Know the Definition of Cashback, Benefits, and Types of Promotions

Definition of Cashback – In the business world, it turns out that there are lots of strategies that can be implemented by a company in order to attract potential buyers. Starting from a unique promotional system, offering discounts or discounts to cashback features that are given to buyers.

Surely you are no stranger to the term cashback. Both through advertisements on TV, pamphlets that are on the road to online media, the term has indeed been widely used. The existence of a cashback feature can also be a special attraction for buyers.

Maybe you’ve only heard of the term cashback without knowing the ins and outs of it. Therefore you can read a review about the meaning of cashback in more detail in this article.

Definition of Cashback

Previously, we briefly explained the meaning of cashback. However, at this point, we will explain more deeply about the meaning of cashback itself.

The definition of cashback is an offer addressed to buyers. Later buyers will get refunds in cash, virtual money or returns in other product forms as long as they meet the product purchase transaction requirements specified by the buyer.

Most of the cashback given by sellers does not go directly to the hands of buyers. Sellers will provide cashback in the form of a deposit first. This is done by the seller is not without reason.

The reason is that this deposit method will be able to make buyers want to shop at another time at the same store using the deposit obtained from the previous cashback. Until now there have been more and more varied forms of giving cashback to buyers. Some companies also decide to provide cashback in kind.



Advantages of Cashback Promotion for Companies

Currently, many companies have started to dare to use cashback promos for products to be sold. This is not without reason, because there are so many benefits that the company will get from the cashback promotion it does.

So what are some of the benefits that companies will get from cashback promotions? The following is an explanation that you can read regarding some of the benefits that will be obtained from having a cashback promotion for companies.

1. Methods of Attracting New Customers and Retaining Old Customers

In the business world there are lots of competitors who offer the same goods or products. It could be that the products from company A are the same as the products sold by company B. This is where the company owning the product sometimes improves its promotion system so they can sell more of the goods they offer.

Because it is true that retaining old customers and attracting new customers is a difficult thing in such a tight competition.

Therefore, one method that is often used by companies in promoting their products is the cashback feature. Compared to the discount promo or buy 1 get 1, it turns out that the cashback promo looks promising.

The cashback promo offered by the company will be able to bring in new buyers and retain old customers. If it can last for a long time. Then the company will continue to grow and get the number of sales that are in line with the target and can even exceed it.

2. Able to Increase Repeat Orders

The existence of a cashback promo offered will build awareness of potential buyers to make purchase transactions for these products. If indeed the product offered is really in accordance with the needs of the buyer.

So it can mean the buyer will continue to make repeat orders. Even when there is no cashback promo because indeed they can get real benefits when using these items.

On the other hand, when the company offers a new product with a cashback promo. Buyers will also not think twice about using the new product. Because they already believe that the products issued by these companies are indeed capable of providing real benefits when used.

3. Enlarge Transaction Opportunities

Next is the opportunity for transactions that have a greater possibility than usual. As previously explained, the existence of a cashback feature can make it possible to attract potential buyers.

Those who really deal to make purchases of cashback products will also increase transaction opportunities. Especially when they feel the benefits provided by the product that has been purchased.

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It is highly likely that they will use the same product next time. This means that they will continue to purchase products on an ongoing basis even though there is no cashback promo offered for that product.

4. Not Undermining the Price

Apart from cashback, you may be familiar with promos for discounts or discounts. But did you know that many think discounts will be given to non-premium products that can be obtained by anyone.

There are even thoughts that discounts or price cuts can damage the price of these goods on the market. This means that the existence of a discount promo will also not have a guarantee of a good ending.

However, the story is different with the cashback promo. Because the cashback promo will not damage the price of the product. You will still purchase goods at the original price even though there is a cashback promo.

But you will get a cashback promo at the end of the transaction. This is where a better impression arises compared to discount promos. That way the price of the goods will not change, even cashback promos can also maintain the perception of buyers.

5. Raising Awareness

The more often cashback promos are given, the more awareness of prospective buyers will be able to make transactions for these products. Especially when the cashback figure given is quite large.

So the greater the interest of buyers to use the product. In addition, buyers will pay attention to these products while the cashback promo is still being offered. This means that a cashback promo for a product will also provide special interest for potential buyers.

Those are some of the advantages that the company will get from having a cashback promo for a product that will be offered to prospective buyers.



Disadvantages of Cashback Promos

Even though it plays a big role in attracting the interest of potential buyers. It turns out that the cashback promo that you often encounter also has some drawbacks in it, you know. You can read about some of the drawbacks of having a cashback promo in full in the explanation below. Even so, the deficiencies that will be explained in the following points are more towards the requirements specified by the organizer of the promo.

1. Purchase Terms

In cashback promos, there are usually certain purchase conditions that are charged to prospective customers. An example is the cashback promo of 10 percent for a minimum purchase of IDR 250,000.

For customers who make purchases with predetermined minimum requirements. Then they are entitled to get a cashback of 10 percent. Meanwhile, those who buy under IDR 250 thousand will not get a cashback promo.

