Cash back

What is cash back?

Cash back is a rewards incentive where a customer earns back a portion of the money they spend on a purchase. It’s often offered as a percentage (like 5% cash back) and can be used toward future purchases, transferred as cash, or credited to an account.

It’s all about delivering value to customers after they make a purchase. Whether it’s a credit card perk or an ecommerce loyalty reward, cash back motivates spending by promising a small return, making customers feel rewarded for shopping.

How does cash back work in ecommerce?

Here’s how cash backs work:

• A shopper buys a product or service from an online store that offers a cash back reward.
• The store or a cash back partner like a rewards app or credit card company allocates a small percentage of the purchase amount to give back to the buyer, usually between 1% and 10%.
• The transaction is recorded, and the cash back amount is calculated based on the eligible total.
• After a set period, often post-return window, the cash back is credited to the customer’s wallet, account, or card.
• Once enough cash back is accumulated, the user may use it for future purchases, convert it to gift cards, or withdraw it as actual cash, depending on the platform’s policy.

It’s a win-win situation where customers save money, and stores drive loyalty

Example of cash back

A Shopify merchant offers a cash back deal, ‘Get 5% back on every subscription order.’ A customer who spends $50 monthly earns $2.50 in rewards they can apply next time, encouraging them to stay subscribed.

Driftcharge Tip

Offer cash back on recurring subscriptions. Many apps help you track and automate reward systems that bring customers back month after month.

Ganesh Pawar

• 

Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.