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What is cashback?Cashback incentives work as a way of motivating consumers to buy a service or product and receive a set amount or percentage of the value of the product back at a later date.
These purchases can be made online or in-store and users must follow the process set out by the cashback provider in order to receive the percentage back.
There are several popular cashback sites available, with cashback deals being continually updated to cover an array of retailer offers.
How does cashback work?The way cashback works is relatively simple, but to gain a percentage of the money back, the user must follow the process below:
Select a well-known cashback website and sign-up for a free accountAdd your payment card details and peruse their offersOnce you’ve found something you’d like to purchase, follow the link from the cashback website to the retailer as normalOnce the transaction has been complete, the cashback website will be notified automaticallyThe retailer will then send you the product you have ordered as usualDepending on the offer, a percentage of the item purchased or a set amount will then be credited back to your bank account in due courseThe amount of time it takes for you to receive your cashback can vary from website to website and also the retailer who the item was purchased from. It can take as little as a few days to several months to receive your cashback so you’ll need to check the terms and conditions of your chosen card and retailer.
Ordering directly from the retailer and not via the cashback website’s link will not entitle you to the cashback once purchased, so it’s imperative you follow the steps above to take full advantage.
Most cashback sites do not charge a fee as they make their money back on commission from the retailers, but you may come across the odd site that does, so just be aware of any charges before signing up.
Example cashback offersEurocamp Holidays [topcashback.co.uk], where users of cashback sites can enjoy up to 4.2% cashback amount on their chosen holiday.
Another good example of recent cashback offers is up to 7% on fragrances at Fragrance Direct [topcashback.co.uk].
Cashback offers are available on pretty much everything [topcashback.co.uk] from fashion, takeaways, electricals, travel and utilities.
However, when using cashback sites to book holidays, some will not give the percentage back to you until you have been on the break, so you could be waiting several months for the money to reach your account.
Best cashback sitesThere are several established cashback sites and new ones spring up on a regular basis, but the best three are as follows:
Quidco – A well-established cashback website with no fees. It also gives members the opportunity to get cashback alerts once the funds have reached your account.
Top Cashback – Top Cashback offers free membership and has some really good features, including the ability to take photos of receipts for in-store purchases.
Kidstart – An innovative way to shop online and save for your children’s future. You can also invite family members to join and help build your kid’s piggy bank.
Before you choose which cashback site you want to join, take a look at the website’s terms and conditions to make sure you’re happy with everything. Only then should you sign up.
Can you use your credit card on a cashback site?Some cashback sites do allow you to use your credit card, and also a cashback credit card, but each site is different so check their terms and conditions.
Sometimes sites will only allow a debit card to be used, or if you do use a credit or cashback credit card, they will only allow you to claim the cashback in-store and not through online purchases.
Cashback sites sometimes offer other ways to claim your money, such as vouchers for high street retailers, so be sure to check all your options before making a decision.
Getting the most from cashback sitesUsing cashback sites is a great way of getting money back on products and services that you’d use anyway, but there are other ways of maximizing the amount you get back:
Earn in-store
Many cashback sites allow you to earn a percentage or small amount back when shopping in-store. Keep hold of any receipts after your shopping spree as you might be able to scan them into your online account and get even more money back.
Use cashback credit cards to boost your earnings
You can use cashback credit cards to make purchases via cashback sites, essentially boosting the percentage you’ll receive after the transaction. But be aware that if you choose to use a cashback credit card rather than a debit card, you may only be able to redeem your cashback on in-store purchases and not online ones.
Make (a little) free money
Many cashback sites give you the ability to fill in surveys, take part in competitions or trial products for free as well as giving you a percentage back on purchases.
However, these amounts are very small and you’ll be giving out a lot of personal information in return for a few pennies.
Spread the word
Referring a friend to a cashback site is a quick and easy way of topping up your balance and is easy to do. The more friends that you refer who subsequently use the site, the more you will earn. Amounts for referring friends varies and it’s always best to check if they are happy to be referred before doing so.
Be smart and avoid these pitfallsUnfortunately, there is a downside to cashback websites, so it pays to be aware of any potential pitfalls before you go ahead and complete the sign-up process.
