How to Launch a Successful Cashback Reward Program: 2023 Guide

Aws Alnabulsi
May 14, 2023
11 min to read
Cashback Reward Program

Cashback reward programs are a popular customer loyalty technique among ecommerce businesses.

And as the online shopping landscape continues to thrive, more and more savvy entrepreneurs, business owners, and marketers are hopping on the cashback bandwagon to entice and retain their valuable clients.

But starting a successful cashback program is not as simple as it may seem. There are a lot of aspects to consider, from identifying the correct rewards to putting up a system for tracking and distributing them.

In this article, we’ll cover everything you need to know about this ecommerce trend. We’ll define what a cashback rewards program is, go over the benefits, and look at the steps it takes to start such a program for your ecommerce website.

Meanwhile, we’ll also show you how Core Loyalty can assist your business in launching a successful cashback reward program. Our AI-driven interactive tools can help you design and implement cashback loyalty programs that drive customer engagement and boost sales. Importantly, your program can be customized to the specific needs of your company and the exact expectations of your customers, for maximum customer loyalty and repeat purchases.

Table of Contents

  • What Is a Cashback Reward Program?
  • What Are the Benefits of a Cashback Loyalty Program?
  • 4 Best Cashback Rewards Program Examples
  • How to Launch a Cashback Reward Program in 6 Easy Steps
  • 8 Tips for Starting a Cashback Program for Your Ecommerce Business
  • Launching Your Cashback Reward Program Now

What Is a Cashback Reward Program?

What Is a Cashback Reward Program?

Cashback reward programs have become increasingly widespread among ecommerce businesses, but not everyone may be familiar with the concept.

What Is Cashback?

Cashback is a rewards system that gives customers a percentage of their purchase back in the form of cash or store credit.

The amount of cashback varies based on the merchant and the goods, but it normally ranges from 1% to 5% of the entire purchase price.

This concept has been around for decades but has gained popularity in recent years with the rise of online shopping.

A cashback reward program is a loyalty program offered to motivate customers to shop with a brand. Customers are encouraged to make repeat purchases and become loyal to the company with cashback rewards.

How Does Cashback Work?

When a customer participates in a cashback program, they receive a portion of their purchase price back. The goal is to encourage people to not only complete the order this time but also to come back to spend the newly available credit. This develops brand loyalty.

Here's how it normally works: a customer makes a purchase, and the merchant returns a percentage of the purchase price back to the buyer in the form of cash.

Cashback amounts range from 1% to 5% of the entire purchase price, depending on the store and the item. For example, if a consumer makes a purchase of $100 with a 5% cashback offer, they will receive $5 back in cash.

Cashback can be delivered in a variety of ways, including through credit card rewards, internet shopping portals, or dedicated cashback incentive programs.

Different guidelines and limitations, such as minimum purchase requirements or cap on cashback amounts, may apply to certain systems. Some programs may also include a points-based structure, where clients accumulate points for their purchases that may be redeemed for cashback benefits or other incentives.

What Is a Cashback Loyalty Program?

A cashback loyalty program incentivizes customers to make repeat purchases to use the cashback rewards. The program often offers a percentage of the purchase price back to the buyer in the form of cash or store credit.

The major benefits of a cashback loyalty program are improved customer loyalty and repeat purchases. Clients are motivated to shop with a specific brand over others and are more inclined to make repeat purchases when cashback offers are offered. This can lead to enhanced client lifetime value (CLV) and higher revenue for the business.

Cashback loyalty programs can also help businesses stand out in a crowded marketplace and attract new customers. Unique and valuable reward programs help businesses to differentiate themselves from competitors and appeal to customers who are looking for a good deal.

What Are the Benefits of a Cashback Loyalty Program?

What Are the Benefits of a Cashback Loyalty Program?

Businesses are adopting cashback loyalty programs more and more to motivate customer loyalty and boost sales. Such programs grant customers a percentage of the purchase price as either cash or store credit, serving as a concrete incentive for their loyalty.

Here are the 5 biggest advantages of starting a customer rewards program with a cashback component for your online store:

1. Improved consumer loyalty

People registered in loyalty programs are more likely to recommend a brand to others and be loyal to that brand. Customers have a concrete reason to stick with a specific company when they receive cashback rebates.

Customers who participate in loyalty programs frequently appreciate the benefits they get from a company. They wind up recommending the business to their friends and relatives. According to P2P Marketing, 73% of customers on your loyalty rewards program are more inclined to suggest your brand than other clients.

2. Boosted sales revenue

Loyalty programs can also help boost the frequency of purchases from customers. Cashback systems are particularly effective because customers get the feeling that they are getting something specific in return for shopping instead of some imaginary points or rewards.

Tada reports that 77% of loyal customers state that loyalty programs have increased their likelihood of making more regular purchases.

3. Increased customer basket size

Cashback loyalty programs can also help raise the basket size of clients. When you know that you will get a certain percentage of your purchase back, you are urged to spend more to get more back.

Customers in loyalty programs often spend 13% more money than non-participants, according to Tada.

4. Reduced marketing costs

Companies can reduce marketing expenses for acquiring new consumers when they keep existing clients. Loyal customers also tend to buy products or services at a greater value and boost the company's profit margin.

A 5% increase in customer loyalty can boost a business profitability by 75%, as reported by Business News Daily.

5. Higher brand advocacy

Customers who feel valued and given incentives or rewards through loyalty programs tend to become more loyal and form strong emotional relationships with brands.

Devoted customers have a tendency to tell their friends and family about the brands and goods they like. This helps with brand advocacy and promotion.

Based on SEMrush data, 90% of consumers say that recommending products to others is the most effective action in influencing purchasing decisions. This means that it’s worth considering building a referral program too as a natural extension of your cashback rewards program.

