For brands, the biggest risk with loyalty and cashback partners isn’t the lack of sales they generate for you. It’s that they get paid for sales that you could have made anyway.
This concern is part of almost every debate surrounding these partnerships. While a brand foresees dependable revenue, high conversion rates, and access to motivated buyers, it also fears paying partners commissions for orders that were already in the shoppers’ cart.
Both sides can be right, but deciding whether the entire category is either good or bad is a mistake. It’s more important to identify whether a specific partner can create enough additional value to justify commission paid and any placement fees.
In my experience, making a decision is a lot easier when you stop debating the partner’s label, and instead examine the job they are doing throughout their entire customer journey. One partner introduces your brand to a valuable new audience; another convinces undecided shoppers to buy by giving them a reason. And a third might simply pop up at checkout to claim credit for a sale another channel earned. Undoubtedly, these three partners should not be paid the exact same way.
What value do cashback and loyalty partners bring to brands?
Cashback partners give back a portion of a shopper’s purchase such as cash or rewards. Loyalty partners on the other hand may offer points, miles, member benefits, charitable contributions or other incentives. Therefore in practice, there is plenty of overlap between the two.
These partners have a loyal audience that actively searches for value, allowing them to showcase a brand through various marketing channels or media types. For example, they can generate exposure through their website, an app, email, push notifications, or paid placements. Additionally they can give shoppers a compelling reason to choose one retailer over another.
That last point has a significant impact on the value of a cashback partner. A shopper may already want new luggage, but that doesn’t necessarily mean they’ve settled on your brand. When a cashback offer actively moves the buyer from a competitor to you, the partner isn’t just claiming credit for an inevitable transaction; they are creating demand your brand wouldn’t have seen otherwise.
Loyalty partners drive customer lifetime value by helping buyers stay committed to your brand and encouraging repeat purchases. A rewards program can motivate an existing customer to make a purchase sooner, fill up their cart, and choose the brand again instead of shopping around for alternatives. Well-structured loyalty and cashback partnerships can support both repeat purchases and customer lifetime value.
This is why I don’t think we should rule out the entire category because they’re seen as bottom-of-the-funnel. Yes, it’s a reason to be concerned but it’s not always the case.
How can attributed revenue overstate a cashback partner’s value?
Affiliate platforms are great at showing which partner got credit. But the dashboard isn’t good at showing what would have happened without the partner.
Let’s put this into perspective. A customer discovers a facial cream for acne through a creator on TikTok, reads two reviews, clicks a Google ad three days later, and finally decides to buy. At checkout, they open a cashback app and activate an offer. Under the last-click attribution model, the cashback partner receives the full affiliate commission, even though they entered the journey after the customer had already made their decision to buy the cream.
The sale and tracked revenue is real. But the partner’s actual value is far from what the report suggests.
This creates two problems: a brand overpays for the conversion, and budget shifts to a partner that closes the journey when it should go to the creator, publisher or channel that actually created the demand. And this is exactly how you end up with impressive revenue reports, but zero business growth.
Now, don’t forget about profit margins. Between commissions, shopper rewards, promo codes, network fees, and paid placements, cashback deals can get expensive really quickly. Take a closer look at the total cost before you celebrate your return on ad spend. A partner can bring in high sales, but they look much less appealing when you calculate the actual profit left on the table.
Identifying high-value cashback and loyalty partners
I think loyalty and cashback partners deserve their place when they can prove a form of value that the brand couldn’t build on their own. There are four scenarios where partnering with them makes perfect strategic sense:
- They introduce a relevant audience
A cashback or loyalty partner with a distinct and engaged audience can be a very valuable acquisition channel. The real test isn’t the size of their audience; it’s whether those users are actually new to your brand.
Start off by looking at new-customer rates, but don’t stop there. The goal is to benchmark these users against your normal acquisition mix by tracking KPIs such as average order value, long-term retention, and their ability to help you launch a new product category.
From what I’ve witnessed on the brand side, you can’t assume every first-time buyer is incremental. Oftentimes, the customer was already on their way to checkout via email or paid search. A high-new customer rate truly becomes valuable when the analytics show that the partner started the journey or kept the momentum going.
- They guide the shopper away from the competitor
Cashback is effective in competitive categories where shoppers can compare similar offers. It might not be that big of a discount, but it becomes a tiebreaker when someone is stuck choosing between you and a competitor.
Review analytics on search behavior, competing-brand overlap, time to conversion, and the sequence of touchpoints. These key figures can help identify if the partner actually influenced the buyer’s choice, or if they arrived after the decision between you and your competitor was already made.
- They drive long term customer retention
If your brand wants to improve its repeat purchase rate or re-engage with passive customers, having a loyalty partner on board might be the answer. However, your campaign must be designed around this goal from the beginning.
You can’t just launch a generic promo and hope it targets the right people; the incentive needs to be strategically structured to trigger a second or third transaction.
Let’s say a customer bought 3 bags of coffee beans from your brand, but hasn’t ordered anything in the last 90 days. At this point, it kinda means they are on the verge of forgetting about you. To win them back, you partner with a rewards app that your target audience frequently uses. You push a time sensitive, exclusive “welcome back” offer that gives them points towards their next restaurant dinner if they place an order for their favorite blend today. By showing up when their stock is running low, and pairing that timing with an irresistible lifestyle reward, the partner helps break their hesitation and win them back.
