# Cashback **URL:** \ **Category:** Factual Questions\ **Created:** [February 26, 2009, 4:28pm UTC](https://boards.straightdope.com/t/cashback/487520 "2009-02-26T16:28:05Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Student\_Driver](https://avatars.discourse-cdn.com/v4/letter/s/3da27b/32.png) [@Student\_Driver](https://boards.straightdope.com/u/Student_Driver)\ **Post date:** [February 28, 2009, 8:21am UTC](https://boards.straightdope.com/t/cashback/487520/21 "2009-02-28T08:21:11Z")
> [@SmellMyWort](#): > > Also, I can remember many years ago my parents paying at the grocery store with a check and being allowed to write the check for more than was owed as to get some cash back. So it’s definitely not a new service the stores are offering. I forgot about this, and you’re right. Some stores still do this for the folks still using checks, too. ---
**Author:** ![psychonaut](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/psychonaut/32/4655_2.png) [@psychonaut](https://boards.straightdope.com/u/psychonaut)\ **Post date:** [February 28, 2009, 9:58pm UTC](https://boards.straightdope.com/t/cashback/487520/22 "2009-02-28T21:58:11Z")
> [@chowder](#): > > Invariably when paying by debit card at my local supermarket I’m asked if I would like any cashback. > > I don’t understand why stores offer this, If I say I’ll have £50 they give me my money but what profit is there in it for them?. > > It’s not as if I’m going to spend it in store having already done my shopping The motivation you describe (hope that the customer will proceed to spend the cash he just got back) may not apply in stores, but it certainly does in pubs, where cashless customers will often buy their first drink with a card and subsequent ones with cash obtained from cashback. This is more convenient for both the patron and the publican, since it’s much faster to pay by cash. Having a large wad of cash on hand may also tempt the patron to spend more than he originally intended… This sort of thing is an advantage for other venues where the customer tends to stick around and make multiple transactions. Casinos and gaming venues, maybe, and definitely cinemas, theatres, and sporting venues (debit card to buy your ticket at the box office and then cash to buy from the concession area or from vendors walking through the stands, the latter of whom don’t even take cards). ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [February 28, 2009, 10:19pm UTC](https://boards.straightdope.com/t/cashback/487520/23 "2009-02-28T22:19:02Z")
> [@psychonaut](#): > > The motivation you describe (hope that the customer will proceed to spend the cash he just got back) may not apply in stores, but it certainly does in pubs, where cashless customers will often buy their first drink with a card and subsequent ones with cash obtained from cashback. This is more convenient for both the patron and the publican, since it’s much faster to pay by cash. Having a large wad of cash on hand may also tempt the patron to spend more than he originally intended… Not just that, but the flat rate for each transaction will add up quickly if a customer has six drinks and some food and pays for each on on it’s own. ---
**Author:** ![psychonaut](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/psychonaut/32/4655_2.png) [@psychonaut](https://boards.straightdope.com/u/psychonaut)\ **Post date:** [February 28, 2009, 10:32pm UTC](https://boards.straightdope.com/t/cashback/487520/24 "2009-02-28T22:32:09Z")
> [@Joey\_P](#): > > Not just that, but the flat rate for each transaction will add up quickly if a customer has six drinks and some food and pays for each on on it’s own. I suppose that would be true if customers were charged a fee for debit card transactions. I don’t think that’s the case in the UK. ---
**Author:** ![Rysto](https://avatars.discourse-cdn.com/v4/letter/r/ecccb3/32.png) [@Rysto](https://boards.straightdope.com/u/Rysto)\ **Post date:** [February 28, 2009, 10:49pm UTC](https://boards.straightdope.com/t/cashback/487520/25 "2009-02-28T22:49:15Z")
> [@psychonaut](#): > > I suppose that would be true if customers were charged a fee for debit card transactions. I don’t think that’s the case in the UK. The customer isn’t, but the pub almost certainly is. By providing cash to customers, the pub could save itself quite a lot of money in fees. ---
**Author:** ![Ximenean](https://avatars.discourse-cdn.com/v4/letter/x/aca169/32.png) [@Ximenean](https://boards.straightdope.com/u/Ximenean)\ **Post date:** [February 28, 2009, 10:51pm UTC](https://boards.straightdope.com/t/cashback/487520/26 "2009-02-28T22:51:31Z")
> [@Martini\_Enfield](#): > > Every retail job I’ve had has generally encouraged people to take cash out using EFTPOS, as it means less money in the till, which reduces the risk, both security-related and, just as importantly, banking error-related (stemming from mis-counting the day’s takings). Why not just have less cash in the till in the first place? ---
