Hi all, so I just moved to Texas from an Asian country and I’m baffled by stores like Target and Office Depot that let you choose to receive a certain amount of “cashback” when you check out with a card. I can’t figure out what that thing is for and I’m pretty sure it’s not a coupon of sorts like how the term is used in some other context. My only guess is that it’s for people who happen to want some cash on hand but don’t want to go to the ATM for some reason so they charge your card extra money according to the amount you picked and then hand you the extra cash as a convenience while you’re at a cash register. This is all I can think of but it still doesn’t make much sense to me so any insight is appreciated.
Edit: thanks everyone. Back where I lived the city was much denser so it wasn’t hard for one to find a “free ATM” at a 7-11. That’s why I never thought about how people would not get their cash from ATMs. This makes a lot more sense now.
13 comments
>My only guess is that it’s for people who happen to want some cash on hand but don’t want to go to the ATM for some reason so they charge your card extra money according to the amount you picked and then hand you the extra cash as a convenience while you’re at a cash register.
Basically
You’re correct, its not a coupon. It’s a convenient option to get cash for those who don’t want to stop by an ATM. It’s especially convenient if you’re not near an ATM owned by your bank, because you avoid surcharges from the owner of the ATM.
You nailed it. If you request $20 cash back, they charge an additional $20 to your card and hand you the cash.
It’s nice if you don’t have time to hit an ATM, or don’t have an ATM close by that won’t charge a fee. I’ll buy a drink or candy or something close to an ATM fee if I need to get cash.
>don’t want to go to the ATM for some reason
Well one reason is you won’t be charged a fee by the ATM owner
Yep that’s what it is. ATMs cost money, cash back doesnt
You got it right and now that I think about it, it wasn’t a thing I saw in Asia despite I using cash at many places. But Asian countries also don’t have a culture around things like coupons, clearances, closeouts, rebates, etc. so this shouldn’t be too odd.
Cashback at the register is you getting cash in exchange for a debit (and sometimes credit) payment. So you pay for your goods at $95 and ask for $10 cashback, so you are now charged $105 and they hand you a $10. It’s an even exchange for the store as you paid for that $10 with your card.
It’s for if you need cash and don’t want to go to the bank. You’re already at the store and need $10 cash, might as well get it there.
> but don’t want to go to the ATM for some reason so they charge your card extra money according to the amount you picked and then hand you the extra cash as a convenience while you’re at a cash register
Yes, this is exactly what it is. It only works for debit cards when you enter your PIN, not credit cards or debit cards with skipped PIN.
What makes the convenience advantage bigger is that there are no extra fees charged. Whereas with ATMs in the US, you are usually charged a fee if you use one not owned by your bank. And getting to an ATM owned by your own bank can sometimes require going out of your way.
yeah that’s basically what it is. Not all ATMs are free, and not all banks will cover ATM fees. Like for me, my bank’s ATMs are free but ATMs at other banks or at random stores and stuff cost money. So if I am already buying stuff at the store and want to take out like 20 or 40 bucks, I’ll go with some cash back.
>My only guess is that it’s for people who happen to want some cash on hand but don’t want to go to the ATM for some reason so they charge your card extra money according to the amount you picked and then hand you the extra cash as a convenience while you’re at a cash register.
That’s pretty much it. Depending on who you bank with, it can be difficult to find an ATM that doesn’t charge fees for cash withdrawal.
You guessed correctly. If you spend $22.50 and ask for $20 cash back, you’ll get $20 and be charged $42.50. Shops like it because it reduces the cash in the drawer if they’re robbed. Shoppers like it as there’s no fee.
Debit cards are basically electronic checks. Back in the day of writing checks, if your total was $60, you could write a check for $80 and get $20 in cash back from the store.
Basically its the same concept. You pay the total required plus the additional amount, and then they give you that additional amount back in cash.
I honestly love questions like this. Simple, has an easy answer, OP didn’t know it for whatever reason, it is a super common thing, it is easily explained, OP appreciates the answers… learning something new every day.
Pretty much a ploy to get people to spend money.
I know Target does it. And it makes sense. They get people to come to the store and spend money. In exchange, you basically get a free ATM transaction.