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The Illusion of Cashback

The Illusion of Cashback

According to TDI researching (a group of advertising companies) the popularity of cashback is increasing. If a bank has promised to return some of the spent money to a consumer, they spend much more. Is there any real benefit?A consumer who

has a card with  cashback spends three times more and more thoughtlessly than someone who pays cash or with a regular card. In addition, the owner of a card with cashback spends 20-30% more than planned. All these are conclusions of TDI.

According to the research, the popularity of cashback has doubled since the beginning of 2018. More than 17 million people are already using cashback cards in Russia: a consequence of the desire to save money on the back of higher prices, but in fact, it turns out exactly the opposite.

The growth of offers on cards with cashback and bonuses is an attempt of banks to regain customers. Due to financial instability and currency fluctuations, many customers began to switch to cash and withdraw money from bank accounts.

However, it is worth noting that wealthy and financially literate people often own cards with a large cashback. They spend more - and really save on it. 

Thus, well-off people get real benefits from cashback. Otherwise, thepresence of cashback is just an illusion