Abstract Seed dispersal by scatter‐hoarder corvids is key for the establishment of important tree species from the Holarctic region such as the walnut (Juglans regia). However, the factors that drive animal decisions to cache seeds in specific locations and the consequences of these decisions on seed fate are poorly understood. We experimentally created four distinct, replicated habitat types in a Mediterranean agricultural landscape where the Eurasian magpie (Pica pica) is a common scatter hoarder: soft bare soil; compacted bare soil; compacted soil with a dense herbaceous cover; and soft linear bare soil made up of the irrigation furrows that separated the rest of the treatments. We also experimentally placed visual landmarks (stones, sticks and bunches of dry plants) to test if magpies use them to place seed caches. Walnut dispersal from feeders to the habitats was monitored by radiotracking and camera traps. A sowing experiment simulating natural caches tested the effect of caching type on seed germination and seedling emergence. Seed mass was controlled for the dispersal and sowing experiments. Magpies selected the two habitats with soft soil, and avoided the one with compacted soil, to cache nuts. Seed mass did not affect dispersal distance, germination or emergence; however, heavier seeds were cached more often under litter and in the habitat with herbaceous cover, whereas lighter seeds were more often buried in the soft bare soil habitat. Seed burial under soil or litter determined seed fate, as there was virtually no emergence from unburied nuts. There was no evidence of any effect of the visual landmarks. Synthesis. The consequences of seed caching for seedling early establishment are driven by a fine decision‐making process of the disperser. Magpies seemed to ponder the characteristics of the habitat and the seed itself to determine where and how to cache each nut. By doing so, magpies reinforced the quality of seed dispersal effectiveness, as they cached walnuts in locations that enhanced both seed survival and seedling emergence.