Imagine being rewarded for shopping? That’s the cycle promoted by the benefit called cashback, which is essentially when a company gives back part of the amount spent by the customer to be used in a future purchase at the store. According to research by IZIO&Co, which analyzed the purchasing behavior of over 5 million consumers across 24 retail chains, this strategy ensures 4.8 times higher retention in the six months following a purchase. Additionally, the average spending of cashback users is 85% higher than that of consumers without access to the benefit. In an increasingly competitive market, this technique has proven to be an effective strategy for customer loyalty.
According to Hygor Roque, Director of Brands and Partnerships at Uappi, an e-commerce specialist company, “Cashback is a powerful strategy because it creates the perfect cycle of repurchase. When the customer gets part of their purchase amount back, they start seeing the store as a place that values the relationship and offers real advantages.”
The importance of cashback in an omnichannel strategy
However, no one wants the surprise of accumulating cashback for an online purchase, only to be told at the store: ‘This cashback is only valid on the website.’ And vice versa. That’s why the real difference happens when cashback is integrated into an omnichannel strategy. ‘Imagine the customer shopping online, using the cashback in a physical store, and then being incentivized to return to the online platform with a new offer? This seamless experience creates a continuous consumption ecosystem, keeping the customer engaged and loyal to the brand across all channels,’ explains Roque.
Cashback goes beyond a simple refund—it creates an emotional incentive that strengthens the customer’s connection with the brand. When well implemented, cashback increases opportunities for cross-selling and upselling, a sales technique used to raise the average order value by offering a more complete, up-to-date, or larger version of a product or service the customer was already planning to buy.
Challenges and Personalization of Cashback
Despite its benefits, implementing an effective cashback program requires planning. Omnichannel integration is one of the main challenges, as customers expect a seamless experience across different shopping channels. To achieve this, companies must invest in a system that ensures synchronization between online and offline sales platforms, with real-time updates.
Personalization is also essential to cater to different customer profiles. Cashback programs can be adjusted based on purchasing behavior, offering greater benefits in favorite categories or creating incentives for special occasions like birthdays. ‘CRM tools and data analytics are essential here, as they help segment the customer base and create more relevant and personalized experiences,’ he adds.
Metrics to Evaluate Cashback Success
Some metrics can help measure the effectiveness of a cashback program:
- Repurchase Rate: Indicates whether cashback is effectively bringing customers back.
- Increase in Average Order Value: Measures whether customers are spending more to take advantage of the benefit.
- Omnichannel Engagement: Evaluates how many customers are using cashback across multiple channels.
- Retention Rate: Tracks customer loyalty over time.
- Lifetime Value (LTV): Assesses the impact of cashback on generating continuous value for the brand.
“Monitoring these indicators helps determine whether the program is delivering a positive return on investment and what adjustments can be made to further improve the customer experience,” concludes Hygor.
