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Industry Insights

Cashback at the Checkout: When the Till Doubles as an ATM

Ogloba Team 3 min read

How does checkout cashback work? Retailers return part of the card commission as value loaded onto a closed-loop gift card, keeping the reward spendable inside their own stores.

Cashback at the Checkout: When the Till Doubles as an ATM

Where should a credit card reward be spent? Retailers who help fund those rewards increasingly answer: in our stores.

Rewards That Leak Out of the Store

Cash back, points, merchandise and travel bonuses are offered by card issuers and banks to win and retain cardholders, typically as a small percentage of net expenditure and redeemable as cash, travel or gift cards. Merchants pay commission on every card transaction they accept. A reward part-funded by that commission but redeemed elsewhere is a cost with no return visit attached.

Sharing the Commission, Keeping the Customer

Many large retailers have contracted with card companies to share that commission with the cardholder as value on a closed-loop card issued by the retailer — sometimes limited to a co-branded program, sometimes extended to every issuer under contract. These arrangements usually include a B2B element, with the card company committing to buy closed-loop loads at a discount. Historically the delivery was manual: a gift card or paper coupon handed over at the till, charged daily in bulk.

Loading the Reward in Real Time

Ogloba takes a different route. The cashier swipes the credit card a second time, the card number reaches the Ogloba back end, the holder is identified, and the co-branded closed-loop card is loaded with the agreed cashback amount — on electronic cards or mGift. The reward is issued instantly, and it returns through the same doors.

FAQ

Who funds a credit card reward, and where does it usually get spent?

Card issuers and banks offer it, typically as a small percentage of net expenditure redeemable as cash, travel or gift cards. Merchants pay commission on every transaction, so a reward part-funded by that commission but redeemed elsewhere is a cost with no return visit attached.

What does the retailer negotiate with the card company?

A share of that commission, returned to the cardholder as value on a closed-loop card the retailer issues — sometimes only for a co-branded program, sometimes for every issuer under contract, usually with the card company committing to buy closed-loop loads at a discount.

How was the reward delivered before real-time loading?

Manually: a gift card or paper coupon handed over at the till, charged daily in bulk.

What does the cashier actually do to load cashback instantly?

Swipes the credit card a second time. The card number reaches the Ogloba back end, the holder is identified, and the co-branded closed-loop card is loaded with the agreed amount, on electronic cards or mGift.

Further reading

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