What are cashback sites?
When you make a purchase online, the company that leads you to the site sometimes gets a financial reward. Cashback sites share that reward with you.
How do cashback sites work
Cashback sites work by being an online intermediary. Instead of going directly to an online store, you go through a link from a cashback website. The retailer still sells you your item, as normal, but they will send the cashback site a portion of the profits, and the cashback site forwards a percentage of that money back to you.
How do I use cashback sites?
Before going to a company's website to purchase an item, first check if they have a deal with your cashback company of choice. If they do, use their link to land on the company website, then shop as usual.
The key here is to clearly make sure the cashback site is part of your user journey. When you click around online you leave a “cookie trail” in your browser history, so retailers will know where you came from. This trail is essential for proving that you are entitled to a reward.
Clearing your cookies
So be careful. If you first go to a website directly and find something you like, then use a cashback link and buy, you may not be entitled to the reward. That’s because the trail will show that you were already there looking around. To get around this, make absolutely sure you clear your cookie history in your browser, then click the cashback link – that way it will appear that the cashback link is the start of your journey.
It’s worth noting that clearing your cookie history is an annoyance for many people. Although it takes only a few clicks, this also deletes any prepopulated and saved usernames and passwords.
There are a few cashback sites to choose from. The comparison site Which? recommends Quidco and TopCashback as they are more established and perhaps a bit more reliable on the customer service side.
When you create an account with a cashback site be sure to read the fine print and look out for hidden fees. Some are paid services in return for greater rewards. And you may have to “earn” a certain amount of cash back before you’re able to withdraw it. Some will reward you for referrals to friends too. Pick a service that best matches your needs and shopping habits.
To help you decide if a service is worth it, try tracking your activity with Money Dashboard. It can highlight any cashback transactions and show you how much you are earning in cashback over time.
What purchases qualify for cashback?
A wide range of products and services have deals with cashback sites. You may be surprised.
Many shops on the high street have deals. You can get cashback on some flights and hotels. Some phone service companies have deals for mobile phone contracts. You may even find deals with financial companies on insurance. So be sure to check before signing a service contract.
If you buy a product in a physical store you may be able to claim cashback if you submit a photo of your receipt.
Getting your money back
After you earn a certain amount of money back you may get that deposited back in your bank account, get gift cards, or discounts.
You are unlikely to get rich or earn a significant income with cashback, so set your expectations first. You may earn a passive income from it, and pay less overall, but this is unlikely to be life-changing. (Read more about how to earn a passive income.)
Things to avoid on cashback sites
Cashback sites are worth it if you use them often, especially for bigger purchases and rolling contracts like insurance and mobile phones. Otherwise, fees associated with cashback accounts may outweigh the benefits.
Don’t buy things you don’t need simply because of the discount. And don’t be fooled by the promise of cashback if you can get a better deal somewhere else without cashback. For example, £50 back on a £200 hotel room might sound amazing, but you may be able to get an even better hotel room for £125.
And don’t forget to be mindful of your cookie trail. You may not be able to claim the rewards if the cookie trail works against you.