Cashback rate playbook: at what % your customers actually share

"Should we raise our cashback from 5% to 7%?" — this is one of the questions brands we meet ask us most often. The answer depends on 3 factors: your gross margin, your AOV, and your sector's psychological threshold. Rather than deciding on gut feeling, we formalized these factors into a model. Here are its assumptions, to be validated by your own A/B tests.

The marginal returns curve

First lesson from our model, perhaps the most important: the relationship between cashback rate and share rate is not linear. We model it as an S-curve:

0-2%: near-zero effect. Sharing stays at "organic" level (customers who share out of brand love, without incentive).
3-5%: take-off zone. Each additional point of cashback would add 6-9 points of share rate.
5-7%: optimal zone for most sectors. Estimated marginal gains of 3-5 points per %.
7-10%: marginal gains drop to 1-2 points per %. Margin erodes faster than share rises.
>10%: ceiling effect. We assume some customers think "scam" and share less than at 8%.

Our model's target zone: 5-7% by sector, with an absolute cap in euros.

The 3 psychological thresholds

Beyond the quantitative curve, our model includes 3 psychological thresholds likely to cause non-linear jumps. These are assumptions, to be confirmed by your own tests:

Threshold 1: the "meaningful amount" (min €3)

Below €3 of cashback in absolute value, we estimate sharing drops heavily. For a €30 basket, that's a 10% floor. This is why, in our model, food (low AOV) performs better in voucher than in cash.

Threshold 2: the "psychological ratio" (10% perceived)

Our assumption: a €5 cashback on €50 (10%) feels more attractive than €7 on €100 (7%) — even if absolute value is higher in the second case. Ratio speaks louder than amount.

Threshold 3: the "credibility ceiling" (max 15%)

Above 15%, we expect a suspicion effect: sharing drops, friends receiving the link wonder "is this a scam?". Only strong brands with very high margins (luxury, editorial) can probably afford >15%.

3 simulated test scenarios by sector

The 3 scenarios below are simulations from our model, not tests run at merchants: they illustrate the reasoning to apply to your own A/B tests.

Scenario 1: beauty, move from 4% to 6%

Fictional beauty brand, €280K/month, AOV €62. Simulated 50/50 test over 6 weeks.

4% variant: estimated share rate 54%, commissions paid €6,048
6% variant: estimated share rate 71%, commissions paid €11,928
Delta referred revenue: +31%
Delta net margin after cashback: +19% (incrementality offsets the extra cost)

Takeaway: in this scenario, staying at 6% is better. Marginal ROI is positive.

Scenario 2: food, cash 4% vs. €12 voucher

Fictional food brand, €180K/month, AOV €38. Equivalent budget.

Cash 4% (= €1.50): estimated share rate 19%
€12 voucher usable from €40: estimated share rate 47%
Voucher redemption rate (assumption): 38%
Additional orders: +212%

Takeaway: the voucher clearly wins. In our model, cash doesn't work under €40 AOV.

Scenario 3: premium accessories, 7% vs. 10%

Fictional accessories brand, €420K/month, AOV €185. Simulated 50/50 test over 4 weeks.

7% (= €13): estimated share rate 48%
10% (= €18.50): estimated share rate 49%
Delta referred revenue: +2% (negligible)
Delta margin after cashback: -11%

Takeaway: back to 7%. Beyond this threshold, the marginal gain turns negative.

Starting points by sector

Starting points suggested by our model, to be validated by your own tests:

Beauty: 5-6% cash, €20/share cap
Fashion: 5-7% voucher (not cash) usable >€60
Sport & outdoor: 4-5% cash, €25 cap
Accessories & jewelry: 6-7% cash, €35 cap
Food & beverage: 3% cash + €8-12 voucher referee (not cash-only referrer)
Home & décor: 7-8% cash, validation >€120, 90-day window
Luxury & premium: 3-4% cash, €80 cap (argument matters more than amount)

The 3 A/B tests worth running (and those that aren't)

Not all tests are worth it. Here are the 3 to launch as priority:

Cash vs. voucher (if AOV <€50): test first on food, basic cosmetics, small décor. Duration: 4 weeks. Recommended minimum traffic: 800 orders.
Rate tier test (-1 point below sector threshold): test 1 point below your current rate to verify you're not above the diminishing returns threshold. Duration: 6 weeks.
Absolute cap (change the cap, not the %): often underestimated. Moving the cap from €15 to €25 on an €85 AOV could, according to our model, add up to 8 points of sharing without changing the %.

Not worth it: testing >10% vs. 10%, testing non-round rates (5.3%, 6.7% — the brain rounds), testing cash vs. wallet if AOV >€100 (in our model, cash wins).

Conclusion: data beats intuition

Cashback rate is often the most debated variable internally — and the one most often decided by founder intuition. An A/B test takes about 6 weeks and, in our simulated scenarios, the net margin gap between two rates ranges from -11% to +19%. That's probably one of the highest-ROI tests you can run in 2026.

Our advice: get out of your head, run the test. Your own data will settle it — you just have to ask the question.