Wednesday, September 23, 2015

Indians – Will you donate your CashBack?



          Today’s post is inspired by Operation Sulaimani and a heart to heart discussion with my 12 year old son along with his cousins.
          Ganesh Chaturhti season is over. Shopping volumes zoom during Dusshera and Diwali festivals.
          All eCommerce players have expanded their portfolio range and strengthened their delivery channels.
          The key tool to attract shoppers is the ‘CashBack’, schemes.

Q: What is ‘CashBack’?
Ans: In simple terms, ‘CASHBACK’ means credit back of some percentage of the buying price to the buyers account.
These ‘CASHBACK’ can be utilised for future purchases on participating sites.

Q: Which is better ‘CASHBACK’ or ‘Discount?”
Ans:  Customer angle: Discount, as the benefit is immediately visible and he/she need not shop on the same sites once again.
eCommerce Site angle: ‘CASHBACK’ as, ‘CASHBACK’ increases the stickiness quotient of customers coming back.

Q: What is the major drawback of ‘CASHBACK’?
Ans: ‘CASHBACK’ expires if not utilised within specified period. This period differs from site to site.

Q: What is the alternate to avoid expiration of ‘CASHBACK’?
Ans: Facility to donate the ‘CASHBACK’ to NGOs

Q: Can a part of existing ‘CashBack’, also be donated.
Ans: Yes, the eCommerce sites should design their payment page accordingly.

Q: What type of NGOs would be willing to receive ‘CASHBACK’ Donations?
Ans: Any NGO working in the area of food distribution, Old Age Homes, Orphanages etc

Q: How can eCommerce sites choose the NGOs?
Ans: Separate extensive due diligence need not be done by eCommerce sites.
They can choose from the list  Ramon Magsaysay Awardees winners or Padma Award winners
Crowd Funding sites too are good option

          I am expanding the above idea into a fully fledged business proposal to submit to The Economic Times Power of Ideas, India’s largest entrepreneurship program
Nine  benefits of donating ‘CASHBACK’ :

01)  The ‘CASHBACK’ is the property of buyers and the sellers hold the same in good faith
02) No financial loss to the buyers as the full price of the article is already paid by them.
03) Psychological satisfaction of contributing their bit to the public at large
04) Part of ‘CASHBACK’ at the time of  the payment can be split amongst the buyers wallet and NGO wallet
05) No loss to eCommerce site, as the ‘CASHBACK’ is already factored in their books.
06) Increase customer retention levels, as customers would prefer to complete their purchases on eCommerce sites offering the best ‘CASHBACK’ transfer options.
07) Increase of sales, as NGOs will be interested to immediately purchase  through the ‘CASHBACK’ credits in their wallets
08) A differentiator tool for eCommerce sites in their branding exercise
09) A new stream of donations to the NGOs

INR 2,000 Crores to be distributed through CashBack