Loyalty program cashback

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CashBack Rewards Systems were introduced in 1994 in the United States as soon as e-commerce became an alternative to traditional shopping. Imitating the Frequent Flyer reward programmes used by many airlines around the world, a cashback rewards systems works by rewarding the customer for purchasing from a particular company. Rewards may either literally be a "cashback" in the form of a discount, or they may be given as vouchers towards the next purchase or as points that can be redeemed for items once enough have been accumulated. Web merchants use rewards systems as a means of retaining customer loyalty.

The early ages

From 1994 to 1999, webmerchants would give away points that could be redeemed as gift certificates or transformed into rebates in order to buy more products.

As thoses processes were difficult to manage by the merchants, third party websites appeared, providing merchants with safe outsourced reward system against a small percentage of the money managed.

The systems developed by e.g. Mypoints.com Ebates.com CashbackToYou.co.uk would offer rebates when you were shopping at a large number of webmerchants.

Although consumers would find points interesting, they were more and more interested by being rewarded directly with cash.

Most cash-back systems like [Mr. Rebates] often utilize major third-party affiliate providers like [CJ] or [Linkshare]. These types of third party affiliate providers automate all the tracking that is needed for cash-back systems to work properly.

At the end of 1999, the points big companies started restructuring, with Mypoints and Cybergold merging and becoming more direct marketing structures than traditional points managers. Beenz.com, another popular points manager, sold its business to Carlson Marketing of Minneapolis, WI in 2002.

Meanwhile, new cash oriented Business models appeared, with systems like Stockback, promising to offer customers shares of a fund. Unfortunately, with all world’s stock exchanges plunging by mid 2000, this idea did not provide customer satisfaction as expected.

Cashback systems today

A new generation of cashback systems appeared in 2000 with systems like Upromise that helped customers save for their children's college, or like Babymint that helped customers save for their retirement. These programs are very popular and have attracted millions of members.

Today, lots of cashback systems are appearing in Europe, with companies like [CashCash] or Ebuyclub.com offering cashback rewards for Internet shoppers at hundreds of merchants. Within three minutes you can subscribe to the service and use it as often as you like. Cashback can be credited to your bank account upon request.

With many online mainstream stores offering cashback incentives to their customers, more lucrative online industries like the Adult and online Gaming are testing these marketing strategies. [Adult Cashback] site nookieREWARDS have started to offer Cashback incentives to members. Rakeback programs like Poker Rake Refund also offer members cashback incentives.

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