In such a competitive market, it’s a constant challenge to come up with new ways to keep customers coming back. We know the struggle all too well, but have you ever considered running a cashback promotion? It’s simple but smart: customers get a reward after buying from your store, giving them a solid reason to return.
In this guide, we’ll break down exactly how cashback promotions work, how you can use them in your WooCommerce store, and what to consider before launching one of your own.
Ready to explore? Here’s what you need to know!
What Is A Cashback Promotion?
Cashback promotions work differently than traditional discounts. Instead of granting a discount right away, this promotion offers a reward after a shopper completes a purchase, usually in the form of store credit or a fixed amount they can use on their next order.
Brands across industries use cashback promotions to encourage repeat orders and build loyalty. PayPal, for example, offers cashback rewards of up to 5% when users check out using their PayPal cards.
WooCommerce store owners can apply the same concept in their store with the help of plugins like Advanced Coupons. This powerful tool allows you to easily set up cashback coupons that reward shoppers with store credits after a successful purchase.
How Does A Cashback Promotion Work?
Understanding how cashback promotions work can help determine if it’s a right fit for your business. It’s pretty straightforward, typically following this process:
- Set up and offer: Most of the store owners we’ve worked with use tools like Advanced Coupons to create a cashback coupon offer. Once live, the promotion is communicated through marketing channels like email, social media, and push notifications.
- Order: Customers shop as usual, placing a purchase on your website. To ensure customers don’t miss the offer, we recommend enabling auto-apply coupons. This handy feature of Advanced Coupons automatically applies the cashback offer (or discount) in a customer’s cart when set cart conditions are met.
- Tracking: Once the order is processed and marked as completed (usually after shipping or fulfillment), the cashback is triggered.
- Reward: After the set waiting period window has passed, the customer receives their reward, usually as a store credit or a fixed cash amount.
- Return: The store credit reward encourages shoppers to return and purchase again, increasing repeat purchases in your store.
One of the advantages of offering cashback promotions is that they’re flexible–while this is how the process typically works, you can customize this flow to meet your store’s needs!
For instance, using Advanced Coupons, you can:
- Set a waiting period before the cashback rewards are granted (handy for handling delays or returns!)
- Choose between a percentage-based or fixed cashback amount
- Decide who qualifies based on their cart conditions, customer order history, or user role
If you want to start offering cashback coupons in WooCommerce, check out our full guide here!
Common Examples Of Cashback Promotions
From our experience working with WooCommerce owners, we’ve seen several types of cashback promotions implemented to support different business goals. Some store owners use cashback offers to improve their loyalty programs, while others use it to boost seasonal sales.
Here are four popular types of cashback offers you can implement:
1. Storewide percentage cashback offers
In this type of cashback, shoppers earn a percentage of their total order back as cashback. It’s simple and straightforward, as it applies to everything in your store. For example, you can run something like: “Get 10% cashback on all orders this week!” It’s a great way to incentivize buyers without offering steep upfront discounts.
2. Cashback with minimum spend
We recommend running this cashback promotion if you want to increase your store’s average order values. In this setup, you only grant cashback rewards if the order total reaches a certain amount (such as $50 or $100). Here’s a quick example: “Spend $75 and get $10 cashback!”
🎯 POWER TIP: Advanced Coupons make this easy to set up using cart conditions. With this plugin, you can set a required cart subtotal before a cashback coupon applies, encouraging customers to add more to their carts.
3. Cashback via membership or VIP clubs
This approach will work really well if you already have a running loyalty program and want to introduce a new perk to reward your best customers. It’s also a great addition to encourage shoppers to join your rewards system.
Take the beauty brand Sephora, for example. They offer a Beauty Insider loyalty program, and members who also sign up for the Sephora Credit Card can earn up to 8% back on purchases:
It’s a layered system that rewards both spending and loyalty, where shoppers feel like they’re getting more value the more they shop!
4. Seasonal/Event-based cashback
You don’t have to run cashback promotions all the time. In fact, as we’ve observed, adding an element of “scarcity” can boost urgency and shopper engagement. To make your deals feel more exclusive, consider running cashback promotions only on certain events and big sale periods.
For instance, you can offer 10% cashback on all purchases made during your store’s anniversary week, or offer bonus cashback during Black Friday.
