How it works: cashback sites

How it works: cashback sites

author: Bryony Pearce

By Bryony Pearce

Discover the ins and outs of all things cashback with this A to Z guide on everything you need to know to get earning.


If you were planning on buying a new hoover, TV, rug, phone, dining set, sofa, cushion, pram, dress…you get the gist, and someone offered you cash for doing something you were already going to do, you’d take it, right? It’s a no brainer.

Well, with cashback sites, that’s pretty much the case. From how they work and how much you could make to what to look out for, we’ve explained everything you need to know about cashback.

How does cashback work?

The concept behind cashback sites is pretty simple. Let’s say you were planning on buying a new smartphone from the Apple store. Instead of heading straight to Apple’s online store, you’d go to a cashback site (like Quidco, Boom25 or TopCashback), and click through to Apple’s site from there.

You’d still be purchasing your phone directly from the retailer, but the detour of going through a cashback site first could earn you a few quid.

How much money can you make?

Each cashback site will have its own set-up, but, more often than not, you’re rewarded with a percentage of the total amount you spend.

How do cashback sites make money?

The purpose of cashback sites is to drive traffic to online retailers’ websites, and they receive a commission for each visitor they send to X, Y or Z merchant. Then, they’ll give a percentage of that commission to you, the buyer, as cashback.

Another way they can sometimes make money is via bonuses. If a cashback site drives a particularly high volume of traffic to a certain retailer, some will reward them in the form of an ad-hoc bonus.

How to use a cashback site

Although there’ll be slight variances from site-to-site, most cashback companies work the same way. Here’s a step-by-step starter-pack to getting the most out of them:

1. Choose your site. There are a handful of cashback sites out there – some are free, some charge an annual fee. Once you’ve found one or more you like the look of, register yourself for an account.

2. Start searching. If you know already what product or service(s) you want to buy, search the site to see if the retailer you’re after is on there.

3. Click the link. Once you’ve found a deal you fancy, click on the link provided on the cashback site - don’t go to the retailer directly. And if you’ve already been on their site previously, remember to clear your cookies first. If you don’t, the link you click on might not be recognised as the referral source and you could miss out on your cashback.

If you’re not sure how to clear your cookies, here’s an easy-to-follow guide.

4. Complete your purchase. Then, all that’s left to do is wait for the retailer to send its commission back to the cashback site, and then for the cashback company to transfer your cut on to you.

It’s worth remembering, some cashback sites have certain limits you have to meet before you can withdraw your money i.e. you might have to rack up £20’s worth of cashback before you can transfer it to your bank account.

What does cashback by redemption mean?

Cashback by redemption applies to line rental (i.e. phone or broadband) discounts, and, instead of giving you all your discount in one go, the provider pays you back in equal instalments throughout your contract.

To claim your cashback by redemption, firstly, you need to know which months’ bill you need to send in. Once you know this it’s simply a case of submitting your bills, along with your voucher, to your provider and waiting for your cashback to land back in your account.

What is a cashback mortgage?

Cashback mortgages are a tactic used by lenders to tempt customers to choose them, and the way they work is pretty simple. If you're successful for a cashback mortgage with lender X, they’ll give you a lump sum in return - typically, this is anything between £200 and £1,000.

Although the thought of getting free money along with your mortgage might sound tempting, there are some important drawbacks to be aware of.

For starters, cashback mortgages usually come with higher interest rates than regular mortgages, making them more expensive in the long run and likely offsetting the initial cash you’d receive. A lot of cashback mortgages also come with extra restrictions attached to them too, around things early repayments.

If you’re considering a cashback mortgage just make sure you do your research first, crunch some numbers, and compare the deal to other mortgage alternatives.

And remember, don’t let the cashback reward sway your decision-making process. Although it would certainly be a nice added bonus, it should be treated as a secondary perk behind things like interest rates and other important terms and conditions.

Disclaimer: All information and links are correct at the time of publishing.

author: Bryony Pearce

By Bryony Pearce

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How it works: cashback sites How it works: cashback sites