Why do grocery stores in the U.S. offer cash back so eagerly?
The only card I've seen offer this on credit card purchases is Discover.  I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays.  (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not.  It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee.  Now I very rarely go to the ATM. What is in it for Discover?  They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period.  And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business.  And happier customers. What is in it for the grocer?  Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally. Cash-back also lets the store turn hard currency into an electronic transfer or check, which reduces the hassle/risk of hauling bagfulls of cash to the bank. (The smaller stores I've spoken to have called this out as a major advantage of plastic over either cash or checks. I'm assuming that the problem scales with number and size of transactions.) It doesn't cost them anything, they don't pay commission on you taking cash-back. But it brings customers to the stores because these customers would rather buy something and use cash-back to get cash, than go to an ATM and pay the ATM commission. The cost to the store is small. They may have to pay a slightly greater fee because the transaction is now bigger. They do need additional cash on hand. Even though the majority of transactions are electronic (credit/debit) or check, the local grocery store still seems to have significant cash on hand. This is seen as a customer service. If there is a 2% fee the $50 advance costs them $1 for the minority of customers that take advantage of it. After more than 10 years of doing this they have figured this into the cost of groceries. Of course the credit card company could also waive the fee to store. My credit card online statement does tell me how much cash back was received. The line says date, store, amount ($40.00 cash over and $123.45 purchases) $163.45 total. Therefore the credit card company knows that cash back was used. Cash back from credit cards is handled separately than the rest of the purchase, i.e. interest begins accumulating on that day, and likely at a higher rate, and usually comes out of a lower limit than the credit allotted to that card. Given all these differences, and the obvious revenue-generation situation for the lender, it makes sense for them to give the store an incentive, rather than penalize them further, for the use of such a feature.  Note: I am not privy to the inner-workings or agreements between large stores and credit lenders, so I cannot guarantee any of this. The reason is, stores want customers to use cash.   By giving us cash, we are more likely to use cash next time. I feel a little guilty when using my bank card at the store because I know I'm giving about 2-3% of the sale to the bank.  Unless I don't really like where I'm shopping (ie Walmart), I try to use cash if I have it.  I doubt these large stores pay extra for supplying the cash portion.  They just need to keep the cash onhand. In other countries, do they not mind paying banks a percentage of each transaction?  That's a huge loss for retailers.  (I also heard tipping isn't popular in some countries, maybe the lack of regard for vendors is related somehow??) Oh, plus, it's a value added service.  A customer is more likely to return to a store if they provide this service.
"The real reason credit cards are so popular in the US is that Americans are lazy and broke, and the credit card companies know how to market to that.  Have you ever heard of the $30k millionaires? These were individuals that purchased as if they were some of the wealthy elite, but had no real money to back it up. American society has pushed the idea of ""living on credit"" for quite some time now. An idea that is even furthered by watching the US government operate solely on credit. (Raise the debt ceiling much?) Live in America for more than six months and you will be bombarded with ""Pre-Approved Deals"" with low introductory rates that are designed to sucker the average consumer into opening multiple accounts that they don't need. Then, they try and get you to carry a balance by allowing low minimum payments that could take in the neighborhood of 20 years to pay off, depending on carried balance. This in turn pads the credit companies' pockets with all of the interest you now pay on the account. The few truly wealthy Americans do not purchase on credit." One reason why some merchants in the US don't accept Discover is that the fee the store is charged is higher than the average. Generally a portion of transaction fee for the network and the issuing bank goes to the rewards program. In some cases a portion of the interest can also be used to fund these programs. Some cards will give you more points when you carry a balance from one month to the next. Therefore encouraging consumers to have interest charges. This portion of the program will be funded from the interest charges. Profits: Rewards: Some rewards are almost always redeemed: cash once the amount of charges gets above a minimum threshold. Some are almost never redeemed: miles with high requirements and tough blackout periods.  Credit cards that don't understand how their customers will use their cards can run into problems. If they offer a great rewards program that encourages use, but pays too high a percentage of points earned can lead to problems. This is especially true when a great percentage of users pay in full each month. This hurt Citibank in the 1990's. They had a card with no annual fee forever, and a very high percentage never had to pay interest. People flocked to the card, and kept it as an emergency card, because they knew it would never have a annual fee. "A retail revolving account is essentially a credit card offered by a store (or chain of stores) and usable only at that store. In my area, the Sears department store's ""Sears card"" would be a good example. Stores offer these to capture a bit more profit from the transaction. They don't have to pay someone else's processing fees, and they get to keep any interest you pay. Of course they also accept the costs that go along with retail lending. It operates just like any other revolving-credit card. Read the fine print of the agreement to see what the grace period is, if any, and what APR they're charging after that. These cards also serve as a marketing tool. Some stores don't accept any other card. Some can do ""instant approvals"" to encourage you to make a large purchase now rather than continuing to shop around. Some may offer special deals only if you use their card -- I paid 0% interest for a year on my refrigerator, which was convenient for me. And so on. Gasoline stations also used to offer their own cards... though these days it's common for them to offer a branded version of one of the major credit cards instead." "I've been a member for over 15 years and do most of my shopping there.  