is maximized.
The Advantages of Cashback
Virtually everyone likes money. Therefore, it’s clear that a mechanism that returns part of the money spent is viewed positively by consumers. However, this is not the only reason why cashback is important when choosing a company. As mentioned, the practicality of cashback stands out among the various loyalty methods. While points or miles may come with complicated rules and deadlines for usage, cashback is returned directly in cash to the customer, clearly showing the reward received. Even if the discount is only valid for a future purchase, the value received is evident to the consumer.
Another important point is loyalty. Especially in highly competitive markets, it’s not uncommon for consumers to seek specific promotions or special conditions for their first purchase, hopping from one company to another. However, if they receive a reward that can be used later, the customer is more likely to feel valued and use the same service repeatedly.
Moreover, there are loyalty programs with different reward levels. In this case, the customer can earn increasing cashback as they make more expensive or frequent purchases. Thus, the advantage of continuing to choose the same company becomes even greater. Additionally, “gamification” can be employed, encouraging customers to level up, such as from “bronze to silver,” fostering more loyal customers in the process.
The existence of cashback and different levels in loyalty programs also encourages an increase in customers’ average spending. In practice, cashback acts as a discount, which can influence the decision on how much to spend. If a percentage of the amount is returned, the consumer may opt for a more expensive model. Additionally, if a larger purchase results in an upgrade in the loyalty program, the extra advantage could be the deciding factor for the consumer.
StarsPay Benefits
In today’s landscape, user experience and cost-benefit are key factors in choosing a service, and StarsPay stands out in this area. Our customers enjoy several benefits that make a difference in the final numbers, process efficiency, and distinctive service. Everything is designed so that your payment system contributes to your company’s success, increasing conversions and reducing complaints.
Among the advantages we offer to StarsPay customers are zero chargebacks, the best currency conversion rates, and top-tier fraud prevention services for local transactions. Our team of payment processing specialists is available with bilingual support 24/7. So, any problem or question you have will be handled by experts. We care about our customers just as much as you care about yours, and together we ensure a premium experience in online payments and transfers.
Contact StarsPay’s commercial team now at: [email protected] and learn how we can make a difference for your company.
