A cashback loyalty program is a rewards program that gives customers a set share of each order back as store credit or reward money they can spend only with the brand that paid it.
At a 5% rate, a $400 order earns $20 toward the next one. It is a customer loyalty program that rewards in money rather than points, and on Shopify the money sits in Shopify's own store credit. Program terms below come from each program's own pages, and Shopify's rules from its Help Center, on November 13, 2026.
TL;DR: A cashback loyalty program pays customers a share of every order back as credit they can spend only with you: from 1% to 10% across the six well-known programs below, with four of them between 2% and 5%. On Shopify it runs on Shopify's own store credit: a paid order earns the reward, it is held through your return window, and Shopify applies it as a payment at the next checkout, online, at Shopify POS and in the Shop app. Smile is our pick for Shopify Plus brands that want cashback in their own name, set up by our team: Smile Cashback, now in early access, pays a share of every paid order back as Shopify store credit in your brand's name, with a holding period, an expiry and reminder emails. More Shopify Plus brands run loyalty on Smile than on any other platform (Store Leads, October 2026).
How a Cashback Loyalty Program Works
A cashback program moves each reward through six steps, from the order that earns it to the date it lapses. The right-hand column shows how Smile Cashback runs each step (November 2026).
| Step | What happens | In Smile Cashback |
|---|---|---|
| 1. Earn | A paid order earns a share of its value at the brand's rate, less anything excluded | You set the rate and what counts toward it, and exclude products, collections, tags or sale items; gift cards and tips never earn. Product pages show what each item earns |
| 2. Hold | The reward waits through the return window, so returned orders never pay out | A holding period through your return window. Refunds, cancellations and order edits shrink the reward, with nothing to reconcile by hand |
| 3. Land | The credit reaches the customer's account | Shopify store credit in your brand's name. The thank-you page says what the order earned and when it lands; the account page shows the balance, pending credit and expiry |
| 4. Remind | Emails bring the customer back before the credit runs out | Reminder emails before credit expires, by default 30, 7 and 1 day before |
| 5. Spend | The credit pays toward a later order | Shopify applies the balance as a payment, up to the order total, online, at Shopify POS and in the Shop app, when the customer is signed in |
| 6. Expire | Unspent credit lapses on its date, if one is set | Expiry from 14 days to five years, or never |
Brand Cashback vs Shopper Cashback
Most search results for cashback are about shopper cashback: sites, apps and cards that pay people back for buying almost anywhere. A cashback loyalty program is a brand's own reward.
| What differs | A brand's cashback program | Shopper cashback sites and cards |
|---|---|---|
| Who pays it | The brand, from its own margin | A cashback site, from the commission a store pays it; or the card issuer |
| Paid as | Store credit or reward money | Cash: PayPal, a check, a statement credit or a bank deposit |
| Where it can be spent | Only with the brand | Anywhere |
| What it rewards | Coming back to the same brand | Buying through the site, or paying with the card, at any store |
| Examples (November 2026) | REI's member reward, Kohl's Cash, Dell Rewards | Rakuten Cash Back, the Citi Double Cash Card |
Rakuten says stores pay it a commission for sending shoppers its way, and it shares part of that with members as Cash Back, paid every three months. The Citi Double Cash Card pays 2% on purchases: 1% when you buy and 1% as you pay (both read November 13, 2026).
For a brand, credit that only spends with you is a reason to come back, and it costs you only when the customer does. A shopper cashback site works more like an affiliate channel: you pay a commission on the sale, and the shopper spends the reward anywhere.
How Much Cashback to Offer
Between 2% and 5% of each order is where most of these well-known programs pay: Costco pays 2%, Dell 3%, Kohl's 5% and Chewy+ 5% on dog and cat food and health items, with REI's typical 10% at the top and 1% storewide at Walgreens at the bottom. Each figure comes from the program's own pages, November 2026.
