NeilT

A (quite boring) question for you...

So you go into the your local Tescos and pay for your weekly shopping and they ask you ' do you want cash back?' 'Ok £20'. You initial the cash back receipt and off you go.

So, when payment card providers charge a subsidy for the use of their system (i.e. VISA), even a very small % costs the Supermarket money. So, for example, that £20 has actually cost the supermarket £20.10

You're not going to spend that £20 with them (you've just paid for your shopping), so no benefit there.

So exactly how does a supermarket (or any store) benefit from offering cashback? Is it simply to show an increase in turnover to keep the shareholders happy, or is something else present in the equation that I'm missing?

Anyone know?

Neil

DCI Gene Hunt

Its a loss leader service designed to offer that 'something extra' to encourage shoppers to use their store...

cookstar

iTrader: (6)

You have to buy something in the store to use the facility, making their money and some back straight away

gazza-uk

you also bank their cash so they don't need to bank it and save them money that way...

NeilT

Maybe, but as most supermarkets have cash machines outside anyway, so surely a fairly pointless one. I wonder what the figures show on the amount of extra customers gained versus money lost on cashback

For me at least, the ability to receive cashback doesnt even enter into the equation when choosing where to send the wife once a week

BlkKnight

Purely down to the cost of handling cash.

As you can only do it on debit cards - they are not usually charged a % by the banks but rather a flat fee. So from that point of view, they don't mind.

DCI Gene Hunt

Wimmins are lazy beasts though, so the benefit of not having to walk an extra 40 feet to use an outside cash machine will be a big draw

New_scooby_04

iTrader: (4)

Hark, do I hear the sound of rolling pins?

David Lock

Don't know the exact figures, which will vary anyway, but it will be cheaper for the superstore if customers pay by direct debit card say 30p per transaction charge rather than say 1% so offering cashback encourages this and doesn't cost the store any more money. dl

fivetide

iTrader: (1)

Correct answer. They are charged a flat fee by the banks for payment so the amount makes no difference, however they are charged for the amoutn of cash they bank so getting as much of it as possible out of the door in your pocket does save them money. They don't do anything that isn't designed to make more wedge or stop them losing it!

5t.

kingofturds

iTrader: (1)

They save money handling and banking the cash. The manager at tesco said he would prefer everyone to take cash back as all those securior vans cost money.

oldsplice

Actually, DCI, you could be right there.........blokes as well, mind. The amount of times we get asked after the transaction if they can have cash back, and we tell them there's a machine just outside, they always say 'Oh, no, it's ok, I won't bother' It's just outside the door ffs!

Lee247

Like this one

Aimed at DCI

Leslie

Its the rattling of the chains actually.

Les

Luminous

iTrader: (3)

But your not scary

daddyscoob

they would like us all to pay with plastic as cash is a pain inthe **** for them and bad people try to steal it just to add to the handling problems. I'm sure some people take cash out of the bank go shopping and pass it across. Why they don't just pay by card is be yond me

Sonic'

A lot of cash points charge the end user £1.75 to withdraw cash, cashback in the store costs the store not the end user

So its not just a case of saving having to walk 40 feet extra

The only thing about getting cash back is that they always make you initial the cashback amount, god knows why though

Lisawrx

iTrader: (1)

I think they get you to initial the cashback amount to prove they have actaully given you the money.