Cashback sites Cashback sites: How they work

Wad of cash

Some banks give you free money simply for opening an account

Cashback sites pay you a cash reward when you click through from them to buy goods or financial products. And if you use them regularly, the extra money you earn can add up to hundreds of pounds a year.

Cashback sites such as Quidco and Topcashback are growing in popularity as more and more of us who shop online look to cash in on the cashback phenomenon. 

And the most ardent cashback site users claim to be earning back as much as £500 a year.The sites offer cashback on a whole variety of goods and services from mobile phones and bank accounts to holidays and cosmetics.

Step by step guide to using cashback sites

The majority of cashback sites work in the same way although there are differences in terms of fees, joining bonuses and how the money is paid – for more on this, visit choosing the best cashback site for you. Here is a step by step guide to getting your self set up

  • First, register with one or more cashback site that suit you – most sites are free but some charge an annual fee.
  • Go to your favourite retailers or preferred financial services firms, but via your chosen cashback operator, rather than directly.
  • When you complete your purchase, the online retailer then sends commission to your cashback site. In turn, it pays a slice of this money into your bank or Paypal account when you reach a certain limit – check here for the minimum payment limit

In addition to the money you make from purchases, you may also receive bonus cash for registering and some sites have referral schemes that pay you extra to direct friends and family to using the site. Certain sites also have an in-store option where you get cash back for shopping in certain stores rather than solely online. Some sites even have an option where you can give to charity. 

What do the sites get?

At this point, it might seem like you’re getting something for nothing, yet this flow of money makes simple commercial sense. On the one hand, the retailer is happy to pay a sum to the cashback site for ‘introducing’ business it might not have otherwise received. 

On the other, the cashback site hands you a cut as a reward for using its services, and as an incentive to encourage you back.

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