Cashback is an interesting twist on an age old advertising method. Effectively the middle men are being cut out of the picture and it is the consumer that ‘gets paid’ a kind of personal online discount.
So what is cashback?
Merchants have large marketing budgets, which pay for newspaper/TV ads and all the other ads you see around. Most merchants allocate a portion of this budget to online advertising. Usually this means signing up to an affiliate network, giving the merchant has access to a third party transaction tracking system.
These affiliate networks recruit websites that publish merchant ads in return for earning a percentage of any merchant sales generated. When a consumer, clicks through an ad and completes a sale, this is tracked by the affiliate network system. The merchant pays a percentage of the transaction value to the network who then pays the website displaying the ad.
With a cashback site, the money then flows to the consumer. This may be a percentage of the sale value (minus taxes and shipping fees) or it may be a fixed dollar value.
How can cashback work for me?
The biggest value is when you can use cashback sites for everyday items. The areas where cashback is the most benefit:
- Car insurance
- General insurance
- Mobile phone contracts
- Utility contracts
- Large electronic purchases
- Cashback is also great when generally shopping online
It is surprising just how much insurers and mobile phone companies are willing to pay in cashback.
Here are a few tips:
- Always price compare before you complete your purchase to make sure you are getting the best deal
- Research the cashback sites. Compare the cashback rates on offer and ensure they have an easy to use enquiry process if something goes wrong
- what fees are charged. Some cashback sites will have charges associated with your payments, so look at the fine print.
- Combinations of cashback and coupons or discount codes can deliver some fantastic shopping deals. Be aware that the use of some discount codes will mean your cashback wont track.
- I recommend you use a separate browser for your cashback site.
- Clear your cookie cache before logging in to your cashback site
Cashback is way for consumers to be rewarded for shopping. The system also allows merchants to tap into a solid base of savvy shoppers and it really makes their advertising dollar lead to conversions. Everyone is happy.