Elly Financial Technologies Limited
54 Poland Street, London, W1F 7NJ
54 Poland Street, London, W1F 7NJ
Promotions are a critical factor that leads to success for all retail brands. Hence, your company needs a mechanism that works for you and rewards your clients. That’s where merchant cashback comes into play. Businesses can use it as a tool to boost revenues and drive traffic to their stores.
As a concept, cashback has seen unprecedented growth. With it, businesses can skip discounts and still attract customers. This way, they prevent the under valuation of products and add tangible value to each transaction. At the same time, buyers get a financial incentive to shop more.
The ultimate goal of merchant cashback is to get satisfied and loyal consumers without devaluing your products and services. Plus, you will get the chance to drive volume through various channels, increase sales, and retain shoppers. Finally, a fraction of the money spent at your store reaches your account as an added benefit.
This article defines the concept of merchant cashback and explains how it works. It also underlines the multiple ways you can use it to upgrade your business and reward clients.
Cashback is a mechanism through which retailers get a percentage of all eligible purchases back to their accounts. This concept of getting money back first gained traction over 35 years ago when Discover Financial Services launched a credit card with no annual fees. The card had a higher credit limit and offered a bonus on specific purchases.
Since then, consumer and merchant cashback has proven worthwhile across many industries. Setting a pre-determined amount of what shoppers spend and paying it back to them in cash is a potent stimulus. The scheme becomes even more appealing when your business regains, let’s say, 1% of all spending as a deposit on your account.
Unlike consumer cashback incentives, you don’t need to define times and days to get extra money back. Merchant cashback plans apply to all purchases throughout the year, and you will typically get the eligible funds back in one lump sum. It’s up to you to choose whether you’ll receive cashback on a monthly or annual level.
Companies that offer POS terminals use merchant cashback schemes to encourage retailers to hire their services. The process involves allocating a percentage of eligible spending back to the client after a set period. In most cases, the cashback amount ranges from 0.25% to 2%, depending on the provider. Here are the most common forms of merchant cashback:
· A flat cashback rate refers to a reward system regardless of the purchase type. For example, retailers can get a flat 1% cashback rate onall spending done in their stores.
· A tiered merchant cashback rate depends on all purchases that qualify throughout the year or another defined period. For instance, the retailer will get 1% back if the annual spend is below $10,000. Yet, if yearly purchases exceed $10,000, the rate will increase to 2%.
· Various rates can apply depending on where buyers spend their money. For example, grocery shopping might give you 0.5% back, whereas makeup purchases can entail a 1% merchant cashback.
Regardless of the reward scheme you implement, merchant cashback may not be substantial and evident after a few purchases. But as customers continue to spend money with you, the funds will accumulate, and you will soon start to see the gains. Cashback programs are an excellent way for avid shoppers to make the most out of their money.
By doing so, you state how much you treasure their loyalty. Customers appreciate when retailers help them reach their budgetary objectives. The value of their money plays a vital role when deciding where to shop next. A cashback program that tracks all their purchases and benefits in real-time is an excellent way to keep consumers coming back.
Many grocery store owners and retailers have already acknowledged cashback as a solid marketing strategy. One of the reasons why this scheme picked up steam is because it is a win-win scenario for both shoppers and sellers. Here’s how merchants can upgrade their business by introducing a cashback system:
· You have the ideal tool to boost revenues. Consumers receiving cashback won’t only buy again from the same company, but most likely, they will increase their future purchases.
· Another advantage is helping your brand beat the competition. This way, you can attract new consumers and generate immediate sales on top of merchant cashback.
· The incentive can be a decisive factor when shoppers are unsure where to spend. Your cashback program may be the single aspect that distinguishes your products from those of competitive brands. More so, cashback can urge people to switch from a familiar store.
· You can use the strategy to increase brand visibility by offering a competitive edge over similar products or services.
· Consumers enjoy a favourable environment that reinforces their confidence. Hence, they are more likely to spread the word about your shop. You can even enable clients to receive extra funds for referrals. As a result, your merchant cashback will rise exponentially.
Getting merchant cashback is what attracts most retailers to a particular terminal provider. They are contented, there are no risks, and the profit margin gradually expands.
So what if you knew you could have all these benefits for your business in no time? Undoubtedly, an all-inclusive terminal device with multiple features like Elly POS is the ideal solution. We charge no setup fees, and you can start amassing funds the moment your quote gets approved.
Elly POS accepts all payment methods, from cash and cards to digital payments and crypto. Merchants can calculate their prices with a user-friendly pricing plan calculator available on Elly’s website. Check out how Elly POS can improve your business today!