This increasingly used term can be used in several ways -

1. Cash in your hand
When you pay for something with a credit or debit card, the salesperson may ask you if you'd like "cashback". The total value of the goods you're purchasing will be charged against the card plus the amount you require. So if you'd like £10 cashback and your goods cost £100 the total charged on the card will be £110 and you'll be handed a crisp £10 note.

2. Cash returned at a later date
Often this is used as a sales gimmick for expensive items such as cars or pensions. For example, it means paying £12500 for the car but in 6 months the car manufacturer gives you back £500. Basicly it's a reward for investing your cash up front.

3. As a whoop of joy
Imagine you go into a shop and find a £200 jacket that's really nice. You've gotta have it but the price is a bit steep. After some debating and wondering how your paper-round is gonna cut it, you take it to the salesperson and they tell you the price is wrong - it's actually £150 in the sale! "Cashback!!" :) Basically it's used to express you've done well out of a deal.