Reasons Why Psychology Confirms that Cashback is King

Rewards, discounts, and cash-backs have always been powerful motivating factors. There is nothing like a “great deal” to convince a customer to buy a product immediately. While each kind of reward has its allure, cash-backs are considered the best of all. 

Cash backs are now a part of almost every UPI transaction app. Be it PayTM and GPay or Fave and PhonePe, you can get the cashback credited to your account after completing a transaction. UPI payment apps are offering various discounts and cash backs to promote cashless transactions. The use of online payment methods has increased due to convenience and the allure of cash-backs. 

What makes cash backs so popular among the customers? Let’s find out! 

• Cashback is Tangible

Cashback is just what it claims to be. The customer gets back a percentage of the amount they spent during the transaction. It is a tangible entity and will reflect in their bank account or mobile wallet. The customer can see a new credit entry in the transaction list. 

• Cashback is Earning

Well, discounts are saving, and cash backs are earning. See how it works? When customers get a discount on a product/ service, they consider it a form of saving. When the customers get cashback in return, it feels like earning. That’s the psychological aspect of crediting money back to the customers’ accounts after the transaction is complete. 

• Cashback is Immediate

Cashback is usually credited soon after the transaction is complete. The Fave app provides immediate credit of the cashback. Companies say they need around 72 hours to credit the cashback. However, it takes them less than 12 hours most of the time. Customers don’t need to wait to earn back a portion of their spending. 

• The Surprise Factor

Even though customers know they will earn back some of their spendings, it is still a pleasant surprise. Imagine being notified of a credit to the bank account or e-wallet? Is it not exciting? This excitement encourages customers to buy more. It creates a positive impact on the customer and inspires brand loyalty. 

• The Emotional Factor

People are emotional. This is the universal truth and one that helps businesses plan their marketing strategy. Not everyone enjoys spending money. But a business can convince customers to part with their money by offering rewards like cashback. The emotional factor of cashback is the sense of getting back some of what they spent. It feels like an achievement to earn money when they just spent it. This feel-good factor brings more customers to the business. 

• User-Friendliness

Cash backs are user-friendly. As in, there’s no need to perform a series of actions to avail of the cashback. Any successful transaction that fulfils the eligibility criteria for the cashback offer will be automatically considered. The money will be transferred directly to the e-wallet or customers’ accounts. It is simple and hassle-free. 

Cashback is the king of rewards and will continue to be. It creates a win-win situation for merchants, UPI platforms, and customers.