Bill Hanifin's RetailWire Blog

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?

MY COMMENTARY:
Thanks to all the respondents for great comments on the question of cash back.

I see a few big points rising to the top:

1. The discount airlines have made it tough to get excited about waiting to accumulate 30,000 miles for a free round trip, especially when redemption is not always easy.

2. Consumers want rewards programs that are simple and easy to understand. The more we ask people to read the fine print, the more skeptical they become (and the higher probability of disengagement).

3. We're all mostly frustrated with the credit card companies. Bank of America's decision to stop OD fees on debit cards, announced today, is a step in the right direction.

3. Cash back is preferred by most of our contributors.

I still wonder if some improvements can be made in the way of adding partner funding as mentioned or by structuring the coupons to drive a bounce back (one or more) visit.

Thanks to all for the comments.

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

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