4 Best Cashback Rewards Program Examples

4 Best Cashback Rewards Program Examples

There is no greater sensation for a customer than spending and earning money simultaneously. And receiving a tiny sum back after each transaction is the very basis of a top cashback reward program. Indeed, many large businesses have taken advantage of the benefits which these programs offer to expand their customer base and boost their sales.

Here are 4 inspiring examples to consider:

1. Uber Visa Card

The Uber Visa cashback card offers cashback incentives for a variety of expenditures, including 4% cashback on eating, 3% on travel, and 2% on online purchases.

The cashback bonus program also gives $100 back after spending $500 in the first 90 days.

It has some of the best cashback card incentives that can be redeemed as statement credits, gift cards, or Uber credits.

2. Rakuten

Rakuten is an ecommerce platform that offers a cashback program to its consumers. Customers can earn up to 40% cashback on their purchases, and the program is free to join.

Rakuten collaborates with over 2,500 stores, including Amazon, Sephora, and Walmart, giving users a wide selection of possibilities to earn cashback.

3. Honey Gold

Honey Gold is a browser extension that helps customers find deals and discounts when shopping online.

The program offers cashback rewards for purchases made through the Honey platform, with rewards ranging from 1% to 20% cashback.

Customers can redeem their rewards for gift cards to popular stores like Amazon, Target, and Walmart.

4. Swagbucks

Swagbucks is a rewards program that gives cashback for buying at specific retailers, answering surveys, and viewing videos.

Swagbucks can be used for gift cards to over 100 different retailers and are available for customers to earn.

Since its launch in 2008, the program has gathered more than 20 million participants and distributed more than $400 million in incentives.

How to Launch a Cashback Reward Program in 6 Easy Steps

How to Launch a Cashback Reward Program

Customers receive a lot more alluring deals if cashback offers are included in a loyalty program. However, a loyalty cashback reward program launch must take extra preparation and investment in order to reap the expected benefits.

Following are the 6 steps that an ecommerce business needs to take to start a successful cashback program:

1. Define program objectives.

Determine the specific goals and objectives for your cashback reward program. Are you looking to increase customer retention, drive sales, or both? This will dictate the structure of your program.

2. Choose a cashback model.

Decide on the type of cashback model you want to use, such as a flat percentage of the purchase price or a tiered system based on spending levels. Both come with pros and cons, so you should decide what would work best for your specific type of customers.

3. Determine program eligibility.

Define the criteria for program eligibility, such as minimum purchase amounts or customer account status. Allowing more customers into your program might expand your membership base faster, but limiting the number of participants might make your program feel more exclusive and thus more desirable.

4. Choose a redemption method.

Decide how customers will be able to redeem their cashback rewards, whether it's in the form of store credit, cash, or other rewards.

5. Promote the program.

Develop an ecommerce marketing plan to promote the cashback reward program to customers. This could include email campaigns, social media ads, or in-store signage.

6. Measure your success.

Establish metrics for measuring the success of your cashback reward program, such as customer retention rates or increased sales, and regularly track and analyze the data.

8 Tips for Starting a Cashback Program for Your Ecommerce Business

If you're considering starting a cashback program for your ecommerce business, these 8 tips can help you create a successful loyalty program.

From choosing the right technology and program gamification to using data analytics and continuously improving, these tips can help you design and implement a cashback program that drives customer engagement and boosts sales.

1. Choose the right technology.

Use Core Loyalty to Start a Cashback Reward Program

Use a platform like Core Loyalty to manage and automate your cashback program, allowing you to easily track customer rewards and redeem points. Using AI-driven technology and analytics, our loyalty app allows you to continuously optimize the performance of your program based on your customers’ behavior and preferences.

Get started today!

2. Gamify the program.

Incorporate game-like elements into your cashback program, such as leveling up or unlocking rewards, to create a more engaging and gamifying customer experience.

3. Make it easy to understand.

Keep the program simple and straightforward, clearly communicating how customers can earn and redeem rewards.

4. Offer a variety of rewards

Provide customers with a range of reward options, including cashback, store credit, or discounts on future purchases.

5. Use data analytics.

Analyze customer data to understand their spending habits and preferences, allowing you to tailor rewards and promotions to their needs.

6. Set clear goals.

Define specific goals for your cashback program, such as increasing customer retention or boosting sales, and regularly evaluate your progress.

7. Promote the program.

Market your cashback program through email campaigns, social media ads, and targeted promotions to ensure maximum visibility and engagement.

8. Continuously improve.

Collect feedback from customers and regularly make improvements to your cashback program to better meet their needs and expectations. To achieve this, it’s important to collect all the possible data points mentioned above.

Launching Your Cashback Reward Program Now

Introducing a cashback program can be a powerful strategy for increasing customer loyalty and revenue for your company.

Businesses can promote repeat business and foster a sense of value for their clients when they give customers a portion of their purchase price back in the form of cash or shop credit.

When launching a cashback program, there are numerous elements to take into account, from selecting the appropriate technology to gamifying the program. With Core Loyalty, you can streamline the procedure and give clients a seamless and engaging experience while effortlessly managing and automating your cashback program.

Any ecommerce company can benefit from creating a successful cashback program if they use the correct strategy and resources.

Start your cashback rewards program with Core Loyalty today!


Launch your loyalty program in no time

Grow your e-commerce business with customer engagement










AI and Personalization






Daniela Andreevska

Daniela has 6 years of experience in digital marketing for ecommerce businesses.

Aws Alnabulsi

Aws is the Co-Founder of Coretava, a complete retail ecommerce growth platform. He has 6+ years of experience in managing and growing ecommerce businesses.

Launch your loyalty program in no time

© 2023 Coretava, All rights reserved

Privacy Policy