What does Cashback do?

mjavi

I've just used my debit card and stores ask me if i want cashback (and how many percent)? I'm new to the concept and its been a bit difficult finding with an explanation of how it works.

How does it work anyway? Can anyone give me sample scenarios? Thanks!

tenifan

mjavi wrote: »

I've just used my debit card and stores ask me if i want cashback (and how many percent)? I'm new to the concept and its been a bit difficult finding with an explanation of how it works.

How does it work anyway? Can anyone give me sample scenarios? Thanks!

They're probably not asking you how many percent.

Just say you were in Tesco and your groceries came to €18. The cashier might ask "do you want cashback".. cashback is the same as making a withdrawal from the ATM or the bank. If you take €20 cashback, the cashier will hand you €20.

When you check your bank statement, you will see €38 has been taken from your account. €18 for your groceries, and €20 cash.

The advantage for you is not having to queue up at the ATM, and also it only counts as one transaction so you might save on bank fees.

Cash back is particularly useful in pubs in Ireland where you usually pay cash. You can get cashback at the beginning of the night and then just blow through the wad of cash throughout the night.
Many retailers require a purchase in order to give you cash back. They may also limit the amount of cash back they will give out, and often will not let you get odd amounts (multiples of €10 only)

mjavi

So apart from your payment, stores with that cashback offer can 'withdraw' on your behalf without the bank fees? No harm if I said no right? How much is the cashback limit?

tenifan

mjavi wrote: »

So apart from your payment, stores with that cashback offer can 'withdraw' on your behalf without the bank fees? No harm if I said no right? How much is the cashback limit?

Yes, it's just a withdrawal.
No, you don't have to use cashback. (not all stores offer it, but the ones who do often ask you do you want it)
The limit is determined by the store. Many stores will not want to give out €100 if you just popped in to buy chewing gum. However, banks allow stores to give out up to €100

BazzaDP

tenifan wrote: »

However, banks allow stores to give out up to €100

How do banks limit this? The store yes but not the bank. As I understand it, it's just a debit transaction to the bank. The store is just charging you more for your goods than they cost and then giving you your change back. Or is there a special "cashback" type of transaction the stores have to use for this?

Fred Swanson

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coylemj

Fred Swanson wrote: »

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+1 it seems to be a symptom of increased use of debit cards these days that a lot of coffee shops and the like don't offer cashback at all.

The attraction that cashback has for places like pubs is that they get rid of cash so they're less likely to be robbed at closing time when the cash register would otherwise be bulging with cash.

Spocker

BazzaDP wrote: »

How do banks limit this? The store yes but not the bank. As I understand it, it's just a debit transaction to the bank. The store is just charging you more for your goods than they cost and then giving you your change back. Or is there a special "cashback" type of transaction the stores have to use for this?

The cashback is listed/processed as a separate line item/transaction on the receipt. In my local Super Valu I have to sign/initial the amount of cashback I'm receiving.

Fred Swanson

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tenifan

BazzaDP wrote: »

How do banks limit this?

I was going by ulster bank. they seem to limit at 100. other banks may give higher.

Spocker wrote: »

The cashback is listed/processed as a separate line item/transaction on the receipt.

i dont think that;s standard, as any cashback i got was on the same line

BazzaDP

Spocker wrote: »

The cashback is listed/processed as a separate line item/transaction on the receipt. In my local Super Valu I have to sign/initial the amount of cashback I'm receiving.

On your till receipt yes. Not on you'd bank statement. Of course the retailer needs to know how much you really spent. I'm just saying the bank doesn't know (hence why you are charged just one fee).

Again in much the same way that, in a pure cash transaction, your till receipt states how much money you gave and how much change you received (e.g. €6 worth of good purchased, €10 payment received, €4 change returned).

And the signature thing is just a method to stop you coming back later and claiming "hey you forgot to give me my cash back notes" when you did get it - because either you forgot you got it or because you're a crook. They make you sign your initials as you receive the cash. No signature, indicates no cash was probably given. Again that's down to store policy and some stores don't bother and go with the "once you've left the till area, if you forgot your cash back - tough" policy.

CramCycle

Fred Swanson wrote: »

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I used to do that for convenience. My understanding, in the past, was that the customer would be charged a cash back fee, is this no longer the case?

