Refunds for purchases: how to get the most out of cashback

What is cashback

Cashback is a return of part of the cost of the goods to the account of the card with which the payment was made. It is charged for most purchases, and the bank can also establish categories with a higher percentage of return. There will be no cashback for transfers from card to card, and refunds for paying bills and fines cannot be received from all banks.

There are three types of cashback:

• Bonuses. They usually arrive immediately after purchase. And you can also connect several cards to one bonus account, which allows the whole family to accumulate bonuses. However, it is not possible to pay with them everywhere, and in many loyalty programs, bonuses expire if you do not have time to use them in a specific time frame.
• Miles. The main advantage of miles is that the refund amount is often more than bonuses and cash, up to 30% in some stores and up to 2% for all purchases, regardless of the category. But there is also a significant drawback - miles can only be used to pay for tickets and book hotels.
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• Rubles. The best cashback option is a refund. You can spend them on anything, anywhere, anytime. Unlike other types of cashback, the money returned to the account will not be burned under any circumstances. Minus insignificant - the refund does not take place immediately after the purchase, but in a certain billing period.

What cashback is paid from and why is it profitable for banks

Cashback is formed at the expense of the interbank commission and the percentage of the sale, which is paid to the bank by partner stores. In the first case, the seller transfers the commission for the purchase to his bank, and the payment systems transfer part of this amount to the bank that issued the card - this money is returned to your card.

As for the large cashback at partner stores, here the bank acts only as an intermediary. Retail outlets themselves pay a percentage of the purchase to the bank, and he already returns this money to the client's account.

For both stores and banks, this is a good promotion without high advertising costs. The buyer will prefer a card or store with cashback to the one in which it will not be possible to get benefits. In addition, the more transactions are performed on the cards, the more commissions the bank can collect. By offering favorable conditions for cashback, banks attract more and more new customers and increase the loyalty of existing ones.

How to get the most out of cashback

Choose the right card

Cards with a cashback option have purchase categories for which you can get an increased percentage of charges. For example, a standard cashback is 1%, and for paying for gasoline and buying children's clothes - 5%. To choose a card with the most advantageous offer for yourself, you can analyze your spending for a couple of months and understand what most of your expenses are spent on. Generally, a win-win is a refund for grocery purchases in supermarkets or paying bills in cafes and restaurants.

Refuse cash

Even small, but regular cash spending can significantly reduce the amount of cashback. Therefore, in order to return the maximum, it makes sense to pay for everything with a card. For example, if you spend 300 rubles in cash on the purchase of products, you can lose 15 rubles cashback per day (provided that 5% of the cost is returned for the purchase of products), and 450 rubles per month. The amount does not seem large, but it is already 5,400 rubles a year. The numbers are impressive, so you shouldn't neglect card payments, even if your purchases seem insignificant.

Search for discounted products

This will allow you to receive double benefits: both from the seller and from the bank. Often, cashback cards offer refunds for purchases in hardware stores, children's goods or clothing stores, and they, in turn, often arrange sales and promotions that are beneficial for the buyer. In-store discount and cashback are a great tandem to keep your budget.

Plan expenses

If the category of the increased cashback for the card changes every month or the bank offers special conditions for the program in some stores, you should take this into account when compiling a shopping list.

It is convenient to follow the offers in the bank's mobile application. Usually there is a special page with a list of partner stores, and a change in categories with an increased cashback is reported several days in advance. Regularly reviewing the conditions, you can plan purchases and not be left without cashback for them.

Pay with one card

It may seem that if you take one card with a good return on food, another for gasoline, and the third with the maximum cashback for buying clothes, you will be able to save a lot. But you need to remember that most cards have an annual service fee, if a certain limit is not spent for a month. This means there is a risk of spending more than receiving. It is better to have one card and carry out all payments on it, then you will probably be able to spend the required amount.

PJSC "MTS-Bank". License of the Bank of Russia No. 2268 dated December 17, 2014