What is a Cashback Scheme?
Cashback schemes promise to give you some percentage of the money you paid for a product. Cashback sites, mobile apps and browser plugins working in cooperation with online stores offer the same promise.
In fact, we are all familiar with the idea of receiving some bonus points, miles or other types of earned rewards in return for our transactions. The cashback system is based on the same premise: earning money by spending. And, it’s now a scheme used by department stores, airlines, banks, fashion stores and more. You prefer shopping from a service provider that gives you bonus points or miles in return for each transaction, right? This is what cashback sites are trying to do: Promising some savings to make sure you stick to the brand or online store in the long term.
How Do Cashback Sites Work?
Now that we know cashback sites are nothing new in terms of their final premise, let’s take a closer look at how they actually work.
Cashback sites act as a bridge between online stores and customers. So, when you shop through a cashback site, you become eligible for some portion of the commission that the online store pays the cashback site. For instance, if the online store pays the cashback site $50 for a $500 product, you get some portion of the $50 commission through the cashback site and continue to save money on other purchases. What makes cashback sites a little different from the reward systems we mentioned is the fact that they allow the customer to accumulate all the rewards acquired from different brands and stores on the same cashback platform.
How Effective Are Cashback Sites for Saving Money Online?
On paper, cashback sites may seem like the best friend of customers, but it’s a good idea to remain cautious while using them. You need to keep in mind that cashback sites and online stores are partners, so their primary aim is to keep the customer come back for the same brand or store. Also, keeping your focus on shopping through cashback sites might make you miss other coupons and online shopping opportunities. So, assuming that cashback sites are the most affordable and attractive online shopping solution isn’t the way to go. Besides, withdrawing money can be an issue due to withdrawal limits since you have to accumulate a certain amount of money before you can actually withdraw it and most cashback sites set a very high withdrawal limit.
In short, you should always keep in mind that the priority of cashback sites is not to make you save money. Their primary focus is the online stores. At the end of the day, cashback sites are just a marketing tool that online stores use to boost sales. Of course, the premise of getting some money back on your purchases is very attractive and hard-to-resist. This is exactly what cashback sites want, they want to create a sense of “loyalty” to encourage them to shop from a certain brand.
Things to Look Out for When Using Cashback Sites
We talked about the fact that cashback sites don’t distribute free money, they are just a marketing tool. Although there are reliable cashback sites in the market, there are also some platforms looking to abuse costumers. So, if you decide to use a cashback site, make sure it is safe and your personal data is protected.
One you make sure the platform is safe to use, next step is to do some research on the payment duration, payment method, withdrawal limit, etc. If you really want to save some money on your purchases, always remember that cashback sites can be an effective tool, but they should never become the goal.