Where a card issuer operates such a program, cardholders typically receive between 0.5% and 2% of their net expenditure (purchases minus refunds) as an annual rebate, which is either credited to the credit card account or paid to the cardholder separately.
When accepting payment by credit card, merchants typically pay a percentage of the transaction amount in commission to their bank or merchant services provider. Merchants are often not allowed to charge a higher price when a credit card is used as opposed to other methods of payment, so there is no penalty for a cardholder to use their credit card. The credit card issuer is sharing some of this commission with the cardholder to incentivise them to use the credit card when making a payment.
Cashalot-cashback marketing works like affiliate marketing. Customers are given cash back on or money off specific purchases. Cashback solutions like these are a clever way for companies to attract new customers and to retain those they have already cultivated.