Here are a few things you’ll need to know before using any cashback site:
Cookie trails
Cashback sites track your visit using cookies, so the site needs to be the last one you visited before clicking the link to go to the retailer to make the purchase. Fail to do this and you’ll miss out on the cashback.
Beware of paid cashback sites
Some cashback sites will charge you for being a member, so make sure you read the website’s terms and conditions before signing up or you could get hit with a nasty charge that you weren’t expecting.
Look out for the best bargains
Just because an item is featured on a top cashback site, it doesn’t necessarily mean that it’s the best deal. Before you click that ‘buy’ button, shop around to see if you can purchase the same item at a better price including the cashback percentage.
Fund limits
Many cashback sites won’t allow you to withdraw any funds until your account has reached a certain amount, so make sure that you’re willing to commit to this before making any purchases. Also, some merchants will pay you in vouchers rather than cash, so it pays to find out beforehand to avoid disappointment.
A long wait
Many people have complained about the amount of time it takes to receive cashback, with several instances of people having to wait several months to receive anything back. If you’re willing to wait that’s fine but be wary as these things seldom happen quickly.
How much can you make?How much you can make from cashback website depends on a number of factors:
What you buyWhat the deal isHow often you buyThe members that make the most money use these sites on a regular basis to make their purchases and seek out the best deals, but for those who only use cashback sites sporadically, the payout won’t be that high.
To really make the most money from cashback sites you’ll need to use them as the first port of call for anything you want and use in order to reap the rewards.
Are cashback sites free?The vast majority of cashback sites are free to use and don’t charge any fees – but there are some exceptions to this rule.
Here’s a few ways to avoid paying fees on cashback sites:
Read the terms and conditions – if any fees are mentioned, move on to the next website.Use Trustpilot to see user reviews – the best cashback sites will have good reviews from happy customers, so these are the ones you want to use rather than turning to a site no-one has ever heard of.If you’re unsure of any fees charged for using the cashback site, send them an email for clarification. 
How does cashback get redeemed?The way cashback is redeemed depends on a number of factors. Some retailers and cashback sites will allow you to withdraw the cashback by transferring the funds to your bank account which you can later withdraw. Others offer shopping vouchers and some give the option to transfer money into your PayPal account.
Some will also give you a choice of how you receive the cashback, so it’s completely up to you how you gain access to the funds. But remember, it can take a long time to receive the cashback amounts you’re entitled to and you are very likely to be charged for transferring it back to a credit card.
 
How do cashback sites make money?Cashback sites usually make their money by charging a commission to the retailer for each sale that originates from their website. Think of it as a kind of a digital finder’s fee.
There are a few sites that charge members for using their site and some even take a small percentage of the cashback that’s returned to the consumer, so do your homework before deciding which cashback site to use.
What to be aware of when you use cashback sitesMany people are happily using cashback sites to save money on purchases, but there are a number of issues that you should be aware of before you decide to try them out for yourself.
Sometimes you won’t get paid
Cashback sites use tracking to decide who is entitled to receive money back after the transaction, but occasionally things can go wrong and you won’t receive anything.
If you believe that you followed the process correctly and should receive some money back, then contact the cashback website directly.
Withdraw your cash as soon as you can
As soon as your able to get the money into your bank account then do it, the longer you leave it then the longer you are missing out on the interest it could be making for you.
Another thing to be aware of is that some cashback websites will clear your account if it’s remained inactive for a period of time, so move the money on quickly!
Don’t spend ‘cashback’ until you have it
Cashback isn’t always guaranteed, so it’s best to look on it as a bonus if you get it and not bank on the money coming back to you.
A good cashback percentage doesn’t mean a good deal
As attractive as the percentage back may seem, you could be getting a better deal without using a cashback site. Shop around on the high street or online before making a purchase.
Understanding the Cookie trailCashback websites are able to track your visits using cookies, a small text file that is stored on your computers browser, this identifies where you’ve been and where this visit originated from.
If you are going to be making a major purchase using a cashback site, it’s a good idea to clear your cookies history before doing so. This means the system can easily recognise the last place online you visited so you’re far more likely to receive your cashback.