Who Pays For My Credit Card Rewards? | CA Rachana Ranade
Published: 2023-04-01
Status:
Available
|
Analyzed
Published: 2023-04-01
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Restaurants, especially newly opened ones, may bear up to 100% of the cost of credit card rewards as a customer acquisition strategy. Credit card companies might contribute a smaller percentage (e.g., 10-20%) depending on bargaining power.
"100% of the reward will be born by the restaurant if they have a good bargaining power it can be something like a 90% restaurant and a a 10 percent cost which will be borne by the by the credit card company 80-20 whatever but ideally it could be up to 100% which will be born by the restaurant"
Pending
Brands like Samsung may cover the full cost of credit card rewards as a customer acquisition cost when partnering with specific credit card companies for promotional offers.
"here we may say that the credit card company will say okay this this is what we will charge we will not be able to you know pay anything for the cashbacks so it will be Samsung as a brand who would be paying for the rewards and who will ensure that they get more and more new customers or we call such a cost as a customer acquisition cost"
Pending
Retailers like Dmart may bear the cost of credit card rewards during festive periods primarily for customer retention, rather than customer acquisition.
"Dmart ties up with ICICI credit card or HDFC credit card or with any other credit card company then who will bear the cost ideally logically again it will be Dmart who will be bearing this cost and this will be not a cost of customer acquisition but ideally it should be a cost of customer retention."
Pending
In strategic partnerships between major brands (e.g., Amazon and ICICI), the cost of rewards or cashback may be shared between the partners, with the specific percentage determined by their respective bargaining power.
"There could be a sharing it could be like let us say the reward or let us say whatever is a cashback amount might be shared like 50-50 ICICI will bear it fifty percent Amazon 60-40- 70-30 whatever as per their own bargaining power"
Pending
Individuals who consistently pay only the minimum amount due on their credit cards indirectly fund the credit card companies, which in turn use these funds to offer rewards and cashbacks.
"there could be people who always pay only the minimum amount due on the credit card if that is done then an interest is levied by the credit card company to the person and this is how this person I mean any person would keep on funding the credit card company and through these funds only credit card companies can give you rewards right"
Pending
Penalties for late or non-payment of credit card bills generate income for credit card companies, which can then be used to fund reward programs for customers.
"if you have to pay for the penalty this will be the income for the credit card company and that is how they can use these funds to give you or some other people cashbacks and Reward Points"
Pending
In cases where a newly opened restaurant offers credit card rewards to acquire customers, the restaurant is expected to bear 100% of the reward cost, or at least a significant majority, rather than the credit card company.
"100% of the reward will be born by the restaurant if they have a good bargaining power it can be something like a 90% restaurant and a a 10 percent cost which will be borne by the by the credit card company 80-20 whatever but ideally it could be up to 100% which will be born by the restaurant"
Pending
When a brand like Samsung partners with credit card companies for cashback offers on product purchases, it's typically the brand that bears the cost as a customer acquisition strategy, not the credit card company, dealer, or customer.
"Samsung generally has tie up with different different credit card companies for example this month they may run an offer with ICICI credit card next month they may run an offer with HDFC credit card next Monday whatever different different credit card companies so here we may say that the credit card company will say okay this this is what we will charge we will not be able to you know pay anything for the cashbacks so it will be Samsung as a brand who would be paying for the rewards and who will ensure that they get more and more new customers or we call such a cost as a customer acquisition cost"
Pending
When a retailer like Dmart offers festive cashback promotions with credit card companies, Dmart is likely to bear the cost as a customer retention strategy, especially during peak shopping times like Diwali.
"Dmart ties up with ICICI credit card or HDFC credit card or with any other credit card company then who will bear the cost ideally logically again it will be Dmart who will be bearing this cost and this will be not a cost of customer acquisition but ideally it should be a cost of customer retention."
Pending
In strategic partnerships between major brands and credit card companies, such as Amazon and ICICI, the cost of rewards or cashback may be shared between the two entities, with the exact percentage determined by their respective bargaining power.
"There could be a sharing it could be like let us say the reward or let us say whatever is a cashback amount might be shared like 50-50 ICICI will bear it fifty percent Amazon 60-40- 70-30 whatever as per their own bargaining power"
Pending
Individuals who consistently pay only the minimum amount due on their credit cards indirectly fund credit card companies through levied interest, which in turn allows these companies to offer rewards and cashbacks.
"the interest is levied by the credit card company to the person and this is how this person I mean any person would keep on funding the credit card company and through these funds only credit card companies can give you rewards right"
Pending
Penalties for late or non-payment of credit card bills serve as income for credit card companies, which can then be utilized to fund cashback and reward point programs for customers.
"if you have to pay for the penalty this will be the income for the credit card company and that is how they can use these funds to give you or some other people cashbacks and Reward Points"
Pending