2. Time of Purchase

When the customer succeeds in getting the predetermined cashback promo. It does not mean that the cashback will be given directly. The reason is there are other provisions that apply related to time.

For example cashback will be given within a period of several days after, it could also be several weeks or several months after the purchase was made by the customer.

3. Fees Given

Even though it’s rare, there are several organizers who emphasize fees given to customers who make purchases so they can get cashback promos.

However, if the customer cannot make dues payments as it should have been determined by the organizers. Automatically the cashback that will be given will also be forfeited.

However, as explained earlier, not all organizers enforce this. Therefore, the customer must also pay attention to every existing promo, especially cashback.

4. Flexibility

In the form of flexibility, it is very rare to find. This means that the organizers will provide cashback only for purchasing certain products. Or it could also be that the cashback given will be in certain forms such as goods.

Types of Cashback

Until now, there are lots of types of cashback that are easy to find around us. But do you also know what types of cashback are often around us. Well if not, then the explanation below will help you to know more.

1. Credit Card Cashback

The first type is credit card cashback. Credit card cashback is a program issued by a certain bank to provide benefits to the owner of that bank’s credit card.

In simple terms, the bank will provide cashback to the credit card owner when making a purchase transaction of an item in a certain amount. This cashback program is not only given in the form of refunds.

But sometimes there are also cashback programs that are given in the form of discounts. Of course, all policies related to the cashback program that are applied also depend on the particular bank.

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In addition, the amount of the cashback percentage also varies greatly depending on the nominal amount of the transaction made by the credit card owner. It should also be noted that the greater the nominal amount of transactions made will affect the amount of cashback that will be obtained by the owner of the credit card.

The accumulation obtained from the cashback program can be used to pay contributions, monthly bills or to shop for other goods.

Therefore, when you want to make a credit card, choose a bank that always offers attractive promos, such as cashback features and cooperation with various parties, such as airport facilities.

2. Online Shop Cashback

Next is the online store cashback. Maybe the online store cashback is the easiest for you to find on some of the online shop platforms that you frequently visit.

Online shop cashback is a cashback program that will be given to customers who have made a purchase transaction in a certain nominal amount. Of course, previously the minimum purchase amount had been determined in advance by the online shop.

An example is when an online store provides a cashback promo with a minimum purchase of IDR 250,000. So if you make transactions in the amount of Rp. 250 thousand or more, you will be able to get the cashback promo.

However, it should also be noted that most of the cashback promos provided by online stores are not in the form of refunds. But in the form of a discount when the customer makes the next purchase at the online store.

This means that the cashback promo can only apply in the form of a discount when a customer purchases a product at the same online store. In online stores, this condition can be referred to as consumer loyalty.

Where customers will purchase a product at the same online store in the next period.

3. Cashback Property

In the world of property, cashback promos are also often given. Where cashback property is a cashback program that will be given by the developer or property developer to customers who buy the products they sell.

Whether it’s for the purchase of houses, apartments, shophouses and others sold by the developer or the property developer. Most of the cashback given will be in the form of property supplies.

Examples are like TV, AC, Refrigerator and others. The existence of a cashback promo that is enforced is enough to arouse the interest of buyers. They think that getting a cashback promo will save them the cost of purchasing other properties when they have made a property purchase transaction such as a house, shophouse or apartment at a fairly high price.

4. Motor Vehicle Cashback

Motor vehicle cashback has the same meaning as property cashback. Where motorized cashback will be given by the leasing party to customers who purchase the products they sell, be it motorbikes or cars.

Most of the leasing will provide cashback in the form of goods. An example is a tablet laptop or the provision of motorbikes or cars when a customer buys a certain product that has been predetermined by the leasing party.

The existence of a cashback promo is also considered very effective in attracting buyer interest. Where they think they will get certain prizes when purchasing products on the leasing.

So, those are some types of cashback that we can easily find around us. Of course, Sinaumed’s is no stranger to some of these cashback promos, right?



From the explanation above regarding the meaning of cashback, it can be concluded that anyone can have a cashback promo. Because all customers can get a cashback promo when they successfully make a certain amount of purchases which have also been determined by the organizers.

Then the organizers will also get various benefits from the cashback promo they offer. One of them is the existence of loyal behavior on the part of the customer.

This is because the customer will purchase certain items from the company that provides the cashback promo. In addition, the condition of customer loyalty is also supported by cashback in the form of price discounts.

This means that this cashback promo can apply when a customer purchases goods at the same store and they will get a discount in accordance with the applicable provisions. This also allows the company or party organizing the cashback promo to get certain profits or benefits.

However, the organizers or the company must also really make accurate profit or loss calculations.

This is an explanation regarding the meaning of cashback, advantages, disadvantages, and types of cashback promos. Sinaumed’s can read books on consumer behavior as well as marketing which you can get at . As #FriendsWithoutLimits, sinaumedia always provides #MoreWithReading information.