By 2028, nearly 90% of the 14.7 million new digital buyers in the US will come from Gen Z. And this group doesn’t operate like any other generation.
They’ve developed near-total immunity to the formats most brands are still funding: display ads, pre-roll ads, sponsored content.
What drives them isn’t some promise of value — how they could look in your clothes, how good your burger might taste, a healthy routine they might build. It’s tangible value, some kind of reward.
Below, we get into why Gen Z isn’t responding to the same old ads anymore, what the data says about their behavior, and how you can use cash back offers to acquire Gen Z customers and keep them coming back.
Why traditional ad formats are losing Gen Z
Gen Z grew up native to the internet and native to ads. They’re trained in tuning them out. But it’s not just ad blindness that’s making them hard to reach.
Economic pressure
Per EY’s Future Consumer Index, 43% of Gen Z are very concerned about the economy, making them more deliberate about every purchase.
An ad that interrupts their day without offering anything valuable (a discount or reward, for example) gets ignored and creates friction with the brand.
Absence of loyalty
Salesforce’s Connected Shoppers Report found that 81% of Gen Z and Millennial consumers switched brands in the past year. And McKinsey found they’re five times more likely than older generations to believe newer brands are better or more innovative than established ones.
To catch and maintain their attention, you have to approach your marketing differently. As Blake Ziolkowski, Kard's Sr. Director of Merchant Sales, put it recently:
“You need to find people in channels where they want to be found, where they'd be excited to give your product a try. If you hit them in the wrong channel, and too often, you could immediately deter them from your brand.”
Rewards are coming out on top
The preference for rewards shows up consistently in behavioral data:
- Research from PayPal and Reach3 Insights found that 81% of shoppers make purchase decisions based on rewards, and 63% say rewards make them feel more valued as a customer.
- An IPSOS survey found that 70% of Americans prefer to pay by card specifically to earn rewards or points.
- A separate Bank of America consumer survey found that 65% of Americans have opened a new credit card specifically for the rewards — and 69% cite cash back as one of their most valued reward categories.
- After their first experience with card-linked offers, 93% of cardholders plan to use them again in the next year.
This kind of enthusiasm and repeat intent doesn’t appear in display or social benchmarks. And it’s because rewards reach buyers when they’re already in a money mindset, checking balances, reviewing transactions, engaging with their banking app. An offer surfacing there feels like a benefit from an institution they trust, not an interruption from a brand trying to get their attention.
Cash back isn’t just a discount
A site-wide discount is visible to everyone, including existing customers who would have bought anyway. You’re subsidizing purchases that were going to happen regardless.
Plus, you’re hoping that they continue to buy from you afterward without having to offer another discount. Chances are, they gave you their email and phone number to get a 15% discount and immediately unsubscribed. They’re probably not coming back without some kind of lure.
A targeted cash back offer through a commerce media network works differently:
1. It’s tied to a transaction record
That means you only pay when someone makes a purchase after using the reward — you’re not paying for impressions that may never convert.
2. It reaches buyers inside environments they already trust and use daily
Cash back rewards aren’t interrupting a social media feed. Instead, they’re like candy at the grocery store checkout. An “Oh yeah, I should use/get that,” rather than a “Ugh, get out of my way,” style ad.
3. It measures incremental value
At Kard, every cash back offer campaign goes through our standard incrementality testing, so you know that offer actually influenced purchasing behavior, they didn’t just reward actions that would likely have happened anyway.
4. It fosters loyalty
Newer dynamic offer types (like the ones Kard recently launched) are designed to engage consumers at every stage of their purchase journey and keep them coming back for more.
For example:
- Tap-to-boost offers help customers get more bang for their buck. If they tap, their reward might go from 5% to 8% cash back.
- Spend-tiered offers incentivize users to keep spending at your store. They get a bigger reward if they spend a specific amount (or more).
- Purchase count offers work similarly, giving cardholders a reward after a specific number of purchases within a given timeframe (much like a loyalty punch card).
- Progressive offers give customers a higher reward for each additional purchase (2% cash back on the first purchase, 4% cash back on the second purchase, 6% cash back on the third purchase).
- Tap-to-renew offers: After making a purchase and receiving a reward, a customer can extend the offer to their next purchase, leading to more card activity for the issuer and repeat business for the brand.
Other rewards can create urgency that prompts Gen Z to act:
- “Flash” offers that can only be redeemed during a certain period of time.
- “While supplies last” offers that can only be redeemed while it’s still available. Once a set number of users have redeemed an offer, it closes.
With all these benefits, it’s not surprising that commerce media will represent close to a quarter of advertisers' digital media budgets in the US by 2029.
And according to Runa’s consumer research, 60% of rewards program participants plan to rely more heavily on rewards in the next 12 months — with that number climbing to 64% among Millennials and 62% among Gen Z specifically. Brands that build presence in this channel now have a structural advantage over those that wait.
What good looks like: offer structure, targeting, and results
A flat cash back offer for new customer acquisition, a tiered structure for repeat purchase, a personalized offer for high-AOV categories, each serves a different objective. Here’s when to use each.
Flat cash back for acquisition
The simplest structure is often the most effective for getting new buyers in the door.
- A popular footwear brand ran a 5% cash back offer and gained 35% more market share in a matter of months
- Fazoli’s, a QSR chain, ran a 4% offer and brought in 81% brand-new customers, with over 6,000 redemptions per week and $530K+ in attributed sales.
- Cicis Pizza generated $2.7M in attributed sales — 72% from first-time diners — at 11:1 ROAS.
The consistent pattern across all three: these offers were pulling in new ones who’d never bought before.
Tiered offers for repeat purchase and LTV
If you offer a diminishing discount structure — 15% off on a first purchase, 10% off on a second, 5% on the third — you not only encourage repeat purchases, but also gain higher average order values.
A continuous rewards cycle shows your customers you care about their loyalty, which lowers the chances they'll bounce to another brand, improving overall retention and LTV.
A food delivery service giving lapsed customers a 10% cash back reward on each delivery (up to $5) resurrected over 6,000 customers in just 7 weeks.
The resurrected customer test group saw a significant increase in AOV (11.4%) — a big accomplishment, since this group already had high baseline spend.
Personalized offers for high-AOV categories
When the price of your product is high, a targeted cash back offer can be the nudge folks need to splurge.
A global electronics retailer ran a 7% cash back offer and saw a 166% increase in average order value. 80%+ of redeemers were Gen Z cardholders.
A grooming brand used a 3.6% offer to acquire customers at a $9 CAC on products retailing between $80 and $100, at 10:1 ROAS. Cash back gave those buyers a reason to choose the premium bundle over the entry-level option.
Gen Z isn’t unreachable
The brands building trust with this generation are the ones that show up with a relevant, valuable offer in a channel Gen Z already uses.
Kard’s network is 58%+ Gen Z and Millennial cardholders. See how brands are using cash back offers to reach and convert them, or schedule a demo to talk through what a campaign could look like for your brand.
