Unexpected help with the cost of living

[Typhoon]

Mods: please move to another thread if appropriate (cash vs card is closed)

My bank, Nationwide, is offering an incentive to use a debit card to pay for shopping:

Get 5% cashback on your supermarket shop​

With everything going up, get a little back. Our current account members can now earn up to £10 a month at a wide range of supermarkets and convenience stores

From 9 February up to 30 April 2023, you can earn 5% cashback on your purchases up to £10 each calendar month. You just need to use your Nationwide debit card at any of a wide range of supermarkets and convenience stores. If you have a joint bank account, you can earn £10 each with both your cards.

To get the maximum £10 a month, you'll need to spend £200 in a calendar month with your debit card.

You'll get the money back in your account within 6 weeks of the end of each calendar month.

Being a natural sceptic, I am trying to think about the downsides. Clearly, one is that many corner shops may lose out, but the 5% on an average purchase from one is hardly likely to persuade people to travel further afield. I suppose, it might encourage those banking elsewhere, particularly anyone who feels their bank is no longer 'listening' to them, to switch (there is a link).

We get nowhere near £200 on groceries but anything is better than nothing, and it applies to all major supermarkets (M & S Food is not included, but deliveries are - including Ocado, as well as some of those food box companies) as well as a whole range of obscure and fringe companies. It does mean that I have to ease off the 'cash' self service where I get rid of those awful 5p coins but I can live with that for 12 weeks.

It is certainly better than many of the offers I am sent by supermarkets.

Its just a bit unexpected.

https://www.nationwide.co.uk/curren...d=26307094&et_rid=1672159409#supermarket-list

 

[DelayRepay]

Other banks do similar promotions from time to time. The card issuer makes money when you pay with your debit card through interchange fees. If you use your card to take cash from an ATM, it costs the bank money. So they naturally want to encourage people to use their debit cards rather than cash or another bank's debit/credit card and promotions like this are a good way of doing so. Some customers will continue to use the Nationwide card after the promotion ends, which is what they are aiming for.

These promotions also encourage people to keep higher balances in their current accounts, which is in the bank/building society's interest.

 

[Typhoon]

Other banks do similar promotions from time to time. The card issuer makes money when you pay with your debit card through interchange fees. If you use your card to take cash from an ATM, it costs the bank money. So they naturally want to encourage people to use their debit cards rather than cash or another bank's debit/credit card and promotions like this are a good way of doing so. Some customers will continue to use the Nationwide card after the promotion ends, which is what they are aiming for.

These promotions also encourage people to keep higher balances in their current accounts, which is in the bank/building society's interest.

Thanks. I've never had a 'bribe' like that before, it is normally something pretty pointless (although they did used to give some money back from a credit card - 5% seems rather generous, although the cap will ensure a maximum benefit.

 

[Russel]

Up to £10 a month...

Without wanting to sounding ungrateful, it's not exactly worth getting excited about.

 

[Kite159]

It's too get those who leave money in the account and do the day to day spending on credit cards (paying off in full every month) to try and use the debit card so they get more money from card fees.

 

[Typhoon]

Up to £10 a month...

Without wanting to sounding ungrateful, it's not exactly worth getting excited about.

If you are going to spend the money in any case, it is better than nothing. As an incentive to use my debit card, I prefer it to the situation I encountered in Tesco last week, self service - card only. Fortunately the sole checkout operator was underemployed so I got out quicker than joining the serpentine queue for the machines.

 

[zero]

Thanks for this, the maximum reward will be up to £54 for us as my wife also has a nationwide debit card. Didn't get any email from nationwide so might not have known about this otherwise.

It is not £60 because we would be foregoing the 1% cashback on our chase debit cards. When the chase 1% offer ends it would be back to my airline / hotel reward credit cards.

I thought debit card fees for large shops like supermarkets were basically fixed at something like 5p per transaction. For other shops they may be a percentage.

I use cash frequently but I don't understand how you end up with lots of 5p coins - the maximum I ever have is two, because sometimes you can't spend a single 5p, but when you have two there is almost no situation where you would need to get a third one back (basically only if a shop or machine has run out of 10p).

 

[AlterEgo]

Up to £10 a month...

Without wanting to sounding ungrateful, it's not exactly worth getting excited about.

5% cash back on your weekly shop isn’t to be sniffed at for many families.

 

[skyhigh]

Up to £10 a month...

Without wanting to sounding ungrateful, it's not exactly worth getting excited about.

Would you rather they didn't bother then?

 

[Typhoon]

Thanks for this, the maximum reward will be up to £54 for us as my wife also has a nationwide debit card. Didn't get any email from nationwide so might not have known about this otherwise.

