If you’re looking to cut the cost of your spending in the months ahead, then cashback sites can be a powerful tool.
With household finances already stretched to breaking point, it makes sense to use the best sales tips available. And cashback websites are an easy way to make money back when you shop.
Here we explain how cashback sites work and how you can use the top cashback site to get the maximum cashback for your purchases.
What is a cashback site or app?
Cashback websites have been around for some time and allow you to get money back when you shop online.
If you shop with a retailer via the cashback website, rather than going directly to the retailer’s website, then you can get some money back. It essentially allows you to cut the cost of that online shop.
Top paying cashback sites
Here’s a run through the big cashback websites to compare what you can get from them.
TopCashback is one of the biggest cashback sites around, working with thousands of different retailers. It reckons that it pays on the entirety of the referral fees it receives from retailers to its members ‒ instead it makes its money through advertising and promotions on the site.
There are two tiers of membership ‒ Classic and Plus.
The Classic membership is free, and includes a range of benefits like the option to get payouts direct to your bank account or PayPal, the ability to earn cashback through the mobile app, and the chance to boost your cashback by 10% when converting it into a gift voucher.
The Plus membership costs £5 a year, and is taken out of your first cashback payment of the year. It increases that cashback boost to 20% when converting cashback into gift vouchers, while there are added features like a top-up to the cashback earned, no adverts on the site and exclusive promotions and competitions.
One smart way to improve your returns from TopCashback is to install the TopCashback browser plugin. It notifies you every time you go onto a retailer’s website of the cashback on offer should you spend with them ‒ just click on the dropdown from the plugin and it will take you back to the retailer via TopCashback, ensuring you don’t miss out on the available cashback.
You can also earn cashback in store with certain retailers, which currently includes the likes of SCS and YoSushi. You simply have to register your debit or credit card with TopCashback first, and then the money spent with these retailers is tracked, allowing you to earn cashback as usual.
Along with TopCashback, Quidco is part of the ‘big two’ when it comes to cashback websites in the UK.
It says it has more than 10 million members, and has paid out more than £500 million in cashback to those users over the years.
Quidco also has a ‘highest cashback guarantee’ in place. It means that if you buy something online through Quidco, and then find that you could have got more cashback elsewhere, then it will not only make up the difference but stick a little extra on top to boot.
Quidco has two levels of membership: Basic and Premium. The Basic membership is exactly as it sounds ‒ you have the ability to earn cashback when shopping with the 4,500+ retailers on the Quidco website, and it’s free, but that’s about it.
The Premium membership includes a top up on cashback deals of as much as 10%, bonuses of up to 20% when you get your cashback paid out, and no ads across the site.
There isn’t exactly a fee ‒ instead £1 is taken from the cashback earned each month.
You can have the cashback paid into your bank account, a PayPal account, or converted into gift vouchers with particular retailers.
A nifty extra feature with Quidco is ClickSnap, which allows you to earn some cashback when shopping in person, rather than online. There are a host of highlighted deals on the website which you can get from big supermarkets like Tesco, Asda and Waitrose ‒ the idea is that you purchase the item in person, upload a photo of your receipt, and the cashback is then added to your account.
In addition, there’s a Quidco browser extension which you can add to your device’s browser, which will remind you of the potential cashback on offer any time you visit a retailer’s website, ensuring you never miss out.
Finally, you can earn cashback by referring a friend. Quidco. Once they have earned £5 in cashback, you’ll get £10.
Cheddar is a popular cashback app that offers up to 20% cashback on hundreds of UK leading brands.
It claims to be less hassle than the other cashback apps on the market, automatically adding cashback when you shop instead of having to shop via the app.
All you have to do initially is download the app (available on Apple and Android), and link your debit/ credit card to it. Then, whenever you’re spending and tapping your bank card, if Cheddar offers cashback you will automatically get that money back into your account.
Accelerate My Mortgage
Accelerate My Mortgage is a little different, in that the cashback you build up when shopping online is then devoted towards your mortgage.
The idea is that the money is paid to your mortgage lender on top of your regular mortgage repayments. Overpayments are an excellent way to save money on your mortgage overall, if you can afford it, as it means that you pay your mortgage off early.
