What Is a POS Withdrawal on a Bank Statement?

A “POS withdrawal” on a bank statement refers to a financial transaction where cash is acquired during a debit card purchase.

Defining a POS Withdrawal

A POS withdrawal is a transaction where a consumer obtains cash directly from a merchant at the point of sale. “POS” stands for Point of Sale, which is the physical or virtual location where a transaction occurs, such as a checkout counter. This type of withdrawal is commonly known as “cashback” and appears on a bank statement labeled as “POS Withdrawal,” “Cashback,” or “POS Debit.” It signifies that funds were withdrawn from your bank account at the same time you made a purchase.

This process involves using a debit card, typically requiring a Personal Identification Number (PIN) for authorization. The total amount debited from your account includes both the cost of your purchase and the additional cash you received. This direct cash disbursement from the merchant’s register distinguishes it from other methods of obtaining cash.

How POS Withdrawals Work

A POS withdrawal functions through the “cashback” service offered by many retailers. When a customer uses a debit card to make a purchase, they can request an additional amount of cash. This requested cash is added to the total cost of the goods or services. For instance, if groceries cost $50 and the customer requests $20 cashback, the total transaction debited from their account will be $70.

After the transaction is authorized, typically through PIN entry, the merchant provides the requested cash from their register. The point-of-sale system communicates with the customer’s bank to verify funds and process the combined amount. This integrated process provides immediate cash without needing a separate trip to an Automated Teller Machine (ATM).

Distinguishing from Other Transactions

Unlike an ATM withdrawal, which exclusively involves obtaining cash from an Automated Teller Machine, a POS withdrawal occurs during a purchase at a merchant’s location. ATM withdrawals are solely for cash and may incur specific fees. POS withdrawals are often offered without an explicit fee from the merchant, though the customer’s bank might impose one.

Regular debit card purchases involve only the exchange of money for goods or services, with no cash provided. While both POS withdrawals and standard debit card purchases use a debit card at a point-of-sale terminal, the key distinction lies in the cash component of the POS withdrawal. A “POS withdrawal” specifically denotes the receipt of cash alongside a purchase.

Common Scenarios and Practical Considerations

POS withdrawals, or cashback, are widely available in various retail environments across the United States. They are frequently offered at grocery stores, supermarkets, pharmacies, and convenience stores. This service provides a convenient way for consumers to access small amounts of cash while completing their shopping.

Customers should be aware of potential transaction limits set by merchants or banks. Many merchants establish maximum withdrawal amounts, commonly ranging from $5 to $50. Banks also impose daily or monthly limits on debit card withdrawals, including those at points of sale. While merchants typically do not charge a separate fee for cashback, a customer’s bank might assess a fee, particularly if the transaction is out-of-network or exceeds certain limits.