Both cut the effective price, but behave differently. This entry is the comparison; for the definition of the reward itself, see Cashback.
Timing and cash flow. A discount reduces revenue on the order itself, so the business collects less from day one. Cashback lets the merchant collect the full price first and pay the reward later, so the cost is deferred and can be tied to events such as the end of the return window.
Conditions. A discount is usually unconditional once the code or promotion applies. Cashback can be pending, then matured or confirmed, and can be cancelled if the order is refunded or returned. That makes it easier to pay only for purchases that stick.
Accounting and margin. A discount appears as a lower sale price. Cashback is typically a separate payout or liability, which can leave the listed price and the reported order value intact. How either is booked depends on local accounting rules and should be confirmed with an accountant.
Behaviour. A markdown reads as a cheaper product and can train shoppers to wait for offers. A reward credited later reads as money earned and gives a reason to return.
Why it matters for brands
The choice affects margin timing, return risk and how the brand is perceived on price. Many brands use a discount to close a hesitant first order and cashback to reward and bring back customers, testing each against their own numbers.