CASHLESS Rebate Program in Japan

How to save on consumption tax using CASHLESS payments in Japan

Japan has long been a cash-oriented country. Although today one can find contactless and mobile payment terminals in Japan, and internet baking is developing fast, it was not so long ago that cash was the only way to make a purchase. Even Japan-issued bankcards used to serve as mare saving wallets.

However, Japan gets ready to host the Olympics and it is catching up with the cashless technologies to suit both visitors and locals. Besides being extremely convenient, cashless payments in Japan also provide an opportunity to save on consumption taxes, which is especially handy after the tax hike earlier this October.

In this article, you will find guidelines about how to use CASHLESS rebate program in Japan to save on consumption taxes.

What is the CASHLESS rebate program in Japan?

After the consumption tax went up from 8% to 10%, the Japanese government unrolled the program of establishing the cashless rebate program that aims to achieve two goals: helping people cope with the increased financial burden and getting them used to digital payments. The program is under the jurisdiction of the Ministry of Economy, Trade and Industry (METI) and offers 2% and 5% rebates for purchases made using cashless systems like Rakuten JP, Amazon JP, Yahoo Japan Shopping, etc.

2 million stores in Japan will provide CASHLESS rebates starting October 1, 2019.

The program is running from October 1, 2019, to June 30, 2020 in the qualified stores. The website of the rebate program contains detailed information. However, it is available only in Japanese. Below you can find the key takeouts about the program and how to benefit from.

How does the CASHLESS rebate program work?

Consumers can get rebates from their cashless purchases when they make purchases in the shops that are part of the program. Such shops have a special sign or banner (like the one under the title of this article) and the indication of rebate amounts: 2% or 5%.

There has been a lot of confusion about the combination of product types and how they are taxed. However, with the cashless rebate program all items in the participating shops are eligible for rebates.

There several ways to collect the rebates depending on the payment methods you use. For some of them you can get the rebate instantly, for some of them you have to wait; some come in money equivalent, some are calculated in points of the service providers. More information on that will follow below.

How to find eligible stores?

The official website provides the location map. There is also an iOS application. The number of stores is constantly growing as they are supposed to join the program in waves of 500,000 every 10 days starting October 1, 2019.

What payment methods are accepted?

Credit/debit cards issued in Japan: plastic cards or their equivalents on Apple Pay (iD, QUICPay) or Google Pay. Here you can find the full list of eligible cards in Japanese.

Japanese e-money cards (Suica, Тanaco, WAON, etc.): plastic cards or their equivalents on Apple Pay (iD, QUICPay) or Google Pay.

Japanese QR Code payment apps for smartphones (PAYPAY, Origami Pay, Rakuten Pay, etc.). Here you can find the full list of eligible e-money and QR payment systems in Japanese. 

What kind of rebates are available?

Instant returns in shops providing 2% rebates.

It is important to remember that not all shops in the same chain can provide these rebates. That is why it is good a good idea to always check if there is a banner at the entrance that notifies the availability of rebates at each particular store. For example, franchise stores for 7-Eleven, Lawson, Family Mart can provide instant rebates that you can see in your receipt.

Post-payment rebates of 2% or 5%

These rebates are calculated during the purchase. However, the refunds are repaid at the end of each month in different ways depending on which type of payment you are using:

  • Post-pay: for purchases made with the credit card the card-issuing company will make all the calculations and can deduct them from the credit bill. These rebates are not connected in any way to the point systems.
  • Instant pay: for purchases made with the debit card the card-issuing company will make all the calculations and can send them to your bank account or instantly deduct the appropriate sum from the total amount during the transaction. These rebates are not connected in any way to the point systems.
  • Stored values: for purchases made with prepaid e-money cards refunds rebates are returned at the end of the month as points. You will get points corresponding to your card type: if you paid with Suica you will get JRE points, if you paid with Rakuten EDY you will get Rakuten points and so on. The same goes for QR code payment systems like PayPay. However, in this case, your rebates go to your account in the payment system. Remember that there is a limit to the number of points per month that you can have in rebates. Usually, it is 15,000 points/months. However, there can be limits per purchase or per card charge. Thus, be sure to check the rules beforehand.



What do I need to do, to start getting rebates?

If you use credit/debit cards issued in Japan or shop at places offering instant rebates at transaction there is absolutely nothing you have to do to collect your benefits.

If you use e-money or QR-codes, you need to register your prepaid card with the appropriate points system. It is opt-in participation.

As you can see, the system is rather easy to use. After setting up your accounts for e-money or point systems, all you have to do is start making purchases. More and more shops will join in until there are about 2 million stores in Japan where you can get CASHLESS rebates.

"Otsumami" - a bite size snack:

Between October 1, 2019, and June 30, 2020, save on consumption taxes in Japan by collecting 2% or 5% of the initial price in rebates.

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