Cashback – Money for Nothing?
In one short sentence cashback websites work by enabling you to receive free cash when you buy from your favourite retailers. So, as far as you are concerned, and in the words of Dire Straits, there is ‘Money for Nothing’… even if the chicks aint free…
How do I get my hands on free cashback?
- Sign up with one of the many cashback sites available (I prefer TopCashback in the UK and CashbackClub in Australia).
- Instead of visiting the website of your favourite retailer go to your chosen cashback website first. Then you search for the retailer (eg. BT Broadband in the UK) and enter their website via your cashback site.
- Then you shop as you would normally in your favourite retailers’ website and place your order as normal.
- The cashback website records that you visited your favourite retailers’ website and that you placed an order.
- A month or two later, (sometimes up to 120 days later so your patience is rewarded eventually!) the cashback site adds some £££’s or $$$$’s to your cashback account. You can then transfer the cash to your own bank or PayPal account and spend the free cash how you want & when you want (or perhaps you could even transfer it to your ‘rainy day savings account’)
What’s in it for the cashback sites?
Cashback websites are profit-motivated businesses. Their purpose is to make money, you can be sure of that. Some websites may be noble and raise money for charities or non-profit organisations and some may donate a proportion of their profits to worthy causes. But they all make money.
How do cashback websites make money if they don’t charge the consumer?
The good news is that the reputable well-known and established cashback websites don’t make money by ripping off the consumer (just to be clear a consumer is you and me shopping online in front of the TV on our phones and ipads).
The consumer receives cash on their spending that they might not otherwise have received and the cashback site also makes some money.
So, the cashback websites make some or all of their money from the retailer (also called merchant by the cashback sites and credit card companies and other financial institutions). They make this money through ‘Affiliate Marketing‘ (… in summary the retailer/merchant pays the affiliate/cashback site a commission for advertising or promoting their products and services… the cashback site then pays some or all of the commission to you and me!).
The TopCashback website claims that they helped 8 million members save over £40million during 2017… that’s a lot of free cash if you ask me!).
Yeh, Yeh… Nothing is ever free! What’s the catch?
OK, I agree. I think there is always a catch when there’s free stuff flying around. Someone somewhere is benefiting somehow and it is costing someone somewhere loadsa money.
In the case of cashback websites the cost of the free cash is being paid by your favourite retailers. It is worthwhile for the retailers to spend a huge amount of ££££’s and $$$$’s on affiliate marketing as part of their advertising and marketing budget to help spread the word about their products and services. The retailers use their affiliates (the cashback websites) to do their promotion for them and they know they will get a good return on the money they spend by increasing sales.
How else do the cashback websites make money?
Some of the cashback websites make money by keeping some of the commission paid to them by the retailer through affiliate marketing rather than paying it all over to you. They may also receive money from other forms of advertising on their websites and may also have an extra revenue stream by charging a subscription to their members for having a premium or upgraded account that gives higher value rewards and payouts.
Like Facebook and many other large organisations they will also have access to a large amount of valuable data on me and you… our age, gender, what we buy, when we buy etc etc etc. They may or may not sell this information directly to third parties but you can be sure it is used for targeted marketing so that the cashback sites show us products, services and the latest offers that will appeal the most to us.
If I join a cashback site will I be bombarded with SPAM?
It’s in the interest of cashback websites to maintain long-term, trusting relationships with both their members (us consumers buying loads of stuff day in day out) and also with their retailers who pay the commissions. Every decent business hates spam these days because it just doesn’t make commercial sense to upset your customers. Therefore, in my opinion, if you choose to sign up with reputable cashback sites you won’t be spammed. They are likely to add you to their mailing lists like most businesses do these days, but you can unsubscribe from these at any time.
I have earned hundreds of £££’s of free cash through TopCashback and never had any issues with spam. My membership with CashbackClub is still in it’s early days but I have every expectation that they will be as ethical as their UK counterparts.
What type of spending can I earn Cashback on?
TopCashback in the UK have over 4,770 stores listed on their site including fashion stores, entertainment and travel, utilities and telecoms and even insurance and financial stores. So, you can earn cashback on your car insurance and home insurance, your monthly broadband mobile phone subscriptions, and your flights and accommodation on your holiday of a lifetime to Hawaii (as well as cashback on the shoes and clothes and skincare you take on your holiday… and even the suitcase!)
CashbackClub in Australia don’t have so many connections with stores (although they do have hundreds and hundreds and hundreds of retailers to choose from), but what I’m particularly impressed by is their ability to pay you cashback annually on your existing Super Fund balance (you don’t have to transfer your Super pot to another provider to get the cashback!). All you have to do is fill in an online form that permits Cashback Club to be recognised as the broker and they will start receiving the commission that your Superannuation provider previously paid to another broker… the difference being the previous broker didn’t share any of the commission with you!
What’s your experience of using cashback websites? Let us know through our contact us page or by leaving a review.
Disclosure: After reading this blog if you decide to sign up to either TopCashback or CashbackClub I will receive some free money through the affiliate marketing process that the cashback websites use… I promote their services and they pay me a bit of commission. Don’t worry, it’s not alot of wonga and definitely not enough to buy myself another Bentley Continental GT… this month at least!