Gene Detroyer

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...]

It is all about being easy to understand and easy to use. Airline miles have driven these programs. Unfortunately, they have become quite convoluted and difficult to use. Point programs followed, but when one compares points needed to redeem an item, one realizes that the points have considerable less value than they appear.

Hence, the move to cash back. It is simple to understand. In most cases it is easy to use. And, the user knows the real value. From the merchant's point of view it is a cheap reward to the most loyal customers/users. Further, the merchant has the ability to increase reward levels for more loyal participants (a la Staples).

Cash back is not related to the economic times. It is about value and simplicity. The programs will grow and likely become more complex but no matter how complex, the user/consumer will understand the value because it is in pure and simple dollars and cents.