Cash Back Rewards Calculator

Cash back creates store credit that customers can only spend with your brand, guaranteeing return visits. Unlike discounts that reduce margins immediately, only 28% of store credit gets redeemed—meaning 72% becomes pure margin. The true cost is just 2.6% vs 10-20% for discounts, while protecting profitability and building customer loyalty.

Most successful stores offer between 5-10% cash back. Lower percentages (3-5%) work well for high-margin products, while competitive categories may benefit from 8-12%. The calculator helps you model different scenarios to find the sweet spot that balances customer incentive with profitability.

Data from 200+ Shopify stores shows that only 28% of customers redeem store credit, with the average redemption happening within 30 days for those who do. This creates a predictable cycle of repeat purchases while 72% of issued credits become pure margin—unlike traditional discounts where 100% of the cost is lost immediately.

Absolutely! If you're planning to launch a cash back rewards program, use industry benchmarks for average order value and projected monthly orders. The calculator helps you forecast your true costs (accounting for the 28% redemption rate) and budget accordingly before implementing the program with Redeemly.

No. Store credit is redeemed at full retail price, maintaining your margins. Traditional discounts immediately reduce revenue by 10-20%, while cash back has a true cost of only 2.6% due to the low redemption rate. The net effect is higher customer lifetime value, protected margins on redemption orders, and up to 3× more repeat revenue vs points programs.

Redeemly is a native Shopify app that integrates seamlessly with your store's checkout, customer accounts, and order system. Setup takes less than 5 minutes with no coding required. Over 7,000 merchants use our apps, with 200+ stores actively using Redeemly to drive repeat purchases and protect margins.