GerardKeating

Fred Swanson wrote: »

Many places bypass that by simply adding the 2 amounts together and process it as a standard sale.

Very bad idea, then the cash back would appear as part of the sales/turnover for the store and then they pay tax on this, even include it for VAT returns.

tenifan

GerardKeating wrote: »

Very bad idea, then the cash back would appear as part of the sales/turnover for the store and then they pay tax on this, even include it for VAT returns.

Someone had better tell Tesco :rolleyes:

CramCycle

GerardKeating wrote: »

Very bad idea, then the cash back would appear as part of the sales/turnover for the store and then they pay tax on this, even include it for VAT returns.

Stores use their tills not their credit card receipts to calculate this.

chris85

GerardKeating wrote: »

Very bad idea, then the cash back would appear as part of the sales/turnover for the store and then they pay tax on this, even include it for VAT returns.

VAT would never be done on single receipt items as mentioned. So many items are on different VAT rates (food, alcohol, clothing, cigarettes). Easy enough for them to have a receipt item for cash back which is included in final sale.

seamus

coylemj wrote: »

+1 it seems to be a symptom of increased use of debit cards these days that a lot of coffee shops and the like don't offer cashback at all.

In a shop that tends to deal with small sums, like a coffee shop, someone coming in and asking for €100 cashback will take a lot of big notes out of your till and make it hard to give decent change. Particularly in busy places, two people coming in a row spending €10 and taking €100 cashback could clean out your float.

The attraction that cashback has for places like pubs is that they get rid of cash so they're less likely to be robbed at closing time when the cash register would otherwise be bulging with cash.

There's also the fact that someone tends to ask for cashback in a pub because they have no cash. If you don't offer cashback, then they're going to be paying with the card all night, slowing down your staff and incurring transaction fees for you. Give them cashback and they'll use that cash to pay for the rest of their drinks.

CramCycle wrote: »

I used to do that for convenience. My understanding, in the past, was that the customer would be charged a cash back fee, is this no longer the case?

I don't recall that ever happening? I worked on a till as far back as 1998 and there were no fees for cashback then?

BazzaDP wrote: »

some stores don't bother and go with the "once you've left the till area, if you forgot your cash back - tough" policy.

Well, you can't really do that. If the customer asked for cashback, you owe them their cash, you can't just keep it.

However most retailers, particularly if they're busy, will tell a customer to come back at the end of the day when the shop is closing - if the cashback wasn't given, the till count will reflect this. Otherwise you have to close a till in the middle of the day and cash up before you can give the customer back their money.

CramCycle

seamus wrote: »

I don't recall that ever happening? I worked on a till as far back as 1998 and there were no fees for cashback then?

The fee would not be on the proprietor and would not appear on the receipt, it would be an additional banking charge that would appear on the customers statement. Like I said, don't know if it is done anymore.

GerardKeating

tenifan wrote: »

Someone had better tell Tesco :rolleyes:

Any time I had gotten cashback in Tesco (or anywhere) it has always been itemised on the POS receipt.

tenifan

GerardKeating wrote: »

Any time I had gotten cashback in Tesco (or anywhere) it has always been itemised on the POS receipt.

nvmd

Delta2113

So next time I get a pint in my local they may give me €100 cashback. I was afraid to ask before and maybe thought I would have to get 2 pints because of the generally enforced €10 minimum spend.

Infact would you be really pushing your luck if you asked for a packet of crisps and €100 cashback.

I would be interested in publicans views on this.

km991148

Delta2113 wrote: »

So next time I get a pint in my local they may give me €100 cashback. I was afraid to ask before and maybe thought I would have to get 2 pints because of the generally enforced €10 minimum spend.

Infact would you be really pushing your luck if you asked for a packet of crisps and €100 cashback.

I would be interested in publicans views on this.

Well why would you?

In general they probably aren't that keen on using the card for under a tenner due to the charges they pay (hence normally a 10eur limit). If you were getting cash back its probably because you want to stay in the pub and need the cash to spend.. but if that's the case then why are you buying a packet of crisps? If you were only buying crisps it means you are probably looking for hte cash to go elsewhere therefore it isnt worth the incurring the card fees for you to spend the profit out of the shop..


ugh.. cant believe I spent the time replying to this!

3DataModem

Fred Swanson wrote: »

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Which is crazy, as the fees are higher.