Friday, December 15, 2017

Cash back deals number one alternative to low-margin discounting

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Over half (51%) of shoppers have taken part in a cash back or trade-in sales promotion.

Cash back sales promotions are consumers‘ top alternative to price cuts, with one in four consumers (25%) saying a cash back offer was more likely to encourage them to buy a product than any other deal, according to a OnePoll survey of 2,000 consumers commissioned by Opia. This was just 12% fewer than the 37% most influenced by discounts.

Over half (51%) of those polled also confirmed they had taken part in a cash back promotion, the majority of whom (78%) were happy with the outcome.

“These results confirm that retailers don‘t need to chop their prices at the point of purchase, which ultimately erodes their margins,” said Steve Gales, sales director at the risk-managed sales promotion firm Opia. “Using the right promotional mechanisms, brands and retailers can roll out cash back offers to influence shoppers and give them a good deal for less than half the cost of a straightforward discount.”

The survey revealed that, when hunting for a deal, many shoppers will head straight to a retailer‘s website (59%) – many more than the 28% who look out for them in-store. Having taken part in a sales promotion, many consumers are also happy to share post-sale insight and feedback: 64% will give their name and contact information; 44% will opt-in for future news and promotions and 39% will share their likes and dislikes.

Despite not getting a discount at the point of sale, 83% of customers said they would be willing to wait up to a month or longer to claim money back from a cash back offer. 77% said it was preferable to receive it electronically direct to their account or via PayPal – typically the fastest and most cost-effective way to manage redemptions. Most consumers polled who were unhappy with cash back deals (21%) said it was because the money wasn‘t received fast enough (27%).

“Cash back and other types of promotions offer brands and retailers a viable alternative to discounting – at a time when most are facing fierce competition,” added Gales. “However, for consumers to fully get behind these offers, the promoters need to ensure that the whole experience is extremely slick and pain-free. Getting money back to those who claim within a short time-frame is more straightforward than many firms might anticipate: Using an advanced cash back platform, it is possible for a pay out to be delivered within 24 hours.”

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