It is not £60 because we would be foregoing the 1% cashback on our chase debit cards. When the chase 1% offer ends it would be back to my airline / hotel reward credit cards.

I thought debit card fees for large shops like supermarkets were basically fixed at something like 5p per transaction. For other shops they may be a percentage.

I use cash frequently but I don't understand how you end up with lots of 5p coins - the maximum I ever have is two, because sometimes you can't spend a single 5p, but when you have two there is almost no situation where you would need to get a third one back (basically only if a shop or machine has run out of 10p).

I may have been targeted because of my reluctance to use my debit card - credit card (paid off) for on-line or large purchases rather than debit card (as hinted above). Supermarket shopping never that great as I have to carry it a fair way.

5ps. I'm always getting them, if I spend £9.85, I guarantee I will get 3 5ps back. I never get 10ps; recently I had over £1 worth of change in 20's and 5's (and a few copper coins). I'm starting to get the impression I am being picked on!!

 

[Russel]

Would you rather they didn't bother then?

Unless I'm misunderstanding the offer, £10 a month is small change, so it wouldn't bother me if they bothered or not.

I'm not going to go out of my way to change my shopping or banking routine for £10.

 

[AndrewE]

Thanks for the alert. I have a Nwide account but hadn't heard about this.
£10 a month may not be much, but if I'm paying by card in those shops anyway, using an account with a different bank seems like cutting off my nose to spite my face.

 

[Mcr Warrior]

I use cash frequently but I don't understand how you end up with lots of 5p coins - the maximum I ever have is two, because sometimes you can't spend a single 5p, but when you have two there is almost no situation where you would need to get a third one back (basically only if a shop or machine has run out of 10p).

Some older style cash / card transaction self-checkout machines at supermarkets don't ever give out 10 pence or 50 pence pieces as change. Tend to just be 1p, 2p, 5p, 20p, £1, £2 coins or £5 or £10 notes.

 

[DelayRepay]

Unless I'm misunderstanding the offer, £10 a month is small change, so it wouldn't bother me if they bothered or not.

I'm not going to go out of my way to change my shopping or banking routine for £10.

I have a Nationwide Debit Card, so I will take advantage of the offer. A 5% discount is not to be sniffed at although it won't change my life either.

 

[Typhoon]

Some older style cash / card transaction self-checkout machines at supermarkets don't ever give out 10 pence or 50 pence pieces as change. Tend to just be 1p, 2p, 5p, 20p, £1, £2 coins or £5 or £10 notes.

To be honest I rarely see a £2. I guessed it was to limit the number of types of coin, in particular concentrate on the smaller size coins.

 

[zero]

Some older style cash / card transaction self-checkout machines at supermarkets don't ever give out 10 pence or 50 pence pieces as change. Tend to just be 1p, 2p, 5p, 20p, £1, £2 coins or £5 or £10 notes.

Interesting. Not encountered this in the UK as I only ever dump coins and pay the balance by another means, but in the eurozone I have received a whole bunch of 5c several times, and thought it weird that the machine ran out of 10c, 20c, and 50c. Reading your post, maybe those machines just ran out of 20c.

 

[DannyMich2018]

Spending £200 in one calendar month- this doesn't have to be in ine transaction does it?-thanks

 

[Typhoon]

Spending £200 in one calendar month- this doesn't have to be in ine transaction does it?-thanks

In the Ts and Cs

1. You automatically qualify for 5% cashback on all Qualifying Spend made from your current account (excluding FlexOne), up to £10 per month.

(my emphasis). So I think they would be on pretty stony ground if they said 'yes'.

 

[Dent]

I notice it only refers to retailers which are "likely to be included" with no definitive list of which retailers actually are include, so it's a complete lottery whether any of your spending will acctually qualify.

 

[danm14]

I notice it only refers to retailers which are "likely to be included" with no definitive list of which retailers actually are include, so it's a complete lottery whether any of your spending will acctually qualify.

It's not a complete lottery. Every merchant is assigned a Merchant Category Code by their card processing company to classify what service it offers.

Based on their Terms and Conditions, it appears Nationwide will pay this cashback on transactions made with merchants under MCC 5411 (Grocery Stores, Supermarkets) and 5499 (Miscellaneous Food Stores - Convenience Stores, Markets, Specialty Stores, and Vending Machines).

In most cases, especially for larger businesses, these will be correct - but not always. There may have been a mistake, the merchant's line of business may not fall nearly into one category and a judgement call has to be made, the merchant's line business may have changed over time without notifying their card processing company, the merchant may carry on multiple lines of business, the merchant may have falsely declared their line of business.

This is simply Nationwide preventing themselves from having to get into a long elaborate discussion with an irate customer about whether Mary's Shop on the Shetland Islands is a "Convenience Store" that's eligible for cashback or a "Discount Store" that isn't.

