Faced with inflation, the “cash-back” or the promise to grab a few euros

PARIS: “When I do my shopping, I pot a few euros, it’s not nothing at the moment”: like Aurélie Pignon, some consumers distraught by the rise in prices have started “cash-back”, a little money pot system known in France, which still arouses mistrust.

Behind her screen, the 40-year-old checks as soon as she buys online that her iGraal extension is activated, whether on the websites of Fnac, Carrefour or Booking. Because this company of “cash-back” (“return of money”), champion of the French market, indeed promises to be recredited with a certain percentage of its expenses during purchases on the partner sites.

A scam ? No way. From 20 euros in her online kitty, Aurélie Pignon will be able to convert them into real money in her bank account, which she has already done on several occasions. “Honestly, when my brother told me about it, I couldn’t believe it. It was too good to be true!”, says this mother.

“It’s hard to make people understand how we work,” said AFP François Despruniée, marketing director of iGraal, for whom “the market in France is much less educated” than in Anglo-Saxon countries, d where the concept comes from.

“Cash-back” companies such as iGraal, Poulpéo or eBuyClub work for merchant sites as business introducers. Thanks to the attractive return on investment promised, “we will help to increase their clientele and their sales”, explains Mr. Despruniée, “In return, the stores pay us a commission, which we share with our users”.

Are we modest?

The system is far from new – iGraal was launched in 2006, eBuyClub in 1999 – but with the drastic rise in food or energy prices since the start of the war in Ukraine, it is experiencing a revival of interest.

“In recent months, we have seen tremendous growth,” confirms Jean-Paul Yildiz of eBuyClub, which has doubled since the start of the year its number of registered users – 4.4 million – and its purchase flows.

“Inflation unfortunately strengthens the positioning of cash-back sites like us”, he notes, because “the French are looking for easy good deals to lower the bill”. And the cash-back, which gives back on average 5 to 7% of its expenses to the user, allows according to him to “cancel or reduce” inflation by about 5%.

“It’s one way among others to limit the erosion of purchasing power,” confirms Olivier Gayraud, of the consumer association CLCV. But “except for exceptional purchases, such as large household appliances, we are talking about fairly small sums”, he nuances. Indeed, a user will save an average of 120 euros each year, says iGraal, about 200 euros boasts eBuyClub.

“These modest sums should not blur the consumer’s desire to compare” with other sellers without “cash-back”, sometimes more interesting for him, warns Mr. Gayraud, “nor encourage him to consume more than it needs”.

“Smart shoppers and moms»

An opinion shared by researcher Régine Vanheems, for whom cash-back has “a symbolic value for the consumer that is truly superior to a reduction coupon” – too “constraining in terms of dates and brands for a customer who wants freedom”– thanks to its “hard and stumbling currency”.

However, it considers it insufficient to compensate for the inflation affecting the most exposed households, especially since they are rarely the ones who use it, for lack of time.

“Promo hunters often don’t need it for their budget, but they use it to reflect on themselves as a smart buyer,” she deciphers.

These “smart shoppers”, eBuyClub knows them well: a population of “young urban connected people”, not interested in mass-market offers, but who activate their “cash-back” for trips, electronic equipment or ready-to- carry. Even if “moms” in trouble like Aurélie Pignon still constitute the bulk of the clientele.

But there is still “a fairly enormous potential” for recruitment, the “cash-back” only intervening according to Mr. Yildiz on 1-1.5% of total purchases – physical and online – in France, against 3% in the USA.

Next step: expand their cash-back offer in stores, where online banks – serious competitors of specialized sites – are increasingly positioning themselves.