| Program | Cashback rate | Paid as | Timing |
|---|---|---|---|
| REI Co-op | Typically 10% of eligible full-price purchases, not guaranteed | An annual Co-op Member Reward | Once a year, by March |
| Kohl's Rewards | 5% of every purchase, 7.5% with a Kohl's Card | Kohl's Cash, issued in $5 steps | On the first of the next month, with 30 days to spend it |
| Chewy+ (paid membership) | 5% on dog and cat food and health and pharmacy items, 2% on the rest | A rewards balance, up to $100 a year | Final once the order ships; expires after 12 months |
| Dell Rewards | 3% of Dell.com purchases, before tax | Rewards redeemed at checkout | About 30 business days after the order ships; expires at the end of the sixth month after purchase |
| Costco Executive Membership (paid) | 2% of qualified purchases, up to $1,250 a year | An annual 2% Reward | Issued about three months before the membership renews |
| myWalgreens | 1% storewide, 5% on Walgreens-branded products | Walgreens Cash, redeemed in steps from $1 | Expires 12 months after it is earned |
What the six programs show:
- Rates come with limits. REI pays on eligible full-price purchases only, and Chewy+ and Costco cap the reward and charge a membership fee.
- The rate can follow the product. Walgreens pays 5% on its own brand, and Chewy+ pays 5% on dog and cat food and health items and 2% on the rest (terms updated October 5, 2026).
- The reward waits before it spends. Dell posts rewards about 30 business days after shipping, Kohl's converts them on the first of the next month, and REI and Costco pay once a year.
- Expiry varies widely: 30 days for Kohl's Cash, about six months at Dell and 12 months at Chewy+ and Walgreens.
To set your own rate:
- Pick a budget as a share of revenue, such as what discount codes cost you today.
- Divide it by the share of credit you expect to be spent. Rate = budget ÷ share spent. A 2.5% budget with half the credit spent supports a 5% rate.
- Check the worst case against your gross margin. If every credit is spent, a 5% rate costs 5% of revenue.
- Exclude what can't carry it: sale items, gift cards and low-margin lines.
- Hold credit through your return window and set an expiry, so you pay only on kept orders and every balance has an end date.
- Count Shopify's fee where it applies. For Shopify stores created on or after May 12, 2025, orders that include store credit are charged third-party transaction fees "on the order amount paid for using store credit" (Shopify Help Center, November 13, 2026).
The illustration on Smile's Cashback page uses 5% on a $400 order: $20 of credit. For what that costs next to a 20% code, see store credit vs discount codes; for the wider budget, how much a loyalty program costs. Then judge the rate by repeat orders; our guide to increasing repeat purchase rate with loyalty shows how to measure them.
How Shopify Store Credit Works for Cashback
Shopify store credit is the balance a cashback program pays into, and Shopify's Help Center lists "a reward or incentive, such as a loyalty or referral program" among the reasons to issue it. The rules that matter for cashback, read November 13, 2026:
- It is a payment method. Shopify holds each customer's balance and offers it at checkout as a way to pay.
- Customers spend it signed in, through customer accounts or Shop Pay. Legacy customer accounts can't use it.
- It spends on the online store, Shopify POS and the Shop app, not on other sales channels, draft orders or edited orders.
- The full balance applies, up to the order total; customers can't choose part of it. You can issue less than $15,000 USD of credit to one customer account.
- Expiry is set on each issuance. There is no store-wide default, and the credit that expires first is spent first. Shopify advises checking local laws before setting expiry dates. For the accounting and the law, see store credit liability, breakage and expiry.
- You can segment and report on it: customer segments by balance, upcoming expiry and last credit date, and an Outstanding store credit balance report.
The rest is the program's job: what each order earns, the hold through returns, issuing the credit and the reminders. Shopify's full rules, subscriptions and currencies included, are in our store credit and discount code guide.
How to Offer Cashback on Shopify
There are three ways to pay cashback into Shopify store credit (November 2026):
| Route | How it works | What it leaves to your team |
|---|---|---|
| Store credit issued by hand | Issue credit from each customer's profile in the Shopify admin, with an optional expiry date and email | Every order's reward, waiting out returns, taking credit back after refunds, and reminders |
| A Shopify Flow workflow | On each paid order, Flow's Send Admin API request action credits the customer's store credit account | Building and maintaining the workflow, including discounts, refunds, expiry and reminders |
| A cashback app: Smile Cashback, in early access | Smile works out what each paid order earns and issues it as Shopify store credit in your brand's name | Your terms: the rate, exclusions, holding period and expiry. Our team sets it up with you |
By hand. In the Shopify admin, open the customer, click Edit in the Store credit section, enter the amount, an optional expiration date and Notify customer, then click Issue credit. It suits goodwill credit; on every order, the reward math and the refunds fall to your team.