Merchant Category Codes are widely used in this way as a best-efforts attempt to classify transactions. Most notably credit cards, in order to apply cash advance fees to non-ATM services like bureaux de change and money transfers (e.g. MCC 6051 Quasi Cash - Merchant and MCC 4829 Wire Transfer Money Orders), and under 18s debit cards in order to prevent gambling (e.g. MCC 7995 Gambling Transactions and MCC 7800 Government Owned Lottery)

 

[Dent]

It's not a complete lottery. Every merchant is assigned a Merchant Category Code by their card processing company to classify what service it offers.

Based on their Terms and Conditions, it appears Nationwide will pay this cashback on transactions made with merchants under MCC 5411 (Grocery Stores, Supermarkets) and 5499 (Miscellaneous Food Stores - Convenience Stores, Markets, Specialty Stores, and Vending Machines).

Where is this documented on the Nationwide page, and where does it explain how to check before you spend whether it will qualify?

I can't see that documentation anywhere, so it does certainly look like they are expecting users to just take a blind gamble.

 

[danm14]

Where is this documented on the Nationwide page, and where does it explain how to check before you spend whether it will qualify?

I can't see that documentation anywhere, so it does certainly look like they are expecting users to just take a blind gamble.

Current Account Cashback Offer Terms | Nationwide

Find out more about Nationwide’s current account cashback offer terms and conditions here.

www.nationwide.co.uk

6. We decide whether to pay cashback based on how the retailer or the goods you are buying from that retailer are categorised by VISA. Retailers are categorised by VISA based on the type of things they sell. We use these categories to work out whether you can earn cashback on a transaction, because we will only pay out for the two categories specifically used for ‘Grocery stores and Supermarkets’ and ‘Convenience Store’ transactions. We don’t control how a retailer or store is categorised. For this reason transactions at some stores won’t qualify for cashback, even if the transaction otherwise looks eligible. We have provided a list of some of the stores where you could earn cashback on our website, as detailed in condition 5, but this list may change from time to time.

There's no way for you or Nationwide (or anyone else bar the merchant's card processing company for that matter) to check in advance what the Merchant Category Code of a given merchant is.

 

[Dent]

There's no way for you or Nationwide (or anyone else bar the merchant's card processing company for that matter) to check in advance what the Merchant Category Code of a given merchant is.

So in other words it's a complete lottery, which is what I said in the first place but you denied.

 

[danm14]

So in other words it's a complete lottery, which is what I said in the first place but you denied.

In the overwhelming majority of cases, merchants are correctly categorised. If you buy goods from a supermarket, there's an exceptionally high likelihood, probably well over 99%, that the merchant will be correctly categorised as a supermarket and you'll get the cashback.

Of course, you might also get lucky, and get an unexpected £5 back on your £100 tank of petrol, because the local petrol station with a small convenience store attached is categorised as a convenience store rather than a petrol station.

This is how the vast, vast majority of cashback offers on credit and debit cards around the world work, and unfortunately there's no better system of doing it. Perhaps it would have been better for Nationwide not to offer cashback at all?

If this is your definition of a "complete lottery" - something that will work correctly 99.9% of the time, and where there's no actual loss (as distinct from not gaining something) from it not working, then yes, this is a complete lottery. It's certainly not my definition of a "complete lottery" though, nor would I expect it to be most people's.

Of course, by that definition using a parking meter is also a complete lottery - because there's always a tiny possibility that it'll fail to count one of your coins or fail to print a ticket. (Except in this example, you actually lose something, whereas with the cashback offer you still receive the goods you've paid for).

 

[Cdd89]

You often usually get offers around this (plus card rewards, which I value at around +1%) by using EIS portals. I am on Xexec and Perkbox via companies I contract for and looking at a few examples, I’m offered 6.5% at M&S, 4% at Sainsbury’s, plus non-supermarket offers like 10% at Starbucks, 4% at Deliveroo, etc.

Almost every large company is enrolled in a scheme like this, I suspect a lot more people have access than realise it (mainly as most people have better things to do than browse corporate intranets…).

 

[danm14]

Almost every large company is enrolled in a scheme like this, I suspect a lot more people have access than realise it (mainly as most people have better things to do than browse corporate intranets…).

In a specific example, well over half the population of Northern Ireland has access, as all customers of PowerNI, the biggest electricity provider, can access Xexec.

Power NI Perks | Customer Rewards

Power NI Perks is Power NI’s customer rewards scheme that offers discounts, savings and cashback in high street shops, online stores and on big brands. Power NI Perks is available to all Power NI home customers.

powerni.co.uk