Oops spent a little too much? Shop smarter and earn cashback when you spend online.
Cashback websites pay you when you click through to retailers via their links and buy a product or service, used wisely you can make £100s. Here’s how.
How do cashback websites work?
Online retailers pay cashback websites for referring you to them and buying their products. What set’s cashback sites apart from affiliate sites is that they give you some or all of the money they receive. Depending on the company and product, the amount of money you receive can range from a few pence for cheaper items, to over £100 for things like insurance, mobile contracts, and telecoms.
Here’s how it works. Mr Gooddeal, wants to buy a new laptop. He has seen one he likes in Currys selling for £799. He registers with a cashback website and searches that site for Currys. There he discovers that he can earn 10.5% (£83.90) cashback if he buys online, so he clicks the link on the cashback website which in turn takes him to the PC World website.
His visit is recorded, and his purchase tracked. Once everything is confirmed Currys pays the cashback site which then emails Mr Gooddeal to let him know his money is in his account.
Why do they payout?
Cashback sites use affiliate links. These links allow the retailer to see where traffic to there website is coming from, and then pay the affiliate sites for the lead. This system is used all across the internet on sites comparison sites like Confused.com, or Moneysupermarket.
For the retailer it’s just another marketing tools, similar to display advertising, or advertising on search engines.
Things you should know
Cashback sites can earn you £100s if used correctly. Especially at times of high spending such as birthdays, Christmas, insurance renewal etc.. But to make sure that you get the most out of the sites available, be sure to follow these simple tips.
- Cashback isn’t guaranteed – Think of it as a bonus. Problems ca occur with tracking links particularly if you block cookies. Also bear in mind that the cashback does not form part of the contract between you and the seller. If you have any problems with yor cashback you need to contact the cashback website not the retailer.
- The cash isn’t yours yet. The cash isn’t yours until you withdraw it to your bank account. If the cashback site goes bust before you do this then you stand to loose the money. As a precaution, never ever store cash in your cashback account. Always withdraw it as soon as it’s available.
- Choose the best deal, not the biggest cashback – Sometimes it pays to shop around. Never opt for a deal just because there is the potential for cashback. Always look for the cheapest deal first, then see if you can get cashback on it.
The best cashback websites
As with everything else in life not all cashback sites are created equally. The best sites pay you 100% of the money they receive. Beware of any site that charges money up front to join. The best sites are completely free.
Top Cashback – Our top pick
Top Cashback is my top pick here. It may sound bizarre but this site actually pays you over 100% of the money they receive. They are funded almost entirely by the few links to retailers that don’t offer cashback, and bonuses for driving large volumes of traffic to stores.
Registering is easy, and only takes a minute. They have a wide selection of retailers onboard and due to their size, they often negotiate exclusive deals with the most popular stores.
Quidco is great site with a nice design. It’s similar in size to Top Cashback and covers all the same merchants (mostly). It also negotiates exclusive deals with retailers. I don’t find the site quite as easy to use at Top Cashback, but it’s close.
The top cashback deals
Cashback deals are changing all the time, but many top retailers work with cashback websites to attract customers to their store.
For example at the time of writing ASOS offers 6.8% cashback through Top Cashback. Booking.com 4%, Boohoo 8.5%, and M&S a whopping 12.5%
By checking cashback sites for deals before you make a purchase you can save hundreds of pounds a year. For example, fellow money blogger Emma at ‘The Money Whisperer‘ previously saved over £900 using cashback websites in 2017.
Do I have to pay tax on cashback
The tax man really misses a trick, but when it comes to cashback you can relax. HRMC has stated that it considers cashback as a discount on the goods and services purchased rather than any kind of taxable bonus.
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It’s not all about spending
It goes without saying that the more you spend, the more you can earn from cashback sites, but it’s all about spending. Both the main sites have freebies section where you’ll find retailers offering you cash to for free. These often include things like signing up for free trials, getting an insurance quotation, or ordering a free sim card.
These amounts aren’t huge, but it can be a nice little bonus for using services you might have been considering anyway.