Not only does this mean you’re mortgage free ahead of schedule, but it also saves you money as you’ll be paying less interest on your debt.
You are contacted by Accelerate My Mortgage once you’ve reached £50 in cashback, so that you can then approve the overpayment to your mortgage lender.
The site is run by a team of mortgage brokers, offering free mortgage advice when the time comes to switch your deal. You can also earn up to £100 every time you switch your mortgage via the firm.
Accelerate My Mortgage has partnered with dozens of retailers including the likes of B&Q (2% on all purchases), BT (up to £45), Ocado (up to 3%) and Waterstones (up to 4%).
How do cashback websites work?
Cashback websites are paid a referral fee if you shop with a retailer via a tracked link. The retailer can see where the shopper has come from, and can then hand that fee to the cashback website.
The cashback website then passes on some, or even all, of that referral fee to you. That’s where the cashback comes from.
Let’s say that you have decided to buy some shoes online from Schuh. Rather than heading straight to that retailer’s, you instead go to your cashback website of choice and search for Schuh, to see if they have partnered with the cashback site.
If they have, then you will be presented with a link to follow to the Schuh website. You can then shop as normal, with the money you spend tracked. You will then be paid a portion of the money in the form of cashback ‒ right now users of TopCashback can get 8% with Schuh, for example.
The cashback isn’t immediate ‒ you may have to wait a little while for it to be added to your account, though that will all come down to how quickly the individual retailer pays the fee to the cashback website.
Once the cashback has been paid, you can transfer it into your bank account, though some will allow you to convert it into vouchers for certain retailers with a bonus rate added on top.
Are cashback websites free?
Most cashback websites will be free, at least at the most basic membership level.
However, they will often have some form of premium membership which offers additional benefits like increased cashback rates, faster payments or additional levels of customer service.
Of course, these memberships will include a fee of some kind, so you’ll have to work out whether the added benefits are worth the fee involved.
How much can you earn from cashback websites?
Ultimately if you want to maximise your returns from cashback websites, it means doing as much of your spending as possible through them.
That isn’t the cue to overspend and get yourself into debt trouble, of course. There’s no point dropping into the red in order to increase your cashback by a few pennies. However, getting into the habit of using cashback websites whenever you spend online can deliver significant dividends.
For example, if you do all of your Christmas shopping through cashback websites then you can take the edge off of what is always an expensive time of year.
According to Quidco, the average member of its site made £280 in cashback last year, while rival TopCashback reckons that its members earn £345 a year on average.
Other ways to earn cashback
While cashback websites are an excellent way to get a little back when shopping online, they certainly aren’t the only option if you want to get a return on the money you’re planning to spend anyway.
For example, you could make use of a cashback credit card. Cashback credit cards allow you to earn a percentage of the money you spend in cashback. The big selling point here is that unlike a cashback website, you aren’t restricted to only shopping with partner retailers ‒ instead, every time you use your card, you add to your cashback balance.
Take the American Express Platinum Cashback Everyday card. You get 5% cashback on the money spent in the first three months (with that cashback capped at £100), followed by up to 1% thereafter, depending on your annual spend.
There are some important downsides to bear in mind with these cards however. It’s common for them to come with an annual fee, while it’s also vital that you pay off the balance in full each month. Otherwise the interest charged on your balance will wipe out any cashback you earn.
Another cashback option is your current account. Some bank accounts allow you to earn cashback when you pay certain direct debits.
For example, the Santander 123 current account pays 3% cashback on water bills, 2% on energy bills, Santander home and life insurance policies, and 1% on Council Tax bills, mobile, broadband and phone bills, as well as Santander mortgage repayments.
An important consideration with these accounts is the fact that you will have to pay a fee, so you’ll need to calculate yourself whether the cashback you earn will cover that fee and leave you with cash leftover.
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John Fitzsimons has been writing about finance since 2007, and is a former editor of Mortgage Solutions and loveMONEY. Since going freelance in 2016 he has written for publications including The Sunday Times, The Mirror, The Sun, The Daily Mail and Forbes, and is committed to helping readers make more informed decisions about their money.
- Vaishali VaruStaff Writer
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