Cashback or a promo code: which one saves you more

On paper a promo code always looks better: 15% off beats 4% cashback without a contest. In a real cart the answer is less obvious, because the two work on different numbers and under different conditions.

The arithmetic

A code reduces the price you pay. Cashback returns part of what you actually paid. So on a cart of 200:

a code for 15% saves 30 — you pay 170;
cashback of 4% returns 8 — you pay 200 and get 8 back.

The code wins here, and usually will. That is not the interesting part. The interesting part is how often the code does not apply at all.

Where the code loses

A discount that does not go through is worth nothing. Codes fail on the four usual grounds — expired, first order only, minimum amount, excluded categories — and those exclusions bite exactly where you spend most: electronics, sale items, gift cards.

Cashback has none of that. It does not expire, has no minimum, and does not care which category you bought in. A rate of 4% that always works beats a rate of 15% that works one time in five.

Where cashback wins outright

On some categories the rates are not small at all. Digital goods — books, subscriptions, software — carry the highest rates on our catalogue, and there codes are rare because there is nothing to discount: the price is already the price.

If a store shows a double-digit rate, it is almost always digital. That is the case where cashback is not a consolation prize but the better deal by a wide margin.

Use both, in the right order

They do not cancel each other out. The code lowers the price at checkout; cashback returns part of what is left. Both apply to the same order.

The only thing that matters is the order of actions: open the store through us first, then enter the code. Do it the other way round and you keep the discount but lose the cashback — the store sees the last link that brought you in, and that link will not be ours.

A rule of thumb