But it isn't a myth.  While some items are singles/normal such as clothing, many are larger/bulk.  The price per unit is a heck of a lot lower as a result, but the price is still higher.  For example ketchup is a 1.25kg two pack while my local supermarket sells them as smaller singles.  Toilet paper is twice the price of a local Target but you get almost 4 times as much.  Bacon comes as a two pack of a pound each (one pack at supermarket).  Milk comes as two one gallon containers.  Fruit and vegetables come in containers that are typically twice the size of my local supermarket.  Bleach comes in a huge box containing 3 large containers.  Shrimp comes in a two pound bag - local supermarket is 1lb pound bags at their largest.  Halloween candy comes in huge bags - the local supermarket has some that big, but the vast majority are a lot smaller.  Bread is in two packs - local supermarket is a one pack.  The rotisserie chicken is a single just like my local supermarket and is cheaper.  Costco is undoubtedly value for money, but a typical family shopping list will cost more upfront (and then last longer).  But not everyone can afford the membership and higher initial ""investment""." I know Coles doesn't let you spend Coles gift cards on prepaid credit cards, Target probably has a similar policy. But it's up to the cashiers to enforce it, and I guarantee you the majority of them give so few fucks they actually end up with more fucks at the end of the day than they started with. I can understand the appeal of this service. However, I don't think there are a lot of barrier to entry in this business model. What's stopping local grocery stores offering same service?   The only advantage with blue apron I see is limited choices to prevent choice paralysis. Walmart has been rolling out click-and-collect for the last couple years and is doing an amazing job of it. I've talked to a lot of mothers who have tried it and they absolutely love it. When you've got a bunch of kids, all you have to do is pull into the parking lot and Walmart places your groceries and anything else you bought into your trunk. The workers have been trained to pick out the best produce and I've heard nothing but praise from those who have used it. If anything, this seems like Amazon playing catch up this time. WalMart bought a lot of supermarkets in my country, though they kept their original names. But at most times during the day there are at most two cashiers open. So when I see a long line I don't buy and leave Because best buy doesn't hire hoards of extremely low wage workers. Pay starts at $9 for cashiers at my store and only goes up from there. Best buy also has a community service program that donates $1000 chunks to local charities/ schools a couple times a year. It is. My grocery store removed our self check-out because of the significant increase in theft. It wasn't even bottom of the cart stuff. You just load what you want to steal on non-weighing side, pay, and then load all of it into bags. The cashier is usually busy dealing with someone at another kiosk so no one is actually watching you.   In the end, the theft, constant break downs, and problems customers always had trying to use them made them too much trouble to keep. We put up a few more check stands and the theft dropped. The answer today is the Fidelity Rewards Amex.  This card pays the highest cash back (2%) on ALL purchases. The answer gets more complicated if you like miles, or you want to use one card for groceries and gas and another for restaurants, etc.  But the Fidelity Amex gives you 2% on everything you purchase, automatically deposited into your Fidelity account as cash (no coupons to rip off, or checks to deposit). The gift card for specific stores has no fee. In our budget of nearly $500/mo for supermarket, it would be easy to just buy 10 x $500 cards, and then be careful with them.  A look at your past 12 mo of spending should provide a hint what GCs might work for you.  Else, for a $4.95 fee, I've bought $500 generic Visa cash cards. When my new credit card offered a 10% cash bonus for spending, I spent. Took us nearly 18 months to burn thru 500 cards. But a net $4500 gain was sweet.  Update - the cash card racks all appear to have a sign that these cards may no longer be bought with a credit card. Although there are no transaction fees from PayPal, your bank should treat this as a cash advance rather than a payment and so will charge you fees.  The cash advance fee will be larger than 1%, so you'll definitely lose money.  Plus you'll start paying interest immediately (unlike for purchases).  PayPal warns that you'll get cash advance fees here. I'm wearing shorts I bought online. Levi's. Amazon offers free returns so I bought two sizes and picked what fit me best. I don't buy them all online but I do things like jeans from a specific brand where I know the sizing well. A lot of places offer free returns now. Otherwise I might take a gamble on a shirt fitting, or check out what blank it's printed on to see if I know it already. Just bought a shirt yesterday that I knew was printed on an American apparel 50/50 blank so I knew what size I need as I have ten shirts printed on that blank already.   Still need to go into a store for a lot of things though