How Do E-commerce Cashback Rewards Work?
E-commerce cashback rewards are enabled by thousands of online retailers employing a digital marketing tactic known as affiliate marketing. In affiliate marketing, retailers pay a small commission in the form of a percent of the purchase, to the entities (aka “affiliates”) which refer customers to them.
The affiliates could be anything: from a “study tips” influencer on YouTube, to a recipe blog devoted to clean eating, to a review website about hair coloring products - anything!
Retailers work with these affiliates because they already have a built-in audience for a retailer’s product vertical. In essence, brands short-cut the process of finding a relevant audience for their product, especially if it is very niche: it certainly makes sense for an organic coconut milk brand to work with the editor of the clean eating blog to promote that product line to the blog’s readers.
In the case of a cashback rewards program, they act as that “referrer” for retailers, capturing the attribution as the source of the sale, along with the ensuing commission. But instead of keeping the commission for themselves, the cashback platform passes along part of it or all of it back to the consumer who made that purchase.
Putting cashback rewards to work in the nonprofit world
A creative way to use the “rewards” generated from cashback rewards programs is to divert some, or all of those earnings into donations for a nonprofit. Much like Amazon’s Smile program donates 0.5% of purchases to a cause chosen by the shopper, earnings from a cashback rewards program can be applied to a nonprofit donation.
Put simply, cashback rewards can power a passive fundraising channel for the nonprofit, because the shopper doesn’t have to think about actively about making a donation. They don’t need to go to a donor’s site, choose an amount, then pay with their credit card. Instead, using cashback rewards to fundraise is a relatively seamless and non-transactional way, from the supporter’s standpoint, to donate money to the PTA, animal shelter, or other favorite nonprofit.
How nonprofits can benefit from the popularity of e-commerce
Instead of trying to build a complex rewards and donations engine on their own, nonprofits looking to maximize their passive fundraising efforts through donations from cashback rewards should look to partner with platforms that offer:
- A large retailer network, so supporters can earn from as many online shopping sites as possible
- The ability to properly track and attribute supporters’ completed purchases and cashback earnings
- Features which allow the nonprofit to be branded front-and-center as the donation recipient
For example, our partner Givebacks, a fundraising platform for over a million nonprofit 501(c)(3) organizations, is using our white label cashback rewards platform to fuel fundraising for good causes across the country, . The cashback earned from these online shopping features on Chrome and mobile Safari browser extensions will enable nonprofits that use the Givebacks fundraising platform to easily switch on passive fundraising efforts. Simply by shopping with the browser extensions enabled, supporters generate donations for their causes from their cashback rewards.
Tapping into supporters’ everyday ecommerce shopping activities to raise funds is not only straightforward, it generates a passive stream of donations that supporters can feel good about every time they shop online.
Tristan Barnum is CMO at Wildfire Systems, Inc. where she oversees the Marketing and Client Success teams. Before joining Wildfire in 2017, Tristan co-founded two startups, Tellient, maker of the first analytics platform built specifically for the Internet of Things, and Switchvox, to serve the rapidly growing SMB market for VoIP phone systems. Prior to Switchvox, Tristan pioneered the online delivery of digital media at MP3.com, which Vivendi Universal acquired. Her work included the design of new web services, handheld mp3 players, tablets and interactive TV. While at Vivendi, she was awarded a patent for a system that provides access to electronic works over a network. Tristan has also served as a mentor at non-profit EvoNexus, San Diego’s largest tech startup incubator.