A Beginner’s Guide To Cash Back Debit Card Transactions

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The retail  world is a challenging place. To build a solid reputation and loyal customers, one needs to come up with various strategies and attractive benefits. Cashback on debit card transactions is one of the major benefits that many  retailers offer, though the process involves some additional responsibilities for  the merchant. Here is everything  that a customer and a merchant should know before getting started with getting cash back on debit card transactions .

All About the Debit Card Cash Process

Many times when a customer has a debit card with cash back, he is unaware of how this process works. In order to end this confusion, we are here to tell you everything you need to  know about the process.

When a customer requests cash back through his debit card, the merchant charges the customer’s card with an amount in addition to the amount of the customer’s purchase. The merchant then  gives the customer that  amount of cash from the register. Here the thing to remember is, cash back can only be received  with debit card transactions and not credit cards.

Also, at the back end of the transaction process, the payment terminals should have cash back functionality. There should be special handling to track the transaction and the cash back amounts separately. And if a customer is only looking for cash back, he should be directed to an ATM because to get cash back from a debit card purchase,  the transaction amount must be higher than the cash back amount.

Perks Of Cashbacks Offered By Merchants

There are many perks associated with getting cash back on debit card transactions like getting a service from merchants, meeting  customers’ expectations, and reducing the amount of cash on the merchants’ hands.

The idea of cash back on debit card transactions was started  by the British supermarket chain Tesco. The main reason why it originated was to reduce the amount of cash that store employees had to deposit at the end of the day. Having more cash in hand came with more security risks, more  time handling it, more trips to the bank, etc. 

These days, cash back debit cards are majorly associated with customer satisfaction and expectations. There are many customers who buy things  specifically to get cash back. The fact that ATM fees are higher than fees for cashbacks makes it more convenient for customers to buy items to get cash back and save those dollars which would be paid in ATM fees. .

Cashback Transactions or Chargebacks

When a merchant tries to get rid of debt fast, he simply chooses a hit and trust method. This method is based on the idea  that future purchases from cashback  customers will make up for the loss. Well, this is right to an extent, but can cash back transactions lead to chargebacks?

The answer to this question is NO. The cash back portion of a transaction is not subject to chargebacks. Even if the cardholder disputes a cash back transaction, he will get only the purchase amount back, and not the cashback amount.

Debit cards come with an EMV chip and require  a PIN to get cash back above the amount of  a purchase. So, even if the card gets stolen, the thief can not get the cashback amount but only the purchase amount. Cash back debit card transactions ensure a safe and low-cost way for merchants to offer a valuable service to their  customers. It is a service  that will encourage the customers to shop there in the future .

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