Vow to improve the way “cashback” works.

The global cashback industry is estimated to be worth at least $100 billion per annum.

The industry has grown massively over the past six years, with more and more customers flocking to it. Being rewarded in “cash” or “cash equivalent” makes intuitive sense to consumers who find it easier to understand the value of their reward than they do a point’s based equivalent. Bond Loyalty, an industry leading loyalty research company, reported that “81% of consumers prefer cashback over points.”

We see cashback promotions driving sales every day for retailers across the world, whether through cashback websites or through car showrooms offering $100 cashback for buying a car.

A survey conducted by Retailmenot states that: “One-third of consumers will consider shopping at a new store if provided with a cashback offer. 20% said they purchased or spent more than intended due to a cashback offer within the past 12 months. Retailers experienced 3.4 times increase in conversions with cashback offers and their average order value increased by 46%.”

Evidently, customers always look forward to getting their hands-on cash and spending it again. This is also a huge sales driver for retailers. However, “cashback” is not without its problems. Unlike points, cashback is not instant – consumers need to spend money, wait for the cashback to be tracked, paid, and delivered. For context, some schemes and merchants pay 60 to 90 days later.

In the cashback model, a centralized party is always in the picture acting as the custodian of consumers’ promised cashback. This approach means that the cashback industry, and the constantly growing liability associated with it, has the potential to become a regulated industry in and of itself.

Some of the largest cashback operations in the world are trading at a loss. The danger this situation presents – millions of consumers losing tens of millions of dollars’ worth of cash rewards – warrants close attention.

The envisaged Vow model of cashback eliminates these shortcomings. In the Vow model, consumer’s vcurrency is held in consumers own wallets, which are inaccessible to any other party asides from the consumers themselves.

In this simple manner, cashback can be made safer and more transparent for all. And did I mention, 80% cheaper for merchants?

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