Discount vs Cash Back: Which Saves You More Money?

We all love a good deal while shopping that could save us some money. Thankfully, businesses cooperate.

We can save on our spending in two major ways: discounts and cash back.

The question this blog addresses is that of discount vs cash back. Should you go for a discount or cash back? How do they work?

We’ll discuss both cashback and discounts and how they work in our guide.

Let’s start with discounts!

What Are Discounts and How Do They Work?

Discounts are price reductions on products or services. You’ve likely seen them while shopping in-store or online stores.

For example, if a store offers a $100 watch at a discount of 20%, you only pay $80.

Discounts make your purchase cheaper right away, which means you save instantly at checkout.

But do discounts always mean you’re getting the best deal? Not necessarily. Sometimes businesses offer discounts on leftover stock in the name of clearance sale.

Other times, discounts may require you to buy more than you need just to qualify for the savings.

Here are some popular types of discount:

• Percentage-off sales: You’ll often see discounts like “20% off” at retail stores and online shops. This means a percentage of the total price is deducted at checkout.
• Buy-One-Get-One (BOGO) offers: These promotions let you get an extra item for free or at a reduced price when you purchase a specific product.
• Promo codes and coupons: Many online stores provide discount codes you can enter at checkout to reduce the price.
• Seasonal discounts: Retailers offer price reductions during holidays, end-of-season sales, and Black Friday events.
• Student and military discounts: Many brands offer special discounts for students, teachers, and military personnel.
• Bulk discounts: When you buy in larger quantities, you often get items at a discount.

Cashback Definition: What Does It Mean?

Cashback lets you earn a portion of your spending back after the purchase. This could come from a credit card, a cashback app, or a retailer offering rewards.

For example, if your credit card offers 3% cashback on groceries and you spend $100, you’ll get $3 back, usually as a statement credit, direct deposit, or gift card.

So the main difference between discount vs cash back comes down to how much you’re paying upfront.

In case of cash back you pay the full amount and receive money back later. Whereas on discounts, you pay less at checkout time.

Another difference is that cashbacks aren’t usually delivered instantly. They accumulate for a month or so before you can use it.

This also varies depending on the entity offering the cashback. Is it your credit card, a cash back app or a retailer?

For example, Scrambly is a get-paid-to platform where users can earn rewards by playing games, trying apps, and completing tasks.

It also offers cashback opportunities on select apps, like Uber Eats, and the cashback may take up to 72 hours to be credited to your account.

Many businesses also use cashback promotion strategies to encourage customers to shop more.

Now just like discounts, cashback can come in different forms:

• Cashback credit cards: Some credit cards give you a percentage of your spending back as cash rewards.
• Cashback apps and websites: Get-paid-to platforms partner with retailers and offer cashback when you shop through their links.
• Retailer loyalty programs: Some stores offer cashbacks in the form of store credits or points that you can use for future purchases.

How Does Cashback Work on a Credit Card?

A cashback is usually offered on credit cards.

So the way you earn cashback depends on the type of card you have. You’ve got three main types of cashback cards:

• Flat-rate cashback cards: These give a fixed percentage on all purchases, no matter the type of product (e.g., 1.5% on all purchases).
• Tiered cashback cards: These offer different cashback rates for different spending categories. For example, 3% on dining, 2% on groceries, and 1% on everything else.
• Rotating category cashback cards: These cards change their bonus categories every few months. For example, one quarter may offer 5% back on gas, while another offers 5% back on groceries.

Here’s a simple way to decide between them.

If you’re up for tracking your purchases and making all sorts of purchases, a flat rate may be the one for you.

In contrast, tiered cashback cards are good for you if you usually make specific purchases only.

Whatever card you choose, your rewards will likely accumulate over time and can be redeemed as a statement credit, bank deposit, or gift cards.

However, remember that cashback credit cards typically have higher annual fees or Annual Percentage Rate (APR) than other cards.

Benefits of Discount vs Cash Back: Which Is Better?

So should you choose discounts or cashback? Here are the benefits of discount vs cash back to make the decision easier for you.

Benefits of Discounts

• Instant savings at checkout
• No need to wait for rewards to accumulate
• Works on most purchases without restrictions
• Can be stacked with other deals (e.g., promo codes + sale items)
• No risk of expiring rewards

Benefits of Cashback

• Earn money back on purchases over time
• Some cashback programs offer bonus rewards for specific categories
• Works automatically with cashback credit cards
• Some cashback apps provide additional discounts along with cash rewards
• Credit cards with cashback may offer sign-up bonuses

FAQs

What are discounts and cashback?

Discounts reduce the price of a product or service at the time of purchase, while cashback gives you a portion of your spending back after the transaction.

The main difference lies in how much you pay at checkout. With discounts, you pay less, while in the case of cashback, you pay the full price and get the cashback later.

How does cashback work on a credit card?

Credit card companies offer a percentage of your spending back as cash rewards. You typically redeem these cashbacks or rewards as statement credits, direct deposits, or gift cards.

Is cashback better than a discount?

Not necessarily. Discounts offer immediate savings, while cash back provides long-term benefits. The best option depends on your spending habits.

Can I use discounts and cashback together?

Yes! Many cashback programs still apply even if you use a discount. This way, you can maximize your savings by combining both methods.

Save Money and Earn Cash on Scrambly

Now that you know the difference between discount vs cash back, let’s introduce you to a platform that offers cash back for having fun.

Yes, you heard that right. Scrambly is a get-paid-to platform that hosts many games and apps.

With Scrambly, you can earn gift cards or free PayPal money while playing your favorite games and using apps on the platform. Earning opportunities are many and payouts are fast.