The ATM at the Checkout Counter

Cash back at the point of sale on debit card transactions secured by personal identification numbers is becoming an increasingly popular option as more merchants offer the service and consumers begin using online debit cards more often. Online debit transaction volume is growing at a compounded annual rate of 28%, compared to only 4% for ATM traffic, according to Celent Communications, a New York research firm. “More and more consumers are willing to use PIN debit, and cashback is growing as fast as PIN debit (generally) and much faster than ATM withdrawals,” says Celent analyst Gwenn Bezard. Cashback used to be hampered by miserly limits imposed by merchants, but now with more merchants accepting online debit they're doling out more cash as a competitive tactic. The typical cashback limit at supermarkets is $50, with some other retailers willing to go up to $200. Major national and regional chains offering cashback include Wal-Mart, Rite Aid, and Home Depot. While some observers think cashback's growing popularity stems from the average $1.40 foreign fee banks charge on ATM transactions, Bezard downplays that idea. Online debit at the point of sale, he points out, isn't always free, either, depending on the issuing bank's pricing policies.