**Author:** ![psychonaut](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/psychonaut/32/4655_2.png) [@psychonaut](https://boards.straightdope.com/u/psychonaut)\ **Post date:** [February 28, 2009, 11:04pm UTC](https://boards.straightdope.com/t/cashback/487520/27 "2009-02-28T23:04:15Z")
> [@Ximenean](#): > > Why not just have less cash in the till in the first place? Exactly! Just think of how easy it would be if they just gave away everything for free instead of selling it in exchange for cash. ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [March 1, 2009, 4:24am UTC](https://boards.straightdope.com/t/cashback/487520/28 "2009-03-01T04:24:06Z")
> [@Ximenean](#): > > Why not just have less cash in the till in the first place? Because most people have $20 and $50 notes and expect change regardless of the amount of their purchase, for some reason. And what **Psychonaut** said. 😉 ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [March 1, 2009, 5:35am UTC](https://boards.straightdope.com/t/cashback/487520/29 "2009-03-01T05:35:10Z")
So hold up… what kept me from taking advantage of this before is… do you get charged one of those high “cash advance” % or something by the credit card company? Or is it really just a free ATM? ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [March 1, 2009, 7:02am UTC](https://boards.straightdope.com/t/cashback/487520/30 "2009-03-01T07:02:32Z")
> [@Alex\_Dubinsky](#): > > So hold up… what kept me from taking advantage of this before is… do you get charged one of those high “cash advance” % or something by the credit card company? Or is it really just a free ATM? EFTPOS (Electronic Funds Transfer at Point Of Sale) uses your ATM card. Provided the merchant you are purchasing from gives cash out, it’s basically a free (or significantly cheaper) ATM. You can’t do cash out on Credit Card transactions via an EFTPOS Terminal (well, OK, it _could_ be done using a system similar to the “writing a cheque for the purchase amount plus extra cash” system mentioned earlier, but no Major Business will do that for you as they get stung high fees on Credit Card transactions), but you can do it via an ATM. You don’t get any Interest Free period if you do that, though- you’re on the hook for the Interest immediately. One other thing: EFTPOS terminals here have three buttons on the top: “SAV CHQ CRD” (Savings Account, Cheque Account, Credit Card). If you have your savings or cheque accounts hooked up to your Credit Card, you can use your Credit Card like any other ATM card. The Credit Card rules only apply if you use the “Credit” option. ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [March 1, 2009, 7:12am UTC](https://boards.straightdope.com/t/cashback/487520/31 "2009-03-01T07:12:19Z")
Awesome. And here I was thinking it was some sort of scam. (Honestly, what finance-related thing isn’t?) ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [March 1, 2009, 7:17am UTC](https://boards.straightdope.com/t/cashback/487520/32 "2009-03-01T07:17:22Z")
> [@Alex\_Dubinsky](#): > > Awesome. And here I was thinking it was some sort of scam. (Honestly, what finance-related thing isn’t?) Just a reminder that I live in Australia and am speaking for the situation in Australia (and, I believe, NZ). I don’t know how it works in the US or UK, but I’m 99% sure it’s pretty much the same. ---
**Author:** ![Ximenean](https://avatars.discourse-cdn.com/v4/letter/x/aca169/32.png) [@Ximenean](https://boards.straightdope.com/u/Ximenean)\ **Post date:** [March 1, 2009, 8:14am UTC](https://boards.straightdope.com/t/cashback/487520/33 "2009-03-01T08:14:58Z")
> [@Martini\_Enfield](#): > > Because most people have $20 and $50 notes and expect change regardless of the amount of their purchase, for some reason. And what **Psychonaut** said. 😉 But if you encourage people to take cashback, then you run out of cash sooner… Say you need $500 per day in a till for regular retail purposes and unprompted cashback (pulling a figure out of the air). If you prompt people to take cashback, maybe that rises to $800. You’re saying that to avoid the undesirable situation of having cash left over at the end of the day, you encourage cashback. I’m saying, why not keep schtum unless the customer asks for cashback, then you only need $500 in the first place? It seems like you’re adding cash to the till, then desperately trying to get rid of it, all for no real purpose. I don’t understand **psychonaut** ’s response, I’m afraid. I didn’t say have no cash in the till. ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [March 1, 2009, 8:46am UTC](https://boards.straightdope.com/t/cashback/487520/34 "2009-03-01T08:46:23Z")
