I recently came across a cashback offer that promised 3% back on all spend. Sounds incredible, right?
Then I did the math. After accounting for foreign exchange fees, the restrictions on what actually qualifies for cashback, and the cap on the cashback, the real benefit was closer to 0.5%.
Here's the thing: cashback is exactly what the word implies – cash given back to you. Which means you're paying something to get that cash back in the first place.
The real question isn't "how much cashback do I get?" It's "how much am I actually paying, and what am I really getting back?"
To help you cut through the marketing noise, I've put together a simple framework to evaluate any cashback program. I call it the C.O.S.T Framework – four critical questions you should ask before getting excited about any cashback offer.
C - Costs: What are you really paying?
This is the most important question, and the one most commonly buried in fine print.
Cashback programs work by taking a small percentage of what you spend and returning it to you. But if the provider is charging you hidden fees elsewhere, that "generous" cashback becomes much less generous very quickly.
The Foreign Exchange Trap
The biggest hidden cost? Foreign exchange fees.
Let's say a bank offers you 3% cashback but charges 5% on foreign transactions. Meanwhile, another provider offers 1% cashback but only charges 2.5% FX fees. Which one is better?
Let's take a hypothetical example, Quick math: On 100 SAR of foreign spend
- Provider A: Pay 5 SAR in FX fees, get 3 SAR back = Net cost of 2 SAR
- Provider B: Pay 2.5 SAR in FX fees, get 1 SAR back = Net cost of 1.5 SAR
The "lower cashback" option just saved you 25%.
But it gets worse. Some providers don't just charge high FX fees – they also use inflated exchange rates, meaning you're getting fewer foreign currency units per Riyal than the actual market rate. This is essentially charging you twice (if this sounds familiar, it's because we wrote about this recently).
Always ask: What are the total fees I'm paying? Include FX fees, annual card fees, subscription fees, and any other costs.
O - Opportunities: What spending actually earns cashback?
A 3% cashback rate means nothing if it only applies to a tiny fraction of your spending.
Some programs only offer cashback on:
Foreign transactions (excluding all your domestic local spend)
Specific merchant categories (like dining or travel)
Spending up until certain thresholds
All of this adds friction and reduces the actual value you get.
Always ask: On what percentage of my total business spend will I actually earn this cashback?
S - Stakeholders: Who benefits from the cashback?
Here's something most people don't think about: in a traditional business cashback program, only the company earns rewards. But your employees are the ones making the purchases.
This creates a disconnect. Employees have no incentive to use the corporate card for eligible purchases or to follow expense policies that might maximize cashback. The company gets the reward, but employees do the work.
Always ask: Who benefits from the rewards, and do I get to decide?
T - Transferability: What can you actually do with it?
Earning cashback is great. But what can you actually do with it?
Many programs lock you into "points" with unclear or fluctuating values. You earn 1,000 points but have no idea if that's worth 10 SAR or 100 SAR. Or worse, you can only redeem them for specific items at inflated prices, making the "cashback" worth far less than advertised.
Always ask: What is each point actually worth in currency terms, and how many ways can I actually use them?
The Bottom Line: Do the Real Math (not the Marketing Math)
When evaluating any cashback program, don't just look at the headline percentage. Always Ask:
Costs: What are ALL the fees I'm paying? (FX, subscriptions, subscription fees, inflated exchange rates)
Opportunities: What percentage of my total spend actually earns cashback?
Stakeholders: Can I reward my employees, or just the company?
Transferability: Can I take it as cash, convert to flexible rewards, or both?
A 1% cashback program with low fees and universal earning beats a 3% program with hidden costs and restrictions every single time.
How we built SiFi Cashback & Rewards with this in mind:
At SiFi, we designed our cashback program to pass every question in the C.O.S.T Framework:
- Costs: Flat 2.5% FX fee with no VAT or hidden fees on top. We use the spot rate (the actual market exchange rate with no markup). What you see is what you pay. No additional hidden domestic charges as well.
- Opportunities: Cashback on all eligible domestic and foreign spend. We're transparent about which merchant categories are excluded, and we list them clearly in our T&Cs (these are categories where we don't earn interchange fees and therefore can't offer cashback).
- Stakeholders: Businesses choose how rewards are distributed - 100% to the company, 100% to employees, or a custom split. This is our globally unique approach. Want to reward employees who consistently follow expense policies? Route their percentage to them. Want to fund your annual off-site with accumulated rewards? Keep 100% at the company level.
- Transferability: 1 Riyal = 1 SiFi Point with a clear cash equivalent value. Take it as cash, convert to points and book flights or hotels with partner programs like AlFursan or Accor, or use SiFi's Rewards Card to spend accumulated rewards elsewhere.
We believe transparency should be the default, not a competitive advantage.