Rewards Program Comparison Calculator

Cash back is simple—customers instantly understand "5% back as store credit." Points systems confuse with conversion rates and tiers. This simplicity drives up to 3× more repeat revenue than points. Plus, with only 28% redemption rate, 72% of issued credit becomes pure margin, making your true cost just 2.6% of revenue.

Points programs typically cost 3-5% of revenue with complex rules that confuse customers. Low engagement and redemption rates mean minimal repeat purchase lift (only 10-15%). The complexity drives disengagement, resulting in lower ROI and higher management costs compared to straightforward cash back rewards.

With a 5% reward rate, you issue 5% of revenue as store credit. However, only 28% of customers redeem that credit—meaning 72% becomes pure margin. The actual cost is just the 28% redeemed portion, which equals approximately 2.6% of revenue. This makes cash back 70-90% less expensive than first-visit discounts.

Most successful merchants start with 5% cash back. This balances customer incentive with profitability. Since only 28% redeems, your true cost is just 2.6% of revenue while customers perceive high value. Higher-margin businesses can offer 7-10%, while lower-margin stores may start at 3-4%.

Cash back rewards deliver up to 3× more repeat revenue than points programs, with customers spending up to 20-60% more per order. Store credit typically contributes 11-15% of monthly revenue. The simplicity and clear value proposition drive significantly higher engagement compared to complex points systems.

If your points program costs 3-5% of revenue with minimal repeat purchase lift, switching to cash back rewards can save 70-90% in costs while generating up to 3× more repeat revenue. With 72% of credit going unredeemed (pure margin), cash back offers better economics and simpler customer experience.