> [@Ximenean](#): > > But if you encourage people to take cashback, then you run out of cash sooner… No, you don’t. Trust me. The amount of cash coming into the till exceeds the amount being withdrawn by cashouts exponentially. > [@](#): > > Say you need $500 per day in a till for regular retail purposes and unprompted cashback (pulling a figure out of the air). If you prompt people to take cashback, maybe that rises to $800. You’re saying that to avoid the undesirable situation of having cash left over at the end of the day, you encourage cashback. I’m saying, why not keep schtum unless the customer asks for cashback, then you only need $500 in the first place? Because people pay cash for items, so we’re going to end up with lots of money in the till anyway? A $500 float is generally made up of small notes- $5 and $10s, along with $1 and $2 coins and some shrapnel. Most people making cash purchases are using either $20 or $50 notes (because that’s what ATMs dispense here), so the purpose of the float is to provide change for those cash purchases. As the day goes on we’ll acquire $20 and $50 notes and run out of $5 and $10 notes. It doesn’t take long to have far, far more money in the till than you started with- say, people buy $1000 worth of stuff in cash that day. You still have your original $500 float (give or take a few dollars for errors) and now you’ve got $1000 extra, generally in $20 and $50 notes. You could have NO float at all, and you’d still have this issue (assuming no-one wanted change, which is almost impossibly unlikely). However, if you can get people to take cashout, you might get that extra cash (above your float) amount down to, say $750. As a company you’ve still “made” that $1000, but you only have to count and take $750 of it to the bank- the other $250 has been transferred electronically. The idea isn’t to avoid having _any_ cash left over at the end of the day, it’s to avoid having Phat Wads Of Ca$h in the store, which is an obvious security risk and a logistical pain in the ass. > [@](#): > > It seems like you’re adding cash to the till, then desperately trying to get rid of it, all for no real purpose. Respectfully, It seems like you’ve never worked in retail and therefore don’t know what you’re talking about. It’s really not that hard a concept to grasp, IMHO. ---
**Author:** ![Alex\_Dubinsky](https://avatars.discourse-cdn.com/v4/letter/a/dbc845/32.png) [@Alex\_Dubinsky](https://boards.straightdope.com/u/Alex_Dubinsky)\ **Post date:** [March 1, 2009, 8:48am UTC](https://boards.straightdope.com/t/cashback/487520/35 "2009-03-01T08:48:11Z")
Is it possible the contract with the credit card processor forces the offer? ---
**Author:** ![Richard\_Pearse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/richard_pearse/32/13144_2.png) [@Richard\_Pearse](https://boards.straightdope.com/u/Richard_Pearse)\ **Post date:** [March 1, 2009, 8:59am UTC](https://boards.straightdope.com/t/cashback/487520/36 "2009-03-01T08:59:59Z")
Not in my experience. ---
**Author:** ![Martini\_Enfield](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/martini_enfield/32/11123_2.png) [@Martini\_Enfield](https://boards.straightdope.com/u/Martini_Enfield)\ **Post date:** [March 1, 2009, 9:02am UTC](https://boards.straightdope.com/t/cashback/487520/37 "2009-03-01T09:02:58Z")
> [@Alex\_Dubinsky](#): > > Is it possible the contract with the credit card processor forces the offer? EFTPOS here is provided by the bank, not Visa or MasterCard or whoever; there’s nothing in the contract at all about having to offer cash out. Lots and lots and lots of places here don’t offer it; it’s entirely at the merchant’s discretion. ---
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [March 1, 2009, 2:17pm UTC](https://boards.straightdope.com/t/cashback/487520/38 "2009-03-01T14:17:09Z")
> [@Martini\_Enfield](#): > > Just a reminder that I live in Australia and am speaking for the situation in Australia (and, I believe, NZ). I don’t know how it works in the US or UK, but I’m 99% sure it’s pretty much the same. Correct. I think in previous threads on this subject some US customers have reported being charged fees on debit transactions, which presumably include the cash-back element if it is a percentage fee. However, I have never come across a business charging for cash-back, and that includes customers of my company - we develop debit/credit software. ---
**Author:** ![Ximenean](https://avatars.discourse-cdn.com/v4/letter/x/aca169/32.png) [@Ximenean](https://boards.straightdope.com/u/Ximenean)\ **Post date:** [March 1, 2009, 3:01pm UTC](https://boards.straightdope.com/t/cashback/487520/39 "2009-03-01T15:01:55Z")
> [@Martini\_Enfield](#): > > Respectfully, It seems like you’ve never worked in retail and therefore don’t know what you’re talking about. It’s really not that hard a concept to grasp, IMHO. This is true. Somehow I was thinking of tills as things that banknotes generally flow out of, rather than into. Maybe because I rarely pay cash except for trifling purchases. ---
**Author:** ![Celyn](https://avatars.discourse-cdn.com/v4/letter/c/9dc877/32.png) [@Celyn](https://boards.straightdope.com/u/Celyn)\ **Post date:** [March 1, 2009, 3:25pm UTC](https://boards.straightdope.com/t/cashback/487520/40 "2009-03-01T15:25:27Z")
> [@Martini\_Enfield](#): > > … > Total: $28.99\* > > That and having the cashier ask you also maintains some kind of interaction between customer and cashier, which is a good thing, IMHO. Oh, absolutely. We are still a society of people, and are not robots yet. [Previous page](https://boards.straightdope.com/t/cashback/487520.md?page=1)