What is Cashback: How Does a Cashback Reward Program Work"

What is cashback? To sum it up briefly, cashback is a perk typically provided by credit cards where a percentage of purchases made with the card are paid back to the owner.

Cashbacks are great. They help you simplify your finances and earn rewards whenever you spend.Cashback rewards are also perfect for first-time credit card holders, as they are easier to understand than travel rewards.

What is Cashback?

Cashback is a rewards program where customers can earn back a percentage of the money spent while shopping. These purchases should correspond to categories enlisted by each card and can include groceries, travel, dining, petrol, entertainment and online shopping, to name a few.

For example, if a credit card offers 1.5% cashback on every purchase, you’ll earn 1.5 cents in cashback rewards for every dollar you spend. Cashback can range anywhere between 1% and 10%, with maximum monthly caps that can go up to RM100, according to an article by RinggitPlus.

This cash reward will then be debited into the holder’s account according to the bank’s cashback policy. Initially only available on credit cards, some debit card accounts now offer cashback rewards too, as well as stores, online retailers, and more.

The great thing about cashback credit cards is that it does not matter how you choose to redeem your rewards, as the cashback value remains constant. Some cards even offer higher cashback for specific redemption options.

Cashback Reward Programs

Cashback rewards vary according to the card provider and the retailers they’re partnered with. There are many different programs available—credit cards, debit cards, and websites, to name a few. This means it’s worth comparing multiple cashback reward programs to see which best suits your spending habits.

How Does Cashback Work

Cashbacks are added perks to encourage customers to use the card often and attract new customers. They are different from traditional rewards points, which can only be used to buy goods or services, or gift cards presented by the card issuer.

Cashback rewards are made possible due to partnerships between card providers and retailers. They are usually presented to the cardholder on the monthly credit card statement. When you purchase something with your card, the retailer will pay a percentage back to the card company, which then passes a portion of these earnings on to you.

This means that all parties benefit from an attractive cashback program. Customers can earn extra money with their purchases,while card providers and retailers can promote their partnership to attract more customers.

How Much Cashback Can I Receive?

How much cashback you can receive depends on two things: the rewards program you sign up for and how much you spend.

To select a program that is right for you, determine whether you’ll be able to earn benefits without changing your everyday spending habits. This will help you get your money back without going over budget. If not, find a program that’s a better fit for your lifestyle.

Here are some pros and cons to help you decide which cashback program to go for.


- Cash rewards: Each cashback credit card has its own earning scheme, but they all offer the same straightforward,easy-to-use benefit: cashback for every Ringgit spent.

- Some cards offer rewards at a flat rate, while others provide higher cashback levels on specific categories, such as gas or groceries, that either stay the same or rotate each quarter.

- Many offer sign-up bonuses: Enjoy sign-up bonuses if you meet the minimum spending requirement within the first few months.

- Shopping perks: Some cashback credit cards offer benefits to safeguard your purchases or save you money. Examples include the lowest advertised price match, extended warranties, return guarantees, cell phone protection, etc. However, not all cards offer these features. Be sure to read your card’s benefits guide for more information.


- Foreign transaction fees: Cashback credit cards often add a 3% fee to purchases made abroad.

- No travel rewards: If you want to redeem rewards specifically for travel or use the points at airlines or hotel partners, a travel rewards card is a better choice for you.

Redeeming Cashback

Readers should be aware that some credit cards require a minimum redemption threshold. Once again, knowing the terms and conditions of your credit card is essential. Cashback is often redeemed in three ways:

- Bank deposit: The cashback is deposited directly to your checking or savings account.

- Credit on statement: The cashback directly offsets your current credit card balance. For example, if your credit card balance is RM100 and the cashback

- Gift card: The cashback is returned as a gift card to use at partnered retailers.

Cashback Rewards with ZCITY

If you’re looking for more rewards whenever you shop, ZCITY is here to help you get the support you need.

Enjoy great deals and expect more earnings and brilliant rewards with ZCITY! More than just a platform offering instant rebate and cashback programs, it also advocates helping everyone enjoy multiple rewards while giving back to the community. Members and merchants get to enjoy affiliate cashback programs too.

Learn more about ZCITY or sign up for free with the ZCITY app to stay up to date with the latest happenings, seasonal promotions and irresistible campaigns.


Should You Get a Cashback or Rewards Points Credit Card? RinggitPlus, 2022.