A lot of people often ask us what exactly is cashback and whether it is the same as discount.
Especially as a result of the Samsung 15% cashback offer announced earlier this month, more people have started looking for an answer to this question. So, we decided put up the answer to this as a part of Cardback Suggests in QnA format, so that it can serve the larger interest of the card user community.
Q. Is cashback the same as discount?
A. No, cashback is not the same as discount. Discount is usually given instantaneously on-the-spot before a bill or invoice is generated, but cashback gets reflected in the monthly statement of a card as a credit to the person who holds the card.
Q. When is the cashback amount credited to a buyer?
A. As a part of a card’s monthly statement – usually at the end of each billing cycle.
Q. Who bears the cashback amount?
A. More often than not, the issuing bank
Q. Is cashback applicable on both credit as well as debit cards?
A. It could be. It completely depends on the issuing bank and the terms and conditions of the offer. Cashback is more popular on credit cards, but debit cards are not ruled out. In case of debit cards, the cashback would reflect in the bank statement, rather than the card’s statement.
Q. A simple example?
A. Suppose you have to buy a phone that is priced at ₹10,000. If you were entitled to a 15% discount on the phone, you would pay only 85% of its price which is ₹8,500 and your instantaneous discount would be ₹1,500. But in case of cashback, you would pay the full amount when you buy the phone. However, your bank will credit ₹1,500 to your credit card’s statement that is due after the purchase. Of course, you have to pay using the card who’s issuer is offering you the cashback.