The expert explained how banks charge cashback
Expert Spivakov called cashback a compliment from the bank to his clients
Many banks charge customers cashback for purchases as gratitude for using their services; At the same time, the bank chooses the categories of goods and services for bonus payments on its own so as not to incur losses, Andrey Spivakov, managing director for retail credit products of Raiffeisenbank, told RIA Novosti.
“Cashback is not a way to make money, but rather a compliment from the bank to its customers in gratitude for using its products. Banks themselves choose which expenses to pay cashback for and for which not. This is a balance between the wishes of customers and the break-even of the loyalty program. cashback programs take into account payments for goods or services, but cash withdrawals and transfers are not, “the expert said.
This is because otherwise it would be possible to endlessly withdraw money and deposit into the account over and over again, always getting cashback. The same situations can arise when paying bills for the Internet and mobile communications. To exclude unfair use of cashback, banks introduce a list of exceptions. It is small and occupies the smallest part of our daily purchases and payment for services, said Spivakov.
Each store, gas station or beauty salon that accepts payment by cards pays a commission for each operation to the bank whose card the client was using. In the case of payment in cash, they are forced to pay a collection fee. Therefore, it makes little difference to the store how customers pay for purchases – there is still a commission for banking services. The bank shares these commissions with clients in the form of cashback, the expert explained.
“There are banks that impose a limit on the maximum amount of cashback per month, on the minimum purchase amount for accruing cashback, on the minimum number of points for exchange, etc. This is exactly what allows us to offer customers an increased cashback, for example, 5% or 10%, but only in one or two categories of purchases and services. Therefore, in fact, the client receives 1-2% cashback, if you look at all purchases in total, “concluded Spivakov.