With Advanced Coupons, you can schedule cashback coupons in advance and automatically end them after the campaign ends. Seasonal cashback campaigns are also a great way to test the waters without committing to a long-term program.
Key Considerations Before Launching A Cashback Promotion
Cashback promotions can be a powerful driver of customer engagement and loyalty, but they still need a bit of planning. If you jump in without a clear plan, you might end up giving away too much or confusing your customers.
Below, we’ve compiled a few things to think about before you launch:
1. Define your business goals
This is the crucial first step for any campaign you run. Get clear on why you want to offer cashback. Are you trying to re-engage customers, bring new shoppers to your store, or improve order values? The answer will guide the entire setup of your promotion. For example, if you’re aiming to increase cart order values, you could offer cashback only after customers hit a spending threshold.
2. Understand your profit margins and ROI
Cashback may not be as “instant” as a discount, but it’s still giving back to the customer–so it’s important to know what you can afford to give without impacting your bottom line.
Assess your current average order values, costs (like shipping and product costs), and return rates. From there, choose an amount that feels generous to your customers without hurting your bottom line.
3. Choose the right type of cashback
As we’ve discovered, cashback can be offered in different ways:
- A fixed amount (like $5)
- A percentage of the total order (like 10%)
- Extra rewards for VIPs or during seasonal events
The type of cashback offer you run will impact how shoppers perceive your promotion. If your store enjoys high average order values, a percentage-based reward might feel more exciting for your customers. However, if you’re trying to move specific products, a fixed-amount cashback tied to those items can do the trick!
Advanced Coupons makes this pretty flexible, allowing you to offer either a fixed or percentage cashback coupon for specific items, events, or user roles.
4. Set a reasonable waiting period
Setting a cashback waiting period gives you time to make sure the order goes through smoothly before crediting the reward. This gives you time to manage shipping, returns, and cancellations. It also helps prevent misuse (like customers canceling or returning just to get the cashback).
Most stores we’ve worked with set a waiting period of 7 to 14 days. With Advanced Coupons, it’s easy to set this up in the coupon settings:
5. Promote the cashback offer
This might seem obvious, but it’s worth saying: make sure your customers know about your offer! Spread the word out using your usual channels–email, product pages, website banners, and social media.
If you haven’t tried using push notifications yet, this could be a great time to start. These notifications pop directly into shoppers’ devices, ensuring they don’t miss your offer announcement.
🎯 BONUS TIP: If you’re using Advanced Coupons, you can take advantage of our integration with PushEngage to send coupons as push notifications. It’s a smart way to reach your shoppers where they’re most active—and make sure they never miss a great offer.
Learn more about this feature here. 👉
Frequently Asked Questions
What is cashback in marketing?
Cashback is a form of marketing promotion that offers shoppers a reward after they complete an order. The reward can be in the form of store credit, a cash refund, or a special coupon for their next purchase. It’s a great way to encourage customers to come back.
How does a cashback offer work?
Cashback offers rewards (such as store credit) to customers after a successful order. Some brands give the reward right upon checkout, while other store owners set a waiting period before granting the store credit reward.
If you’re using WooCommerce, this can be set up using cashback coupons with a plugin like Advanced Coupons. This tool lets you set up how many store credits to give, when to issue them (waiting period), and who qualifies (using cart conditions).
Why do businesses offer cashback?
Business owners use cashback to build customer loyalty, increase average order values, and encourage repeat orders. It’s a flexible strategy you can try to support different business goals. For example, some stores offer cashback during events and big shopping events to boost activity, while others use it as an extra incentive to reward loyal customers.
Conclusion
Running a cashback promotion is a great way to keep customers coming back to your store. If you’re looking for new ways to build customer loyalty and give your sales a boost, this is a strategy worth trying. In this comprehensive guide, we walked you through:
- What a cashback promotion is
- How a cashback promotion works
- Examples of cashback promotions you can run
- Key considerations before launching your cashback offer
We hope this guide helped you out! If you’re a WooCommerce store owner looking to launch your first cashback offer, check out Advanced Coupons. This powerful plugin extends the default coupon features of WooCommerce, letting you offer cashback coupons, BOGO deals, shipping discounts, and more.
Let us know if you have any questions!
