Is 10% cashback exactly the same as 10% off?
In amount, yes: on a 500 purchase the discount gives you 50 and so does the cashback. The difference is timing and form: with the discount you pay 450 now, with cashback you pay the full 500 and get 50 back later. If the cashback is credit usable only in the same store, it is worth less than a straight discount.
The same amount on paper
Enter 500 and 10 in the Discount calculator: the final price is 450 and the saving is 50. That is the amount cashback promises too. The calculator does not tell them apart because the maths is identical; the whole difference lies outside the maths.
Where they differ
- Timing: a discount lowers what you pay today. Cashback means paying in full and waiting, which can take days or weeks.
- Conditions: some cashback has a cap, is cancelled if you return the item, or has to be claimed.
- Form: cashback to your card or account is as good as cash. Store credit or points are worth something only if you buy from the same place again.
When the cashback is credit for your next order
Now the sums change. Say you buy something at 500, get 50 in credit, then spend it on another 500 purchase. Across the two orders you paid 500 and then 450, so 950 for 1000 worth of goods.
1000 with 5% off: 950. That is what you actually got across both orders.
1000 with 10% off: 900. That is what a straight 10% discount on both orders would have given.
So 10% back as credit works out as 5% off everything you bought, provided you were going to buy again anyway. If you do not, it is worth nothing.
From the seller's side
Credit-style cashback costs you less than a straight discount, because it is only spent if the customer returns and some of it is never used. For the same reason it attracts shoppers less. If you want an order now, a discount is clearer; if you want the customer back, credit does that job. Either way, describe it honestly: '10% credit on your next order' is clearer than '10% cashback' when it cannot be taken as cash.
If you combine them, a discount now and credit for the next order, run the discount on this order in the calculator and treat the credit as a deferred cost that lands on the next order, not this one.
Common questions
Is the 10% cashback on the price before or after tax?
That depends on the offer's terms. The calculator takes the rate from whatever amount you enter, so enter the amount the terms name.
Which should I take: 8% off, or 10% cashback to my card?
In money, the cashback is larger. Work out both on your purchase to see the gap in dirhams or riyals, then decide whether it is worth the wait and the conditions.