# Advantages of Cash Back at POS?



## oblib (4 Aug 2007)

I have been wondering why its so common for many businesses to offer cash back with a debit card purchase.

There is an obvious convenience factor for the customer but are there any real advantages to the profits of the store giving cash back? The only thing I can think of it is that it increases your overall turnover with the transaction processor and in turn might earn a you a lower commission rate but that is all I can come up with.

I don't work in retail so I'm at a total loss here.

Many thanks-


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## MugsGame (4 Aug 2007)

Reduces the amount of cash on hand -- saves on bank lodgement fees, and reduces your exposure to theft during storage or transport.


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## pat127 (4 Aug 2007)

MugsGame said:


> Reduces the amount of cash on hand -- saves on bank lodgement fees, and reduces your exposure to theft during storage or transport.



Against a backdrop where electronic transactions are significantly cheaper to process than cash or cheques and from the Banks' perspective the more cash (in particular) is displaced, the lower their overall processing costs. Cashback serves to enhance the effect which MugsGame has described for those retailers who choose to offer it and it's presented as an added service to the customer.


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