Rewards Programs

How do I determine my average margins after implementing a Kohls cash back rewards program at my retail stores?

I own a few retail stores and need to start offering some discounts to be more competitive with my competitors. I've decided to use cash back coupons as a guide for the discounts. My plan is to offer cash back on every transaction (except for transactions when a customer redeems their rewards). The cashback will be 7-10%. Let's use 10% for the purpose of this example. If my average gross margin right now is 50%, would my future margins simply go down to 40% after the rewards are added into the equation?