Diwali special: Don't let cashback discount offers take you for a ride

It is that time of the year when retail stores lure you with mouth-watering discounts. Companies and showrooms put out a zillion offers, promising more bang for your buck. Over the last few years, owing to this, shopping during the festival season has become more of a habit. Even if you are not getting a bonus due to the currenct gloomy economic conditions,we are tempted to splurge for we have credit cards now, which also means we are piling up debt. So, before getting lured by those offers, it would be sensible to do a reality check and find out what these offers mean. Devil is always in the detail. Here we take a look at the cash back offers.

What’s out there: There are a number of cash back deals, some online others offline. And the offers are across products and services – mobiles, tablets, digital TV and apparels, fine dinning, movies and entertainment, holidays. For instance, you could get 10 percent cash back on purchase of Rs 10,000 or more on Flipkart for shopping with Standard Chartered cards. Axis Bank has cash back offer across brands like Amazon, Ezeego and Pantaloons. Matercard offers 5 percent cash back on clothing on Flipkart. Indusind Bank card gives 4 percent on domestic holidays on Makemytrip.com. ICICI Bank is giving top spender every hour on Credit and Debit Card a cash back of 10,000. HDFC Bank is giving 15 percent cash back on booking for Rs 3,000 at Makemytrip.

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[caption id=“attachment_624989” align=“alignleft” width=“380”]  Axis Bank has cash back offer across brands like Amazon, Ezeego and Pantaloons. Matercard offers 5 percent cash back on clothing on Flipkart. Reuters[/caption]

These are just a few examples. Each bank has a different offer across various cards. But remember each offer comes with some term and conditions which you need to fulfil to be eligible for the offer. Decoding each offer is an impossible task. Here is a list of things you should know about such offers.

1) Percent: More often than not, the cash reward is usually a fixed percentage of the amount you spend. For example, if you spend Rs 20,000 on a smart phone, you get Rs 3,000 in return. So, the smartphone actually cost you Rs 17,000.

2) You need to pay dues in time: Many a time fine print says that you can get the cash back only if you pay your dues on time. Which means, if you are late in making the payment or miss one instalment, you will not be eligible to get the discount.

3) Limited validity period: Keep in mind that most of these offers are available for a limited period only. And, once that period is over, you won’t be able to avail the discount. Take for instance, ICICI Bank cash back offer mentioned above. It is for a limited period from October 5 to November 5, 2013.

**4) Minimum amount:**Also remember, that most banks require you to spend a minimum amount on your card to qualify for a cash back benefit. For instance, Standard Chartered bank’s cash back offer on Flipkart is for a purchase of Rs 10,000 or more. So if you buy an item worth say Rs 9,990, you might just lose out.

And finally, keep an eye on how the bank plans to redeem the amount to you. Some banks return the money the next month, while others have a predetermined period for payments. Most banks let you redeem the cash back amount against your outstanding statement or bill of the card. In some banks, the accumulated amount appears under the saving summary on your statement, which you can redeem by placing a call to the bank.

We are no way suggesting that all cash back offers are not genuine, but most do come with certain terms and conditions, and knowing them in advance is better than getting taken aback later. So ensure that you know the conditions that apply and actually get that cash back discount. Happy Diwali Shopping!