Updated: 30 September 2006
How does cashback shopping work?
Cashback sites have clickable links to online retailers that they get from organisations called affiliate networks. Some cashback sites have over 1,000 such links, meaning
there's plenty of choice of retailers for you to shop with and get cashback from.
See my Retailer comparison pages (links on menu left) for a selection of just some of the retailers, large and small, available
on cashback sites.
So what is the actual process?
You log in to a particular cashback site.
You choose the retailer you want to buy from. The cashback offer for the retailer may be a set amount, e.g., £40 for a contract mobile
phone, or it may be a percentage of your purchase total, e.g., 10%.
You click the link to the retailer, you are taken to their site and you make your purchase in the normal way. At this point the affiliate
network will be tracking your transaction, knowing that you clicked through from a link on a particular website (i.e., the cashback site).
Usually within a day or two, the affiliate network reports the transaction back to the cashback site and states how much commission is due to be
paid to the cashback site.
The cashback site credits your account with a proportion of this commission. See the Site comparisons pages for the typical proportions offered by each cashback site.
The cashback becomes payable to you when a) the commission has been received by the cashback site from the retailer via the affiliate network
and b) you have reached the minimum payout level for the cashback site (again, see my Site comparison pages for this information).
Once both these things happen you can claim your cashback from the cashback site.
Note that typically your cashback from purchases will become confirmed/payable about 2-3 months after the transaction. This is to allow for return of goods etc
so that retailers don't get stung. However, eTenner & Rewardcircle actually confirm and make payable most
cashback from smaller transactions within a few days - before they have received the commission themselves.
How can retailers afford to offer these commissions?
It's all part of their marketing/advertising strategy. In return for other websites having a link to their site, the retailer is willing to pay
commission for sales or click-throughs (see
Daily Cashback tips) made via the link.
All of which results in a nice discount for you if you shop using cashback sites!
But won't it mean I pay higher prices than usual?
No, absolutely not. The prices you get via cashback site links are the same prices that everyone else gets. The only difference is that you are
being cleverer than most and getting extra discount on top.
As well as this, you're usually able to use retailers' online discount codes (often shown on cashback sites or in their Forums) in conjunction
with cashback offers, making for even greater savings!
But surely there's some other catch?
Again, the answer is no. The only restrictions are those the cashback sites set in terms of minimum payout levels, but with just one big-ish
purchase you might exceed this in one go.
Finally, there's no limits on the amount of cashback you can earn with cashback sites and with 98% of retailers you can make repeat purchases
and get cashback every time!
