Cashback

Definition

Cashback is a return of part of the purchase price to the buyer in the form of bonuses, points, or money; on Kaspi.kz this is most often credited as bonuses/points to the buyer's account, which can be spent within the ecosystem. For a seller, cashback is a demand-stimulation tool that affects the price visible to the buyer, conversion, and the cost of sale.

How cashback works: mechanism and roles

The mechanics of cashback on a marketplace look simple, but they include important operations that affect the seller's financial outcome.

• Buyer sees an offer showing a cashback percentage or bonus amount and decides to buy.
• Marketplace (Kaspi.kz) credits bonuses to the buyer's account after confirmed delivery and absence of return, or immediately as promo bonuses. The marketplace often controls the conditions and timing of the crediting.
• Seller compensates cashback in two ways: directly by subsidizing the marketplace or by rolling the cashback cost into the product price. Sometimes the marketplace itself finances part of promotions, but the seller must account for commission and returns.

Key parameters to monitor: cashback rate, target audience of the promotion (new vs returning buyers), bonus validity period, refund/cancellation rules, and the method of reimbursing the seller.

Why sellers use cashback — effects and numbers

Cashback directly changes buyer behaviour. In practice, sellers in Kazakhstan report the following effects when promotions are set correctly:

• Higher conversion. From Kaspi.kz sellers' experience, 3–5% cashback yields a conversion uplift of 10–30% depending on category. For consumer electronics and small gadgets the effect tends to be 15–25%.
• Bigger average order value. Offering cashback often raises the average check by 5–20% when accrual thresholds are linked to order amount (for example, bonuses only from 20,000 KZT and above).
• More repeat purchases. If cashback is issued as bonuses within Kaspi's ecosystem, customer LTV can increase by 15–40% thanks to repeated spending of bonuses over 3–6 months.
• Lower perceived price. Customers see "I get bonuses" and perceive the deal as more attractive, which matters in highly competitive categories.

Important: these figures hold when margin is controlled. If a seller adds cashback on top of existing costs without calculation, margin can quickly disappear and the promotion may become unprofitable.

Examples and calculations on Kaspi.kz

Below are simplified examples to demonstrate how to account for cashback impact. Use your own numbers (purchase price, fee rates, returns) for exact results.

1) Subsidized cashback (seller pays the marketplace)

Assume:

• Selling price: 50,000 KZT
• Cost of goods sold (COGS): 35,000 KZT
• Marketplace commission: 8% (on selling price)
• Cashback offered: 4% (2,000 KZT)
• Return rate: 5%

Calculation per unit (simplified):

• Gross margin before cashback = 50,000 - 35,000 = 15,000 KZT
• Marketplace fee = 50,000 * 0.08 = 4,000 KZT
• Cashback paid (seller) = 2,000 KZT
• Net margin = 15,000 - 4,000 - 2,000 = 9,000 KZT
• If returns are 5%, account for lost margin and refunded cashback — adjust P&L accordingly.

If cashback lifts conversion enough to increase volume, fixed costs are spread over more units and profitability can improve despite lower per-unit margin. Calculate the break-even increase in sales needed to cover the subsidy.

2) Inflated price to cover cashback

Alternative: the seller increases the listed price so the marketplace or the seller's margin covers cashback. This changes buyer perception and competitiveness. Example:

• Target visible price remains 50,000 KZT, but seller sets list price at 52,000 KZT and offers 4% cashback on the 52,000 KZT price (2,080 KZT), so effective price seen by buyer is ~49,920 KZT. Seller transfers part of the cost into price instead of direct subsidy.

Be cautious: raising price can hurt Buy Box competitiveness and search ranking if competitors offer lower prices without cashback.

3) Thresholds, caps and bonus-style cashback

Using accrual thresholds (cashback only for orders above a certain value), caps on maximum bonus per order, and issuing bonuses rather than cash reduces the real cost because not all bonuses are redeemed and users redeem them over time.

Practical tips for sellers: how to run cashback without losses

• Start with a pilot: test cashback on a small SKU set or a single category to measure real uplift and return behaviour before scaling.
• Segment targeting: offer higher cashback to new customers or on high-margin SKUs; avoid subsidising low-margin items.
• Use thresholds and caps: require a minimum order value for cashback, limit maximum bonus per order, or tie cashback to bundles to increase AOV.
• Prefer bonuses over cash: in-ecosystem bonuses reduce immediate cash outflow and often have partial redemption.
• Set clear rules for refunds: configure automatic cancellation of bonuses or clawback rules for returned orders.
• Define KPIs and budget: set success metrics (conversion lift, CPA, payback period) and a maximum promo budget; stop or adjust campaigns that miss targets.
• Run A/B tests: verify which cashback levels, durations and audiences perform best, then scale winners.

Risks and how to minimize them

Main risks:

• Margin erosion. If cashback is set without margin calculation, promotions become unprofitable.
• Fraud and abuse. Accounts or orders created solely to claim cashback.
• Increased returns. Buyers might purchase more impulsively and return goods, increasing reverse logistics costs.
• Price positioning loss. Artificially increased prices to fund cashback can hurt competitiveness.

Mitigations:

• Limit cashback to target groups and SKUs with sufficient margin.
• Use verification and monitoring to detect suspicious patterns (many returns from same account, clustered orders).
• Require minimum order value and set bonus caps.
• Issue bonuses (not cash) and set expiration to encourage redemption but limit long-term liability.
• Monitor ROAS and unit economics continuously and be ready to pause campaigns that worsen profitability.

Control and analytics: what to measure

Track both short- and long-term indicators:

• Conversion uplift on promoted SKUs vs control group.
• Change in average check and share of basket value affected by cashback thresholds.
• Repeat purchase rate and LTV uplift over 3–6 months.
• Return rate and refund costs on promoted items.
• Effective cost of cashback per incremental sale (CAC for the promo).
• Net margin after fees, cashback, returns and any marketplace co-funding.

Important: exclude orders still in the return window from final performance metrics. Build reports that show "clean" sales after returns are settled.

Short use scenarios (real cases)

• Acquiring new customers: 5% cashback for first-time buyers on a category resulted in a 22% conversion lift; acquisition cost justified if repeat rate rose within 6 months.
• Bundling accessories: Cashback on accessory when bought with main product increased accessory attach rate and improved overall margin because accessories had higher gross margin.
• Seasonal push with marketplace co-funding: During a festival campaign the marketplace subsidized part of cashback, reducing seller burden and boosting visibility.

Conclusion

Cashback is a powerful lever on Kaspi.kz to boost conversion, average order value and repeat purchases, but it must be used strategically. Calculate unit economics, pilot test, target offers, prefer bonus accruals and control refunds to protect margin. With disciplined analytics and clear rules, cashback can be a scalable growth tool rather than a margin sink.