How to cash in with shopping cashback websites
Discount vouchers and reward schemes are so yesterday. Now there are sites that can save online shoppers up to 30% on purchases.
It's no surprise that, when it comes to retail, the internet is rapidly replacing the shopping centre.
Last year the number of Aussies shopping on their phones shot up by 25%, according to the latest Deloitte Mobile Consumer Survey, taking the total of regular online shoppers to almost 80%.
And with our shopping habits evolving so rapidly, so too are the ways in which we can save.
Cashback sites such as Cashrewards and PricePal are to online retail what loyalty cards and reward schemes have long been for Australian in-store retail.
However, instead of the accumulation of points that must be redeemed for prizes or store discounts, cashback sites offer the promise of cold hard cash for purchases made.
They are worth, in some cases, up to 30% of the asking price.
"Traditional reward schemes like Flybuys and Everyday Rewards were launched decades ago and it shows," says Rob Wilson, co-founder and CEO of Incent Loyalty.
"It's such an outdated notion that you should have a different reward scheme for every store you shop at. Cashback sites are here to change that and allow everyday Aussies to earn real rewards that actually add up - no more cards or meaningless points."
How do cashback sites work?
Essentially, they operate as an upfront discount in reverse, says Bessie Hassan, money expert at Finder.com.au.
"Unlike existing loyalty systems at chemists or supermarkets, cashback sites give cash back to shoppers instead of discount vouchers or rewards. That cash is essentially a delayed form of discount on your online purchases."
Each cashback site follows the same process. Once logged into the site or app, simply click on the product you fancy and you'll be directed to the retailer to shop as you would normally.
The cashback company then tracks your purchase and pays a cash rebate (for the percentage advertised) directly into your nominated bank or PayPal account. So, for example, 10% off Australia Post travel insurance (RRP $205, comprehensive) through Cashrewards would earn you $20.50 back.
Where does the cash come from?
The concept is fairly simple, says Rebecca Maher, a financial adviser and women's money coach.
"Basically, these cashback providers have gone out to various retailers offering an incentive for purchases made through their website. The retailers pay for the privilege, allowing the cashback site to pass on a saving to their customers. Essentially, it's just putting themselves between you and the ultimate purchase, which gives you a reward."
How many cashback sites are there?
Shoppers may already be familiar with Cashrewards, Cashback Club and PricePal but in the past few months we've also seen the arrival of newcomers Incent Loyalty and ShopBack. However, comparing these platforms in terms of savings is virtually impossible.
Many cashback sites offer roughly the same cashback percentages for many of the same retailers.
For instance, almost all of the above offer cashback for fashion retailers ASOS and The Iconic, with percentages fluctuating between 3.5%-7% (ASOS) and 7%-16% (The Iconic). You'll need to do your own research for the best deals on a particular day.
What sort of retailers are involved?
You'll find big brands for everything from travel, fashion and tech to food and booze, including Expedia, Bonds, Apple, Woolworths and BWS. These tend to overlap between cashback sites.
With over 1200 stores, Cashrewards currently has the highest number of retailers but the others aren't far behind.
As a point of difference, Cashback Club also claims to collect your trailing commission payments for financial products, including super, insurance and home loans.
Are there any hidden costs to cashback programs?
No, all Australian cashback platforms are free to join and allow you to browse all available offers before signing up. Additionally, many offer a range of daily deals and coupon codes - touting money-off or perks such as free shipping - on top of the cashback.
The most generous deals are reserved for first-time customers.
For example, at the time of writing Cashrewards listed 40% off your first order with the home food delivery service HelloFresh, plus $40 cashback. These are often daily, one-off or limited offers, so it pays to check in regularly.
How much can I actually make?
As a rule of thumb, PricePalsuggest that "active members earn hundreds of dollars each per year" but obviously this will vary depending on both your shopping habits and the percentage of cashback offered.
While we spotted promo cashback percentages as high as 30%, you're generally looking at around 5%-7% for most purchases.
Who is using them?
Despite Cashrewards advertising its membership as "hundreds of thousands of Aussies", it's difficult to quantify actual user numbers.
In fact, according to Finder.com.au research, only 17% of Australians currently use cashback websites and 33% have never even heard of them.
Further, the experience of users was mixed, according to Finder. While 5% of respondents "enjoyed the savings" another 5% claimed that receiving cashback "wasn't always smooth".
When do I get paid?
Theoretically once you accumulate a certain "minimum value" (generally around $10), you should be paid at the end of the month.
However, there are no guarantees for just how long this might take: Cashrewards estimates a waiting period of up to three months or more and PricePal between four and 12 weeks.
So what's the catch?
"There are obvious perks to cashback rewards but there can also be drawbacks," says Hassan. "There can be a delay in receiving your cash, sometimes up to three months. So if you're strapped for cash, that's a long time to wait."
Always check the terms and conditions thoroughly; there may be certain exclusions or special terms that could block your eligibility for cashback.
For instance, you might not receive remuneration when a gift card is purchased (or used for payment), an unlisted coupon code is used or an order is altered later. You may also need to disable any "ad-blocking" software during your shopping sessions.
Cashback is not paid on any freight, delivery, taxes or GST. And you won't be paid should you cancel or return your purchase.
Additionally, there may be limits on the number of claims you can make.
For example, Cashrewards restricts you to making just three claims a month (maximum 10 a year), with individual rewards often capped at $30 in value.
Are there any other pitfalls to avoid?
"This sounds simple but you need to make sure you remember to log into the cashback service before you make a purchase," says Hassan.
This is especially critical with bigger items, such as a fridge, as you cannot retroactively go back and repurchase things for the cashback later if you forget.
Additionally, the old adage about shopping around still applies, adds Hassan.
"Just because there might be a decent offer on one website, it doesn't mean it's the cheapest price."
As with any online deal, shoppers must always be wary of any enterprise that encourages spending more than you've budgeted for, warns Maher. "If you're overspending for the sake of a marginal saving, then are you really saving at all?"
Can you double-dip with other reward schemes?
"Absolutely," says Maher. "There's nothing stopping you using cashback websites in conjunction with your existing loyalty programs."
For instance, members of Hotels.com could feasibly receive 10% off while booking their holiday accommodation, suggests Maher.
"Then, on top of that, Hotels.com are a partner of Cashrewards, which would [at the time of writing] get you 10% cashback. So if you were to start your journey through them, you'd then be eligible for the double-up."
Cashback sites are free and non-exclusive. "So there's no reason you couldn't register with a bunch of them and save across the board," says Maher. "It's all about finding your little winning moment, your way of making what you spend online work for you."