Rebate debit cards are great ways for merchants to entice consumers into spending more, but they can also help you save money too. The allure of paying $200 for an item and then receiving a $100 rebate debit card in the post can make consumers feel as though they have been granted the deal of a lifetime.

The premise is simple, you spend a certain amount and you get rewarded. This could be in the case of store credit, a cashback offer or a preloaded prepaid debit card. You’ve probably seen big store chains like Harvey Norman or JB Hi-Fi offering these kind of cashback incentives, but they really are designed to make you spend more. But how much money will you actually get back. If you’re smart about your spending you can really maximise your reward.

The downside to rebate debit cards

On the surface, rebate debit cards seem pretty awesome. Spend money, get money. But what many consumers do not understand, however, is that rebate debit cards actually favour the retailers.

Below is a list of what every consumer should know about rebate debit cards.

Profit.
Rebate debit cards actually earn money for all parties involved. Not only does the merchant make money from the consumer’s initial purchase, but the rebate that is issued from that purchase benefits Visa and MasterCard.

This is because the merchants and their banks pay fees to the credit card companies to partake in their credit systems, and the credit card companies earn a fee for each transaction. This applies with standard purchase credit cards, standard debit cards, and rebate debit cards as well.

If a consumer never redeems their rebate, the merchant keeps the amount that would have been rebated, netting an overall profit.

Funds are retained.
Because the consumer is using money that is still in the merchant’s system, the funds that are connected to each rebate debit card remain in the merchant’s account until the consumer uses the card.

Similar to gift cards, rebate debit cards have an expiration date, which means that if a consumer received a rebate debit card but did not use it in time, the merchant retains possession of those funds for good. Just like rebates that are never redeemed, rebate debit cards that are never used net an additional profit for the merchant that issued the card. Recently introduced laws in Australia now mandate a 3 year expiry on all gift cards, so check the date on your card closely.

Balances are retained.
For consumers who are proactive in redeeming and then employing their rebate debit cards, it is normal to drain most of the funds from the card while leaving a small percentage left over. This can occur if merchants do not accept split transactions, which allow the rebate debit card holder to use exhaust the remainder of their rebate debit card and make up the purchase balance with another payment method. Often times, consumers who use rebate debit cards employ them once or twice and then forget about them, leaving sizeable balances that can no longer be accessed upon expiration. As with unredeemed rebates and expired rebate debit cards, these balances are retained by the issuing merchant and strengthen their bottom line.

How to earn a rebate on your debit card

If you’re on the hunt for some stores in Australia that offer cashback or bonus gift cards on their offers, you might want to check out these options:

ShopBack
This website lets you earn cashback when you shop online at over 500 stores. Some of the bigger retailers such as Booking.com, Chemist Warehouse, Apple, and more. You can also buy online gift cards from various brands like Kmart, Doordash, Google Play, and Harvey Norman, and get a nice little cashback on them too.

Cashrewards
Another website that gives you cashback when you shop online or in-store at hundreds of stores. It includes retailers like Amazon, eBay, The Iconic, and Catch. You can also buy gift cards from different categories like beauty, fashion, travel, and entertainment, and get cashback on them as well.

CommBank Awards
Available in the CommBank app, you’ll get sent targeted offers for your shopping. It includes some petrol stations and online alcohol stores, so keep an eye on your app to see if there’s any offers in there for you.

Check the fine print

So, before you get too excited about getting your hands on a rebate debit card, make sure you read the fine print closely and be 100% sure you understand what you’re signing up for. Compare a range of offers and see which one gives you the best value for your money. And don’t forget to use your rebate debit card within that 3 year time frame, because it’s no good if it expires before you spend it.