Do your online shopping via a cashback site and you'll get money back on anything you buy. But how does it work? We look at how you can get a little extra back when you shop.
What is ‘cashback’?
Cashback websites give you a percentage of anything you spend back as cash when you use them to do your shopping; some of the most popular are Quidco, Top Cashback, and Cashback Kings.
The idea of getting money back on your purchases may seem too good to be true, but cashback websites are a way to do just that.
Typically they consist of a number of directories that list the retailers, and other providers of goods and services. Then, each time a customer makes a purchase with a retailer that they recommend, they are paid a referral fee; a percentage of which they will pass on to you as cashback.
Essentially this is a win-win situation for everyone: the retailer is happy because you are buying their goods, the cashback website is happy because they get a referral fee from the retailer for being the middle-man and you as the customer get a share of the profit as a reward for shopping with that retailer.
There are a number of different cashback websites to try, each with different rules and conditions; it’s worth looking at each and seeing which will work best for you. Through them you’ll be able to purchase a whole range of products from everyday commodities such as groceries to electronics and toys.
Quidco
- Annual fee: £5
- Sign-up fee: None
- Sign-up bonus: None
- Commission percentage: 100%
- Refer-a-friend schemes: None
Quidco is one of the most popular cashback sites around. It allows you to keep all the cashback you earn through the site in return for a £5 a year admin fee. The £5 fee is deducted from your earnings automatically, but after this you can earn cashback to your heart’s content.
Plus, Quidco has recently introduced a new opportunity for you to earn cashback on what you buy, by allowing you to earn while you spend on the high street.
This means that you can get a percentage of the amount you spend at a number of high street retailers such as Halfords and Greene King pubs and restaurants as cashback, simply by registering your debit card details with Quidco. Then, whenever you use that debit card to make a purchase at Quidco’s partner retailers, you’ll automatically have cashback which will be credited to your online Quidco account.
Greasy Palm
- Annual fee: None
- Sign-up fee: None
- Sign-up bonus: £2.50 cashback
- Commission percentage: 25%
- Refer-a-friend schemes: Sign up a friend and get £7 cashback per friend
Greasy Palm, like Quidco, allows you to register your debit card details then shop as usual on the high street. You'll rack up a percentage of what you spend as you go. Greasy Palm also offers a £2.50 sign-bonus when you join the site.
Top Cashback
- Annual fee: None
- Sign-up fee: None
- Sign-up bonus: None
- Commission percentage: Up to 110%
- Refer-a-friend schemes: Sign up a friend and get £1 cashback per friend
Top Cashback is another popular choice because unlike Quidco, it doesn’t impose an annual fee. This means it is completely free to use from the word go. However this doesn’t necessarily mean that Top Cashback is the best site to use, as other sites may list more retailers or or give you a better rate of cashback on your purchases.
Cashback Kings
- Annual fee: None
- Sign-up fee: None
- Sign-up bonus: None
- Commission percentage: 100%
- Refer-a-friend schemes: Sign up a friend and get £1 cashback per friend
Cashback Kings doesn’t impose a joining or subscription fee, making it free to use. However, it may not be the best cashback site for you if it doesn’t list retailers you would usually use or if it pays cashback at a lower rate than other sites.
Give Or Take
- Annual fee: £5 if you choose to keep the cash (none if you give to charity)
- Sign-up fee: None
- Sign-up bonus: None
- Commission percentage: 100%
- Refer-a-friend schemes: None
Give Or Take adds a new twist to the cashback idea by allowing you to choose what you do with your earnings; either give them to charity or take them into your own bank account. They currently list over 700 online stores to get shopping with, and you can give to charities such as Barnardos, Christian Aid, and Shelter.
What’s the best way to go about getting cashback?
If you want to be especially savvy it’s a good idea to work out exactly what you want to buy first, then find the best deal online (or on the high street if you’re using Quidco or Greasy Palm) by comparing prices from different retailers.
Once you’ve found the best price for the item you’re interested in, then you should visit each of the different cashback sites to compare exactly how much cashback you would get by buying the item through them. Then, simply shop with the site that pays you the best rate on your purchase – as with anything, loyalty to one particular cashback site isn’t likely to pay.
Smart Cashback is a useful website that can help you compare the current cashback opportunities available for different retailers. However the comparisons here aren’t necessarily guaranteed to get you the best deal, and aren’t necessarily going to be updated regularly so it’s worth having a root around the sites yourself too.
For people who shop online regularly and send a lot of electronic payments through cyber-space, it really does make sense to get some money back on your spending by using a cashback site.
What else should I consider?
Think about why you’re making the purchase
One of the most important things to steer clear of once you start using cashback sites to do your online shopping is simply buying something just to get the cashback. Though a particular deal may be tempting, if you wouldn’t consider buying it without cashback then it’s not worth getting it just because you receive a little something back – the cashback you earn won’t cover the cost of the purchase so it’s essentially pointless.
Additionally don’t make the decision to make your purchase with a particular retailer based solely on the amount of cashback you’ll get. Though the cashback percentage may be high, you may still be able to purchase the item from a retailer that doesn’t pay cashback for less.
If you want to save money, it’s important not to let the excitement of earning cloud your judgement – you should still look elsewhere too in order to make your money go as far as it can. It’s worth comparing the price of a non-cashback purchase with the price you’d pay incorporating cashback to see which works out cheaper in the long run.
How quickly do you want the cash?
Some cashback sites do place a threshold on how much you must earn before you are able to get your hands on your earnings and transfer the money to your bank account, so this may be worth taking into consideration if you need the cash quick. Also, bear in mind that some cashback earnings can take several months to be cleared in your cashback account and then transferred to your bank account.
There are also some reports of earnings getting lost between the retailer, the cashback site, and your account, meaning you don’t get paid as much as you’d hoped – though these sorts of problems can usually be resolved by contacting the cashback site you purchased through.
Buy what you’d buy anyway
Cashback sites are definitely a good way of building up a little extra cash on the side while doing your ordinary shopping – a ‘thank you’ from the retailer for choosing to buy from them. However they will only really benefit your pocket if your purchasing habits aren’t influenced by how much cashback you’ll get – buy what you’d buy anyway, and you may have found a nifty way to get something for nothing.
Double your cashback
It’s also worth mentioning the potential earning ability of cashback credit cards. These work by allowing you to earn back a percentage of what you spend on the card, though there are catches to watch out for such as high interest rates.
Cashback credit cards can be a great way to earn as you spend but only if you can pay off your balance in full every month to avoid any interest accruing. If you do get the hang of using them however, combining them with shopping through cashback sites can mean you get double the cashback.
