Cashback vs discounts as an employee benefit – which is better?
Giving your employees the opportunity to make their salaries go further and regularly save money can make a noticeable difference to their finances year on year. By giving them access to offers for a wide range of retailers, you can help your employees save money on their everyday shopping, spontaneous purchases, cinema trips, holidays, gifts and more. This means they can end up saving hundreds of pounds every year, if not more. What a great way of rewarding your people for their hard work and loyalty while supporting their financial wellbeing too!
It comes as no surprise then, that retailer savings are a very popular employee benefit. But one of the questions I often get asked when I speak to HR professionals is: what’s better, cashback or discounts? If the monetary value of the saving is the same for both, then you can argue that there’s no real difference. However, because employees gain something tangible from cashback, it has a bigger impact and holds value long-term.
Let me explain this in more detail.
Employees pay the same, but gain
To quickly explain how cashback works, employees pay the same amount as they usually would, except instead of getting money off, they earn the saving as money back.
To use our advantage solution as an example, employees pay for a reloadable gift card, voucher or product through the platform and a percentage of the total amount is transferred to the employees’ account as cashback. All of the cashback employees earn is stored in their account and they can transfer it to their bank account, a reloadable gift card or simply leave it to build over time.
So, rather than getting money off products, employees pay the same, but gain money back instead.
Why is this better?
The financial benefit is more visible and meaningful
When we have a discount, we pay less at the checkout, which is great, but we don’t necessarily feel the benefit of that saving. The money we’ve saved simply gets spent on other things in the future.
With cashback, it’s all stored in one place and employees can see, over time, exactly how much money they’ve saved using the platform. Whether an employee saves £5 a month or £50, their cashback balance clearly demonstrates how they’ve financially benefitted from using the platform.
Employees being able to transfer their cashback to their bank account means that they can then use this money for something in particular. It could be a gift for a loved one or a weekend away – however an employee decides to use the cashback, it’ll be more meaningful and therefore more valuable in the long run which reinforces the benefit of using the platform. Win-win!
Cashback is free money that your employees get on top of their salaries
While your employees won’t be ‘earning’ money in the traditional sense, the cashback they accumulate is still money that they’ll get on top of their salaries. If employees utilise the offers available to them, it can really have a positive impact on their financial wellbeing.
On advantage, for example, it’s easy for employees to earn cashback on their everyday spending. Not only are there a huge range of retailers and offer types on the platform, employees can set up automatic monthly loads for their reloadable gift cards which makes earning cashback even easier in the long run. All they need to do is set up a direct debit for any of their reloadable gift cards through the platform, and they’ll be loaded with a fixed amount of funds every month, which will earn them cashback too.
This is a great option if an employee regularly shops at a particular retailer, like a supermarket. For example, if an employee calculates their average monthly spend at Asda, they can simply set up a direct debit to an Asda reloadable gift card which they’ll earn cashback on. They can then use the card to pay for their shopping at Asda, without needing to check the balance or top it up. Year on year, employees can save and therefore earn hundreds of pounds doing this.
Employees can use their cashback account as an alternative saving tool
As I’ve mentioned, cashback is essentially free money that gets stored in one pot for employees to use whenever they like. With this is mind, their cashback account can be used as an alternative saving tool – one that doesn’t require their direct input.
While they use the platform to earn cashback on their everyday spending (on top of other things), their cashback balance will grow. If left over time, this can become substantial. Having heard stories from our clients and being a regular user of peoplevalue’s own advantage solution for years, it’s very easy to accumulate a significant pot of money.
The savings they make through your platform can be used on bigger purchases like a holiday, or a special event like Christmas. As a result, the savings they’ve made with cashback are likely to be more memorable and significant than if they just had a discount.
Hopefully you can see how cashback provides extra value for employees. That’s why we deliver fantastic cashback offers to employees throughout the UK via our advantage solution.
Written by Andy Campbell, Business Development Executive at peoplevalue.