- They help you scale fast and efficiently
A partner doesn’t have to be the first touch point to add value. The efficient revenue you gain from high-volume cashback and loyalty partners can help bankroll initiatives such as content partnerships and creator testing.
This is why data matters more than assumptions. According to a benchmark report by PartnerCentric, loyalty and reward partners had an average 69.2% incrementality score, while cashback scored 55.81%.
Now these figures aren’t a guarantee for every brand or partner. But they do show why these two partner categories need to be measured rather than just dismissing them.
What are the warning signs of a low-value cashback partner?
There are some red flags you can look out for to understand whether the loyalty or cashback partner is worth it. The most obvious one is a very high share of conversions, but the partner only appears at the end of a journey that started elsewhere. This pattern doesn’t automatically make the partner worthless, but it definitely means you shouldn’t pay them full price.
Other warning signs include:
- Revenue is increasing on the partner dashboard, but your total business revenue isn’t growing
- You’re looking for new customers but the partner is mostly bringing in existing customers
- Loyal customers are using rewards on purchases they would make anyway
- Sales spike when you increase cashback rates or offer bigger discounts
- The partner is constantly overwriting tracking codes from creators or content sites
- Performance decreases outside of branded search or peak holiday seasons
I also wouldn’t ignore concentration. It looks great on the outside if one or two cashback partners are responsible for the majority of the revenue. However, the reality is you’re not actually scaling; you’re depending on the very end of the funnel.
Optimize how you work together with your partners by tweaking commission rates, setting specific terms by product category, testing selective placements, and building a healthier partner mix around them.
How do you evaluate a cashback or loyalty partner?
Once you know what to look out for, turn the evaluation into a fair test. Make sure both you and your partners agree on how to measure results before the performance numbers come in.
Start by defining what success looks like for your brand. Perhaps the goal is a profitable increase in sales, or a strong performance during a slow period. Choose one primary outcome and a few supporting metrics because the campaign can’t resolve every business problem and the final report will be unclear.
Then take into account the full cost of the partnership including commissions, customer rewards, discounts, network fee, and any placement fees, while making sure to separate everyday performance from paid promotional periods.
You also need to compare the campaign with a useful baseline. Look at similar periods when the offer wasn’t live, or review how similar customers behaved when the promotion wasn’t active.
Don’t make any drastic changes to the campaign immediately after launch. Avoid changing commissions, offers, or creatives – especially at the same time. If you change everything all at once, there’s no way to know what caused the sales to move.
Give the test enough time to reflect the brand’s normal buying cycle, and then review the results at business level; not just inside the affiliate platform. The goal should be to track the overall revenue or actual profit moved, if another channel dropped at the same time, and whether those customers will stay loyal if the offer disappears.
I witnessed this firsthand while working with a premium running shoe brand. Buying a high performance running shoe isn’t a spur-of-the-moment decision. Some people will spend weeks reading reviews, looking for feedback on YouTube, and comparing fits before pulling the trigger.
If you only run the offer for three days, the massive spike on your sales dashboard will sure look impressive. But then, when you look at the overall business data, you might notice you didn’t create any new demand. It was the same shoppers who already had the sneakers in their cart. Extending the results for about 30-45 days ensures you measure real decisions, and not transactional flukes.
The test outcome doesn’t mean you either need to expand or end the partnership. You can take other approaches such as lowering the standard commission, while offering a bonus for a defined result. The best way to approach this is to build the agreement around where your partner performs best, and review the terms regularly as the program changes.
How can brands measure the true impact of cashback partners?
Even brands using established affiliate platforms like Awin, Impact or CJ can struggle to turn their data into a cohesive strategy. These platforms show which partner received credit for a sale, but they don’t always answer every question about the impact they’ve had on the business. Program managers need to know which partner had an influence on the sale, if the commission is fair, and how the overall partnership supports the brand’s wider goals.
To understand the full picture, teams need to be able to compare their reports to multiple sources of data such as GA4 or Shopify. Yes, it could be manageable for a smaller program, but the manual process becomes dreadful when there are thousands of transactions and several marketing channels within the program.
Thankfully there are agencies out there that can help connect these different pieces of data. For example, PartnerCentric manages programs across external affiliate platforms and uses its Fuse™ technology to track the exact click-by-click path and understand how much each partner is contributing to a sale. This helps the team review individual partner performance and make strategic decisions based on real data rather than assumptions.
Beyond showcasing how much each publisher contributed, the technology can also identify specific tracking problems. Fuse Precision™ compares network reporting with data pulled from sources like GA4 for network transactions, while Fuse CLO Precision™ can catch duplicate commission claims when the same order was credited to both a card linked offer and another affiliate partner.
The goal isn’t to add another dashboard or make a brand switch platforms. It’s to make the data that’s available more useful, so program managers can adjust payouts, stop duplicate fees, and make smarter decisions about where to invest money.
Loyalty and cashback partners need to earn their place
I’ve seen multiple brands collaborate with loyalty and cashback partners, and they can absolutely be worth including in an affiliate program. But what I have learned is that their value should come from the business results they help create, not just the dollar signs next to their name.
The strongest and most successful programs aren’t the ones with the biggest list of partners or highest attributed revenue. They’re the ones where every single partnership has a clear purpose, reasonable economics, and clean data to back up the investment.
This is the playbook that I use. Test the partnership fairly, look past the basic affiliate dashboard, and use a reliable tool to adjust your terms based on what the data shows. If a cashback or loyalty partner grows your business after every cost is considered, it deserves room to run.