American consumers seeking help fighting the rising cost of inflation can turn to rewards programs that offer cashback rewards to make the most of their purchases.
Inflation is a burning issue with shoppers right now. The latest U.S. Consumer Price Index for All Urban Consumers showed expenses reaching a 39-year high; up 6.8% in December 2021 when compared to a year earlier. As a result, the average U.S. household now spends an extra $276 per month on goods and services because of price increases, according to Moody’s Analytics Inc.
The fiscal news will not improve any time soon either. A Gallup poll released in January 2022 found nearly 80% of Americans expect inflation to increase over the next six months. Plus, two-thirds of U.S. consumers do not expect their personal finances to improve in 2022, with slightly more than half of this group citing inflation as the barrier to a better financial situation, according to a recent report on Financial Security Index.
Recommended: GBank Financial Holdings Appoints New Chief Information & Technology Officer
The retail industry and financial services ecosystem can win over more loyal customers, and at the same time can help consumers squeeze more out of their spending dollars by delivering cashback rewards programs.
The Popular Cashback Option
Consumers receive rewards in many ways as part of loyalty incentive programs. They can earn airline miles, hotel or timeshare credits, cryptocurrency prizes, gift cards, or discounts at specific retail chains and rental car companies.
However, receiving cashback is the most popular consumer reward. More than 41% of U.S. adults listed cashback as their favorite credit card feature, according to a December 2021 survey.
The next most-preferred features did not even come close to the overwhelming approval of cashback rewards, which was three times more popular than the second most-preferred feature, wide acceptance.
Nowadays, cashback rewards, offered either direct to the consumer or through discount vouchers, come from a wider range of businesses beyond credit cards. People struggling with costs because of inflation can benefit from cashback rewards, coupons, offerings, promotions, and loyalty programs through a number of different online venues.
Modern rewards program incentives, delivered conveniently and easily through digital rewards programs, work both with today’s ubiquitous mobile devices as well as desktop/laptop computers to help consumers save on purchases and to help retailers build brand loyalty.
Cash incentive awards come in many forms, with one of the most popular being cashback on e-commerce purchases. Some popular cashback apps offering consumers direct cashback payments on their e-commerce purchases include Capital One Shopping, Rakuten, and Ibotta.
Latest Banking News: Telcoin Now Connects Any US Bank Account to DeFi Trading in Updated Mobile App
Creative Uses of Cashback Rewards
Alternatively, other companies offer consumers a way to creatively use the cashback they earn on purchases. For example, rather than earning a direct cashback payment, some companies offer customers the ability to turn their cashback into other currencies, rewards, or even investments. Take these companies’ approach to cashback rewards, for example:
- UPromise and RaiseMe both enable consumers to apply their funds towards college expenses.
- Microsoft Rewards helps customers earn rewards by searching with Bing, using the Microsoft Launcher or Microsoft Edge, or buying items from the Microsoft Store online and in Windows 10. Accumulated points lead to rewards including gift cards, sweepstakes, and donations to charity.
- Lolli allows customers to earn cash back for shopping online, which they can convert to Bitcoin.
Partnering for Rewards
As consumers face rising costs on everything from groceries to gas to new and used cars, white-label rewards and cashback platforms can help many different types of businesses create more value for their customers by offering rewards for shopping.
These types of rewards don’t just benefit the consumer. They can also provide brands with new opportunities to create more devoted fans by giving customers something to sweeten the shopping experience, especially during inflationary times.
Financial institutions, for example, that leverage white-label cashback rewards platforms can seamlessly and easily connect account holders to cashback rewards, discounts, and coupons. These programs can help the FIs stay relevant with their customer base by offering customers ways to make their money go further when shopping online.
Recommended Fintech Insights: Global Fintech Interview with Sudhir Jha, Mastercard SVP and Head at Brighterion
With prices showing no sign of coming down, smart companies with a variety of business models and consumer engagement strategies can take advantage of the current customer appetite for cashback rewards by implementing rewards programs of their own. These types of programs can build customer loyalty, plus help their customers stretch their dollars in today’s challenging times.
[To share your insights with us, please write to sghosh@martechseries.com]
