With competition rising and shoppers growing increasingly price-conscious in today’s inflationary environment, grocery retailers are looking for new strategies to bring more customers through their doors and capture a greater share of each shopper’s spend. Traditional grocery store rewards programs may not be enough to win wallet share from shoppers who spread their purchases across multiple stores each month.

What are grocery cash-back programs?

Cash-back programs partner with grocery retailers to offer personalized promotions that drive new customers to your stores. Unlike traditional loyalty programs you manage internally, these supermarket cash-back partnerships use external marketplaces to reach millions of consumers when they're deciding where to shop.

Here's how it works: consumers see your store's personalized cash-back offer in an app, visit your location to shop, and receive money back on their purchase. You only pay when the program proves it brought you customers who wouldn't have shopped with you otherwise.

This profit-share model means you're investing in proven results based on actual transactions, not potential reach like traditional advertising.

Types of cash-back partnerships and what they do for your business

Understanding your options helps you choose partnerships that complement your existing systems rather than compete with them:

• Credit card partnerships: Provide broad exposure but reward all grocery spending equally, making it difficult to measure whether they're bringing you new customers or just subsidizing people who already shop at your store.
• Cash-back app-based programs: Target consumers who typically shop at competing locations, using personalized offers to drive them to your specific store. These programs focus on incremental customer acquisition rather than rewarding existing shopping patterns.
• Store loyalty incentives: Give you complete control over customer relationships, but limit your reach to people already shopping at your store, missing opportunities to capture market share from competitors.
  

The best partnerships target customers from competing retailers rather than reward your existing customer base.

Why personalized offers work better than one-size-fits-all promotions

Research shows that 83% of consumers feel rewarded by cash back (Dosh, 2019), but the real business insight is understanding why personalized promotions are effective:

• Seamless reward processing: Cash back reduces the psychological "pain of payment," making consumers more willing to try your store over competitors they typically visit (Journal of Consumer Research).
• Behavioral pattern changes: McKinsey research demonstrates that cash-back rewards create positive brand experiences extending beyond single transactions, explaining why participating retailers see sustained traffic increases.
• Purchase frequency acceleration: Behavioral studies show cash-back users reduce time intervals between store visits and increase transaction sizes (Vana et al., 2018), creating compounding value for participating retailers.
• Customer acquisition without cannibalization: Unlike loyalty incentives that often discount purchases customers would make anyway, personalized cash-back offers change the behavior of people who typically shop elsewhere.
  

The key is matching the right offer to each individual customer — giving frequent shoppers smaller incentives to return, while offering larger promotions to new customers who need more motivation to switch stores.

The challenges grocery retailers face today

Your grocery business faces new challenges that require fresh approaches beyond traditional marketing:

• More competition across categories: You're no longer just competing with other grocery stores. Convenience stores sell groceries, grocery stores offer prepared foods, and online retailers deliver everything — meaning customers have more options when deciding where to spend their money.
• Value-driven shopping behaviors: Shoppers compare prices across multiple stores and choose different locations for different purchases. They want the best deal for their specific needs, not blanket loyalty to one retailer.
• Audience overlap in traditional marketing: Most advertising channels reach the same customer pools your competitors are targeting, making it expensive to acquire truly new customers rather than just competing for existing ones.
  

Cash-back partnerships like Upside address these challenges by reaching millions of consumers through personalized offers. These targeted campaigns drive customers from competing retailers directly to your stores.

How cash-back partnerships work with your existing programs

Cash-back partnerships work alongside your loyalty programs and marketing campaigns by targeting a different audience — people currently shopping elsewhere who need an incentive to try your location. This expands your reach beyond your existing customer base without interfering with the programs you already have in place.

The partnerships operate independently from your internal systems, so there's no conflict with your current promotional calendar or loyalty member benefits. Your existing customers continue receiving their usual rewards while the partnership platform works to attract new shoppers from competitor locations and increase existing customers' frequency and spend.

This dual approach lets you maintain your established customer relationships while simultaneously growing your market share through external acquisition channels.

Partnership structure: Protecting profitability while growing your customer base

When choosing a cash-back partnership, you need programs that protect your profitability while driving real growth. The best partnerships include these features:

• Paying only after proven results, not upfront advertising costs
• Commission based on incremental customers, not total transactions
• No fees for customers who would have shopped with you anyway
  

Upside operates on this profit-share model — you only pay when we prove we've brought you customers who wouldn't have chosen your store otherwise. Our measurement methodology uses control groups to demonstrate exactly which transactions are truly incremental to your business.

Common concerns about cash-back partnerships (and the answers)

As a grocery retailer considering cash-back partnerships, you likely have these questions:

• "Why is this better than our own programs?" Cash-back partnerships complement rather than replace your existing programs. They target customers from competing retailers while your loyalty programs retain existing customers.
• "This sounds too good to be true." Profit-share models work because they only succeed when you succeed. Programs that can't prove incremental customers don't generate partner revenue, creating natural alignment between customer acquisition and your profitability. This creates natural alignment between program success and your profitability.
• "How do you measure incremental impact?" Look for programs using test-versus-control methodologies that compare participating customers against similar non-participating customers to prove which transactions wouldn't have happened otherwise.
  

The right partnership should be able to answer these questions with specific data about their measurement approach and results from similar retailers in your market.

Upside: Profit-share partnerships for increasing incremental business

Upside operates a digital marketplace connecting grocery retailers with nearby consumers through personalized cash-back offers. Nearly 30% of fuel and convenience retailers nationwide use Upside, and we're expanding rapidly in grocery because our profit-share model guarantees you consistently earn more from incremental customers than you pay.

Our platform reaches millions of consumers when they're deciding where to shop, presenting them with personalized offers that motivate them to choose your store over competitors. You only pay when we prove we've brought you customers who wouldn't have shopped with you otherwise.

Request a demo today.

Frequently asked questions

How do cash-back partnerships for groceries drive profit for grocery retailers?

Cash-back partnerships drive profit by targeting customers who typically shop at competing stores, using attribution-based measurement to prove you only pay for incremental business. The profit-share model means you always get a positive return on investment.

What makes Upside different from traditional grocery advertising?

Unlike traditional advertising, where you pay upfront with uncertain results, Upside operates on a profit-share model where you only pay when we prove incremental customer visits.

How do retailers on Upside win wallet share away from competitors?

Cash back offers are personalized to each individual user based on their historical spend at your store and their ongoing purchase behavior. In addition, the exclusivity of our marketplace means that Upside users only see offers at participating retailers while browsing the app. Our measurement methodology proves you only pay for customers you wouldn't have acquired otherwise.

Can Upside integrate with our existing loyalty program without causing conflicts?

Upside complements existing loyalty programs because we target different customer segments. Your loyalty program retains current customers while Upside targets customers from competing retailers, creating two distinct channels that work together rather than compete.

Sources:

• Journal of Consumer Research."The Psychology of Money: Saving and Spending Habits."
• McKinsey & Company. "Putting behavioral psychology to work to improve the customer experience."
• Vana, P., Lambrecht, A., & Bertini, M. (2018). "Cash Back Is Cash Forward: Delaying a Discount to Entice Future Spending." Journal of Marketing Research".