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The Cashback
Conundrum
Going back a few years, e-commerce websites struggled to make shoppers
pay online, as most of us loved to pay cash on delivery. Evidently, the
demonetization event in 2016 gave the market an incremental push.
Consumers are more comfortable paying online; start-ups like Paytm
have undeniably contributed to that. You don’t need to carry a card
everywhere to make a cashless payment. Small shopkeepers are glad to
receive a payment through mobile wallets and customers are happy to get
a cashback on their purchase.
Going back a few years, e-commerce websites struggled to make
shoppers pay online, as most of us loved to pay cash on delivery.
Evidently, the demonetization event in 2016 gave the market an
incremental push. Consumers are more comfortable paying online;
start-ups like Paytm have undeniably contributed to that. You don’t need
to carry a card everywhere to make a cashless payment. Small
shopkeepers are glad to receive a payment through mobile wallets and
customers are happy to get a cashback on their purchase.
E-commerce websites pamper
consumers like you and me, with huge
discounts and festive sales year after
year. Now you may wonder why so
much cash is given back to the
consumer and what are the ways with
which you can you earn when you
shop. Let’s look into some key factors
at play.
SUBVENTION
Subvention is nothing but rolling out money for a purpose. Heavy discounts &
cash rewards are generally given by keeping a set amount of money to be
rolled out as cashback or discounts. Flipkart is one of the top shopping
websites in the country. They give their customers Flipkart Cashback rewards
when transacting with major credit or debit cards. Assuming that the cash
reward is 10% of the price, the retailer & the bank split & finance your cash
reward. They roll out money to generate more business.
Some websites like Paytm & Amazon have their own online wallets, which the
customers can use to make a transaction, in such cases; online retailers don’t
have to share a cut with the bank. This gives them control over the amount of
cash reward they want to disperse.
CUSTOMER LOYALTY
Giving out deals & cash
rewards helps retailers &
banks achieve their quota
of sales, & give them a
foothold to stay relevant in
the competitive
marketplace. The main purpose is to buy customer loyalty & customer
retention. However, the current market in the country is rampant with
deals & discounts. With such a commercial environment we tend to act like
kids, our attention moves from one discount to the next. Now how can we
save more on our shopping, you might wonder; which brings us to the how.
ONSITE CASH REWARDS
Onsite cash rewards.
You can connect your Paytm wallet with
most other apps to make a payment and
get cash rewards. For example, Uber’s
newly launched service Ubereats lets
you make a payment through Paytm for
food deliveries. Amazon has launched its
online wallet called Amazon pay & you
get you get an instant 15% cashback
when you transact through it. Online
offers keep changing with the wind so
it’s better to be on the lookout for money
saving deals.
THIRD PARTY CASH REWARDS
Amazon is said to have widely popularized
affiliate marketing, where a third party
website or app can drive sales to an online
retailer and in turn, take a cut of the sale. A
lot of popular websites like cashkaro.com,
xerve.in & are tied up with Amazon &
Flipkart. These affiliate marketers share a
cut of their profit with their customers to
again achieve customer loyalty & sales.
This cycle of spending and earning rewards is what drives maximum sales to the retailers
with the help of financiers like the banks. The customer is happy that he got a discount;
meanwhile, the retailer enjoys a higher number of sales.