With Shopify Flow. Flow's list of actions has no store credit action (Shopify Help Center, November 2026), so the workflow runs the Send Admin API request action on the Order paid trigger. In a Shopify Community thread that ran from August 2024 to October 2025, merchants building it reported that:
- The reward was worked out on the cart subtotal, so customers earned credit on full price even when a discount applied.
- The credit request seemed to require an expiry date, so one merchant set every credit to expire after 365 days.
- A customer segment built for expiry reminders did not fill during testing.
A cashback app runs that logic for you. In Smile Cashback, you decide what counts toward the rate, set the expiry, and reminder emails go out by default.
With an app. The apps that pay cashback into Shopify store credit are compared side by side in the best cashback and store credit apps for Shopify.
Where Smile Fits
On Shopify: Built for Shopify · Technology Partner · SOC 2 Type II
Smile Cashback, in early access as of November 2026, runs the program this page describes. It is built on Shopify's own store credit: Smile works out what each paid order earns and issues it as store credit in your brand's name, and Shopify holds the balance and applies it at checkout, online, at Shopify POS and in the Shop app. Our team sets it up with you in three steps:
- A 30-minute call. We look at your catalog and return window, name your money, and work out what a rate would cost you.
- Set your terms. Pick the rate, the holding period and the expiry. The blocks go in through your theme editor, with no code.
- Press Activate. Nothing shows to customers until you do. From then on, every paid order earns it.
Smile is the loyalty platform for Shopify Plus and enterprise brands: Built for Shopify, a Shopify Certified Technology Partner (November 2026), a 2026 Shopify Build Award winner and SOC 2 Type II audited (May 2026). For larger teams, see Smile for Shopify Plus.
Frequently Asked Questions
What is a cashback loyalty program and how does it work for ecommerce brands? A cashback loyalty program gives customers a set share of each order back as credit they can spend only with the brand. For an ecommerce brand it runs in six steps: a paid order earns the reward, it is held through the return window, it lands in the customer's account, reminders go out, it pays toward a later order, and unspent credit expires. On Shopify, the credit sits in Shopify's own store credit.
How do I offer cashback to customers on Shopify? Pay it into Shopify store credit in one of three ways: issue credit by hand from each customer's profile, build a Shopify Flow workflow that credits a share of each paid order, or use an app that works out each order's reward and issues it for you. Smile Cashback runs it on Shopify's own store credit, with a holding period, an expiry and reminders, set up by our team.
How much cashback should an ecommerce brand offer customers? Most of the well-known programs we checked pay 2% to 5% of each order: Costco 2%, Dell 3% and Kohl's 5%, with REI's typical 10% at the top (November 2026). Set your own rate as your budget divided by the share of credit you expect to be spent: a 2.5% budget with half the credit spent supports 5%.
How does Shopify store credit work for a loyalty or cashback program? Shopify holds each customer's balance and offers it as a payment method at checkout on the online store, Shopify POS and the Shop app, for customers signed in through customer accounts or Shop Pay. The full balance applies, up to the order total, and expiry is set each time credit is issued (Shopify Help Center, November 2026). The program decides what each order earns and when, then issues it into that balance.
Can Shopify Flow give customers cashback as store credit without an app? It can issue the credit: Flow has no store credit action, so the workflow sends an Admin API request on each paid order. Merchants building it in a Shopify Community thread (August 2024 to October 2025) found rewards worked out on undiscounted subtotals, an expiry date that seemed required and a reminder segment that did not fill. An app runs that logic for you.
Does cashback attract one-time deal hunters? It costs less when it does: a cashback reward costs nothing until the customer comes back to spend it, while a discount code pays out on the first order. Holding credit through your return window also means returned orders never pay out.
Does cashback store credit expire? Only if you set a date. On Shopify, expiry is chosen each time credit is issued, with no store-wide default, and the credit that expires first is spent first; Shopify advises checking local laws before setting one. Smile Cashback lets you set expiry from 14 days to five years, or never, with reminder emails by default 30, 7 and 1 day before.
