- This story was clarified on 7 November; please see final paragraph
A financial services firm has launched a credit card scheme that allows charities to claim up to 15 per cent cashback on purchases made by supporters at participating retailers.
Under Tuxedo Money Solution’s spend and reward card scheme, charities issue supporters with prepaid credit cards branded with their logo. Supporters then pay money onto their cards and the charity receives between 5 and 15 per cent of the purchase price when they use the card to pay for goods at participating outlets.
The scheme also gives the cardholder the option of keeping some of the cashback reward themselves.
Tuxedo says that the percentage paid is higher than the traditional rate of between 0.5 per cent and 1 per cent that most charity credit cards pay.
Retailers that have agreed to take part so far include B&Q, Comet, Halfords, M&S and Sainsbury’s.
There is no cost to the charity or cardholder when the card is used to buy goods. Instead, the retailer pays fees to its bank to accept cards and some of the fees are shared with Tuxedo to cover its processing and administration costs.
The Apprenticeship Trust, a community interest company that helps young people to find employment, is already using the prepayment card. Under the scheme, apprentices are provided with a credit card that earns cashback for the charity.
The firm said in a statement: "Cashbacks can be used to incentivise consumers to keep loading and using their card, therefore earning benefits for themselves as well as raising funds for the organisation."
- The original release described the card as a "prepaid credit card". It is in fact a prepaid MasterCard or Visa card that does not allow the cardholder to purchase using credit.