I'm more a fan of cash rewards out of fury over travel mile redemption restrictions, but some cards do it right. Absoluely, and yet another example of risk pooling. It's entirely true that the billions of us paying with credit cards effectively raise the cost of goods a few percent, but merchants long ago already absorbed the increase, which in reality simply shifts the risk of fraud to the credit card companies, who treat the whole thing as an insurance play carefully risk-mitigated by actuarial tables.