Cashback or an instant discount: which saves you more?

What is the difference between an instant discount and cashback?

You see an instant discount before you pay. You type the code, the total goes down, and you pay the lower amount. This is what usually happens at Namshi and Mumzworld, where the code comes off the total in the order summary or on the checkout page.

With cashback, you pay the full price. Part of it then comes back after the order, usually as credit in your account with the store, not as money in your bank account. So the saving is delayed, and it is really a discount on a future order.

Some stores offer both. At ToYou, for example, some offers lower the amount you pay, and others are cashback that comes back after the order is done. So read the offer's description before you order to know which type it is.

See also: Types of promo codesAll codes

How does cashback work as store credit?

noon is a clear example. A discount code there gives you cashback in most cases, so the price doesn't change at checkout. When the order reaches you, the amount is added to your noon balance, and you spend it on a later order.

So don't worry if the total stays the same. Just look for the message at checkout saying the code was accepted, then open your account after delivery and make sure the credit was added.

At other stores, the credit takes a different form. At Styli, for example, there are points called Styli Cash, which expire, and you can pay no more than half of an order with them.

See also: noon page and codes

What terms on cashback credit should you know about?

Cashback isn't money in your pocket; it is a delayed discount with terms. These are the main ones:

• It is usually spent at the same store. At Namshi, for example, cashback can't be withdrawn as cash or moved to anyone else's account.
• It can expire. Offer credit at Nice One, for example, is valid for a set time, and you can see its end date in your account.
• It may be cancelled if you return the order. This is often the case, since the cashback is tied to that order, so check the store's terms before you send anything back.
• It takes time to arrive. At noon it waits until the order reaches you, so you can't spend it on the same order.

Treat cashback as a voucher for your next order, not as money in your account.

Which one saves you more in the end?

Comparing the two percentages isn't enough. A higher cashback rate only means a bigger saving if you actually spend the credit, and on something you would have bought anyway.

If a store offers both at the same time, work out the difference in riyals, not in percentages: how much you pay now, how much comes back, and when. Then think about these questions:

• Will you buy from the same store again before the credit expires?
• Do you need the money now? With cashback you pay the full amount today, and the saving comes later.
• Does the code have a cap? Some instant codes set the most they will take off, as at Namshi, so the discount on a large cart can be smaller than you expect.
• Do you shop at this store often? If so, the credit turns into a real discount on your next order.

See also: How to tell a real discount

How does bank-card cashback work? The SAB noon Visa card as an example

There is another kind of cashback that comes from the card you pay with, not from a store code. The SAB noon Visa card is one example. It gives back 10% of what you spend at noon and its sister services, Namshi among them, as noon credit, up to SAR 1,000 a month.

On what you buy elsewhere, it gives back 1% for purchases inside the Kingdom and 2% for international ones. In return, you pay an annual fee of SAR 199, with VAT added on top.

So the sums work differently from a store code. The annual fee is fixed, while the cashback grows with what you spend. If you buy little from noon, what comes back may not cover the fee; if you buy a lot, the picture changes. The decision is yours.

Source: SAB noon Visa card: noon help page

Can a promo code and card cashback add up?

In many cases yes, but check before you count on it. A store code lowers the order itself, and the bank works out card cashback on what you spend with the card, so the two don't usually clash.

Tell card cashback apart from an instant bank offer, though. At noon, for example, the help centre says that the bank-card discount shown at checkout can't be combined with a promo code or with noon credit. So if you see a bank offer at checkout, compare it with the code and pick one of them.

With card installments, the two official pages disagree: noon's help centre says an installment order earns the SAB noon Visa cashback, while SAB's page says installment plans earn none. If this matters to you, ask the bank before you choose installments.

Source: Bank offers: noon help page

When does an instant discount beat cashback?

When you buy once from a store you rarely visit. The credit that comes back may sit in your account until it expires, so you don't really save anything.

An instant discount is also clearer if you expect to return part of the order. At Mumzworld, for example, a return refunds what you actually paid after the discount, so the sums are simple.

And if your budget is tight this month, an instant discount lowers what you pay now, while cashback moves the saving to a future order.

If a store offers an instant discount and cashback at the same time, ask yourself one question: will I be back at this store soon?

See also: All stores