David Livingston

BrainTrust Query: Cash Back Popularity on the Rise, But Is There a Better Way?

March 11, 2010

FROM RETAILWIRE:
Cash is king. During the past two years, this age old encouragement from our fathers has been driven home with punctuation. In the loyalty and rewards game, cash is king in a different way. Will cash back rewards continue to become more and more popular with consumers, or is it just a temporary reaction to this recession?      [more...]

I estimate that last year, between three of the credit cards I use for business and personal use, I averaged 2.7% in cash rebates. I take advantage of all the 5% rebate rewards. It amounts to a few thousand dollars a year which is a nice bonus. Knowing who is giving you an extra 5% off is just smart business.

These cash rebate cards have been around for a long time. You really can't score big using one card but rather using at least three cards to battle for your business. As long there is strong demand, especially among high volume users, I would expect to see cards getting more creative. I used Discover only on 5% rebates promotions. American Express only on their 5% promotions, and Visa for 5% on gas, groceries, drugstores, 2% on travel and dining, and 1% on everything else. Never use a card isn't paying at least 1% on first dollar purchases.

Those airline mile cards are mostly a waste since we can now fly just about anywhere for $200. I only use an airline miles card when they give you a free ticket after making your first $1 purchase and then I cut it up.