Cash Back

Cash back can refer to two different kinds of card transactions:

1) An option available to retail consumers when, during a debit card transaction, the customer can request to add an extra amount to the purchase price and receive the added amount in cash. Cash back using debit provides customers a convenient method of obtaining cash when purchasing goods and services without having to make a separate trip to an ATM or bank.

2) A cardholder benefit offered by some credit card companies that pays the cardholder a small percentage of their net expenditures (purchases less refunds). Cash back benefits often provide the cardholder with the opportunity to choose from taking the cash, or using the "points" for purchases, travel (as with miles awards for air travel) or gift cards. Typically, cardholders must reach a certain points level to redeem for cash or other benefits. Some credit cards offer varying levels of cash back depending on the purchase. For example, a cardholder might earn 5% back on gas purchases, 2% on groceries and 1%on all other purchases.

1) An example of debit cash back as a convenience: a customer has to purchase groceries and take cash out of their bank. Rather than make two trips to the store and to an ATM, they buy their groceries with a debit card (which totals to $45), and ask for $20 in cash back. The $20 is added to the transaction, making it total $65, and is given $20 in physical cash from the till.

2) Cash back and merchandise or travel bonuses are offered by credit card companies as a means of attracting new customers, and keeping old customers. Often, the APR for cards with this benefit is higher than for those cards that do not offer a cash back incentive. As a result, these cards are usually more beneficial to card members who are able to pay balances off in full each month; otherwise, the interest and fees could outweigh the cash back benefit. While some credit card companies allow the cardholder to "withdraw" the cash or redeem the points at any time as long as a certain threshold has been met, other cards will issue cash back award checks one a year.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Cash Back — Le terme Cash Back (parfois écrit en un seul mot cashback) a été introduit dans les années 1970 aux Etats Unis. Le cashback était initialement un système permettant aux porteurs de certaines cartes bancaires de paiement de recevoir fin décembre… …   Wikipédia en Français

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  • Cash-back — Als Kick back wird die Rückerstattung eines Teils des gezahlten Betrages eines Geschäftes zwischen mehreren Beteiligten durch einen Beteiligten an einen anderen bezeichnet. Typischerweise wird der Kick back nicht öffentlich gemacht. Es kann sich… …   Deutsch Wikipedia

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  • cash-back — noun the retail facility whereby a customer may withdraw an amount of cash when making a purchase with a credit card or debit card, the amount being added to the bill …   Wiktionary

  • cash-back — adj. denoting a form of incentive offered to buyers of certain products whereby they receive a cash refund after making their purchase …   Useful english dictionary

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  • Cash Flow — 1. A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities financing, operations or investing although this also occurs as a result of donations or gifts in the case of… …   Investment dictionary

  • Cash for Honours — (also Cash for Peerages, Loans for Honours or Loans for Peerages) is the name given by some in the media to a political scandal in the United Kingdom in 2006 and 2007 concerning the connection between political donations and the award of life… …   Wikipedia

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