Pros and Cons Credits and Vouchers

A simple answer to this question is that it depends:

A cash back advantage can be good but often raises the price a great deal on an item. For example, I know that at the moment many mobile phone companies are offering cash back rewards to their customers if they take out a contract with them. This seems a little odd when you look at it when I pay less than these ‘reduced contracts’ and get more bang for my buck. However, with smaller companies like photos and gifts a coupon can be a lot better and give the value for money that we all require.

Companies such as Snapfish may offer a coupon as it is better than giving cash back as this is instant. As the checkout is a one-stage operation and you are not tied in to a contract for any length of time, this is more appropriate. It also gives the illusion in most cases (such as in supermarket environments) that the customer has saved some money and has the best deal available.

Again, this all depends on the type of purchase that has been made. Although this is not really to do with the customer focus here, companies also view the cash-back as a slightly less equitable solution to introducing customers to their products. This is obviously a sudden loss and while the purchase would not have been made, they have to immediately give something back to the customer. This could be frowned upon with contracts and long standing purchases as the customer may instantly pull out of the deal with the supplier. This again is an overhead that the supplier will have to look in to and weigh up.

This does mean that companies usually will give the voucher alternative on their purchases, as no money has been lost. Companies also will provide things at a much higher price than usual (as the business world works) and will not be making a significant loss on the purchase.

From a consumer point of view, we regard the cash-backs as being better. This is due to the simple psychological fact that if we have the money in our hands we feel that we have done the best. In some cases, we will always be looking for the best deal, although the deal is usually for something that we do not really need or want. Personally, I feel that the cash-back alternative is better as I feel that I have earned something and have tricked the supplier in to giving me that money.

While both of these offerings have, their pros and cons we must still agree that these are used at the discretion of companies to better improve their profits. It is still within the reach of any person while shopping on the internet or indeed in many shops to change between one or the other.