What does cash back refer to in a debit transaction?

Cash back in a debit transaction specifically refers to a situation where a cardholder can receive cash at the point of sale, in addition to making a purchase. This means that when a customer buys something—let's say groceries—they can request an additional amount of cash from the merchant, which is then added to the total sale price.

For instance, if a customer purchases $50 worth of goods and requests $20 cash back, their account would reflect a $70 debit. This option is typically offered at retail locations during a purchase, and it enhances the convenience for consumers, allowing them to access cash without needing a separate ATM withdrawal.

The other choices do not accurately describe the cash back functionality associated with debit transactions. For example, the first option does not correctly represent the process, as cash back is not strictly equal to the cost of goods but rather adds to the total transaction. The second option misrepresents cash back as a refund feature, which does not align with how cash back is utilized during purchases. Lastly, the fourth option describes an ATM situation, which is distinct from the cash back transactions that occur during retail purchases.