Credit Card Cash Back Points as an Add Back?

searcher profile

June 17, 2025

by a searcher from Northwestern University - Kellogg School of Management in Chicago, IL, USA

Hi, has anyone seen CC cash back points added back to SDE? Seems a bit intuitive to do so, but not a true reflection of the business, or is it?
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commentor profile
Reply by a professional
from The University of Georgia in Atlanta, GA, USA
By "add-back" I presume you mean, deducted? In my experience, such points are a deduction from earnings as they don't represent operating results, but rather a form of financing and other incentive.
commentor profile
Reply by an intermediary
from Clemson University in Raleigh, NC, USA
It's not an add-back because it's not an expense - it's income. No different than a vendor volume rebate. If the buyer will receive the cash back as the seller has it is a defensible component of SDE/EBITDA and is acceptable to lenders. If a buyer of mine was not willing to include cash back as a component of SDE/EBITDA I would (SIC) have them send quarterly payments equal to the cash back income to the seller in perpetuity. Does not matter if it's operating income or passive income - it's income that the business is deriving from purchasing and the buyer will receive benefit from.
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