Cashback: The Definitive Guide

How I Made $711 by Buying Things Online.

Cashback sites will revolutionise the way you shop

Photo by Brooke Lark on Unsplash

The Discovery

I first discovered a cashback site back in 2018. As a student, I was intrigued; every penny counts. I started using the site for all of my online purchases, including insurance, eBay purchases and train tickets.

2 years later, I have made £585 ($711), simply by buying things online. Here’s how you can do the same.

Credit: The author’s cashback account

What is a Cashback Site?

A cashback site, at its simplest, is a collection of web links to various online shops.

When you use these links to arrive at an online shop and make a purchase, you get cashback credited to your cashback account.

Different online shops offer different cashback rates. For example, clothing stores often pay a high percentage of your purchase as cashback (sometimes as high as 50%). Amazon and eBay pay much less (usually 1–10%). Financial products like insurance or savings accounts often pay out a large single cash sum, often over $100, rather than a percentage cut.

How do Cashback sites make money?

Cashback sites take advantage of affiliate links to make money, similar to how influencers make money from advertising.

Online shops pay the cashback site for the privilege of directing you, the customer, to their store.

The cashback site makes it worthwhile for you to click through their links (rather than use a search engine), by paying you cashback.

How do you earn Cashback?

Once you have signed up to a cashback site, its simple to earn.

For example, if you want to make get cashback from a purchase on a webstore:

  1. Visit a cashback site.
  2. Search for the webstore in the search bar.
  3. Click on the link to the webstore
  4. Buy something on the webstore, and get cashback!

How to be Cashback Savvy

Whilst many cashback sites are established businesses and are used by millions of buyers a year, there are still several rules you should follow so that you don’t lose out.

  1. Cashback sites often take a while to pay you. Don’t panic if some Cashback takes 4 weeks or more to clear. I empty my account every 6 months or so when enough cash has accumulated and use it to pay for gifts (not to pay my rent).
  2. Cashback sites may take a chunk of your cashback. For example, the cashback site I use takes a £5 fee out of my account every year. Be aware of this when you signup to a cashback site.
  3. For high earners, earning cashback might not be worth your time. Receiving 1–10% cashback on almost everything I buy is perfect, as I’m a student who is time-rich and cash-poor. But, for those with little time and plenty of money, it might not be worth the time earning 1% cashback on that $4 eBay purchase.
  4. Find cheap deals — not the biggest cashback payouts! A common mistake when earning cashback is looking for big payouts. This is the wrong way to think about cashback. Instead, research the best deal online for whatever you want to buy, then check whether or not you can get cashback on top. If so, it’s a bonus, but not a dealbreaker.
  5. Check yourself before you buy. Do you really need another piece of clothing? Your use of cashback sites should not extend to mindless consumerism. Consider if you would buy the item if you weren’t getting cashback. Again, a large cashback payout shouldn’t be the only reason.
  6. Cashback is never guaranteed! Occasionally, the web link you click through times-out, or an online store doesn’t log your cashback, and you don’t get your cashback. This happens to me for about 5% of my purchases. You should never rely on the cashback as income; it’s a bonus, not a reason to drive your purchases.

Which Cashback Site should you use?

The first step to maximising cashback is researching the different cashback websites.

Some offer the best cashback rates, whilst others provide a niche service, like KidStart. It gives you decent cashback rates, with the caveat that you have to put the earnings into a savings account for your child.

In the US, cashback sites include Topcashback, Ebates and BeFrugal. In the UK, the most popular sites include TopCashback, Quidco and KidStart.

Earn Cashback and do good

Instead of using your cashback payments to buy yourself something nice, consider using a charity cashback site, like Amazon Smile. For every purchase you make, Amazon donates 0.5% to a charity of your choice; perhaps the best kind of cashback.

How did I make $711 in 2 years from Cashback?

Most of my cashback came from 2 categories: buying physical items online, and financial products. Buying physical products often only earns me a small amount (a 1–50% cut of things I buy), but adds up over time. Financial products normally pay out a single large sum; for me, these included my mobile phone bill, broadband, house insurance and savings accounts.

After 2 years of perseverance using a cashback site, I have made a total of £585.92. Even if you rarely make purchases online, it might still be worth using a cashback site. And for those making purchases daily, cashback sites could be extremely lucrative.

Good luck cashbackers! Let me know how much you save!

Finance, Tech and Productivity. Studying Economics & Management at Oxford University.

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