How Cashback Works
Most of us are constantly looking for ways to shave costs off our daily purchases. Wouldn’t it be great if you could get a small sum of money back from the amount you spend every time you shop online, helping you stretch your shopping budget a little further. That is how cashback works!
Cashback is a type of incentive program that gives you back a percentage of your amount spent on making a purchase. These cashback programs work in different ways, depending on the merchant, you either receive a percentage of the total purchase price, or a fixed sum paid out for each monetary action. Similar in nature to a loyalty program, but in this case, you earn cash instead of points.
You can make use of the cashback program through cashback sites. These cashback sites are online shopping portals, that provide access to merchant’s online shopping stores, which helps you earn a monetary reward when shopping online. These sites usually have merchants for everything, from groceries, toiletries, and clothing, to insurance policies, holidays packages and mobile phone contracts. This is a great way for people who enjoy online shopping and do it on a regular basis to save up a good sum of money at the end of every year. If you are going to be shopping online, and that retailer is available through a cashback site, you may as well shop through them and save some money.
The reward is usually in the form of bank transfers, gift vouchers, PayPal, bank checks, mobile recharges or online orders placed at the request of the customer. Some cashback sites set threshold for customers to make a certain number of purchases or to spend a certain amount through them, after which they can use the cashback option.
It takes time for the cashback site to process the payment because they need to make sure they cancel out any returned, cancelled or exchanged orders. Some sites make their payments after three to six weeks while others may take two to four months.
Now you might be wondering, cash for free? What’s the catch? There’s no catch. Cashback sites receive a commission from the merchants, on every purchase made, that is also shared with the customer. They also get a certain sum of money from every merchant for advertising the brand on their behalf, spreading the word about it, and sending paying customers their way that they may have missed out on otherwise. Cashback sites also offer rewards to their users for bringing in new users to the site. Most cashback sites have discussion forums, top offers, daily deals, and other rewards to attract new customers and retain the current ones, overall increasing traffic, and building customer loyalty.