Your e-commerce glossary

All the terms you need to know to succeed in modern e-commerce, explained simply and clearly.

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What is Cashback?

Cashback rewards customers with a percentage of their purchase as store credit, gift cards, or refunds, making it a popular promotional strategy.

Explanation

Cashback refers to an incentive offered to customers for making a purchase, providing a partial refund of the money spent. It encourages repeat purchases and customer loyalty. Cashback rewards can be applied directly to future transactions or credited to a customer’s account, fostering long-term engagement.

Importance

  • Encourages Purchases: Drives higher conversions by offering monetary rewards.
  • Customer Retention: Builds loyalty and motivates repeat purchases.
  • Competitive Edge: Differentiates businesses by providing added value.
  • Improved AOV: Encourages customers to spend more to maximize rewards.

How It Works

  • Cashback Offer Announcement: Businesses advertise cashback promotions, specifying eligibility and conditions.
  • Purchase Tracking: When a customer completes a qualifying purchase, the system calculates the cashback reward.
  • Reward Allocation: Cashback is credited to the customer as store credit, gift cards, or a refund.
  • Redemption: Customers use their cashback reward for future purchases or withdraw it, depending on the store’s policy.

Benefits

  • Boosts Sales: Attracts price-sensitive customers and encourages impulse buys.
  • Enhances Loyalty: Keeps customers returning for additional rewards.
  • Increases Engagement: Creates excitement and motivates customers to explore more products.
  • Strengthens Brand Perception: Seen as a generous and customer-centric practice.

Top Shopify Apps for Cashback Programs:

Abandoned Cart Recovery
GiftKart

- Offers cashback rewards alongside digital gift cards.

- Provides seamless integration with Shopify stores for enhanced customer engagement.

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Webplanex: Cashback Wallet

- Automates cashback rewards to encourage repeat purchases.

- Allows custom rules for cashback amounts and usage.

Abandoned Cart Recovery
Rise.ai: Gift Cards & Loyalty

- Combines cashback with loyalty rewards to strengthen customer relationships.

- Supports gift card issuance for cashback amounts.