Earn cash when you shop online
With online shopping growing in popularity all the time - it's set to hit £162 billion a year by 2020, according to YouGov - it makes sense to use cashback websites that reward you for your retail exploits.
However, while most of us are happy to shop online, cashback mania hasn't quite caught on. British shoppers are missing out on an estimated £3.2 billion in cashback each year, according to price comparison website kelkoo.co.uk.
Up to 40% of shoppers say they have never used cashback sites and 25% admit they have never even heard of the term.
The online formula
The premise of cashback websites is simple: just by using a cashback site to buy things that you were going to get anyway you can earn hundreds of pounds - for example, the average member with quidco.com earns £262.36 a year.
It's little wonder that those already in the cashback camp are full of praise.
Geneticist Martina Johannesson, 35, lives in Oxford with her husband and two young children. She has been using maximiles.co.uk for the past two years.
"I use it weekly to buy all my groceries online with mysupermarket.co.uk," she says. "I also fill out surveys and if I'm making one-off purchases I will check to see if I can get cashback."
She has claimed £150 of Debenhams vouchers as well as a few smaller gadgets, including a pair of headphones, in rewards.
"I usually wait just a couple of months before claiming my rewards," Martina says. She has also received about £200 cashback from topcashback.co.uk – and she's not the only one.
Topcashback.co.uk has a whole section on its website where customers extol the virtues of cashback. One user writes: "I've been using topcashback.co.uk for about five months now, and have earned over £145 already.
I can't believe I didn't join earlier - I shop online a lot and am now making money on things I would be buying anyway, plus there's loads of ways to get cashback without having to spend any money."
So what's the catch?
They make it sound so easy. However, turning your cashback rewards into precious pounds can be a hard slog. For a start, there are many different sites around, all offering different levels of cashback.
Then you have to take into account the fact that some sites charge membership fees and have different payout requirements. Others will offer you the potential to earn more points if you sign up for premium membership.
But although the various sites work in slightly different ways, they all follow the same concept. They are essentially advertising sites that list hundreds of retailers and product providers in categories such as electricals, fashion, finance and travel.
When you click through to a retailer's website to purchase something, it pays the cashback site a lead fee for generating your business.
Fee-based sites will normally pay you 100% of this money back, whereas free sites will take a slice for themselves and give you the rest.
Quidco.com, one of the most popular cashback websites, has no joining fee but charges £5 a year towards administration costs.
However, it has over 2,000 retail members, compared with 128 on greasypalm.co.uk, which has no joining or administration fee. So the potential to get your money back - and more - is much greater with quidco.com.
Mrscashback.co.uk is free for standard members, but gold membership, which pays double points, costs £29.95 a year.
Topcashback.co.uk, however, recently dropped its annual fee; all the other main cashback sites don't charge any fees.
In order to benefit, you'll need to register with a site and log in each time you visit – this allows the site to track your movements, so that some or all of the payment they receive from retailers can be paid back to you.
The amount of money you can earn is not only dependent on the site, but also the type of product and the retailer you buy from. For example, you can get 7% cashback on H Samuel with rpoints.com, but only 1% on Virgin Atlantic flights.
Of course, the 1% cashback you get off a flight might be worth more than the 7% cashback on an item of jewellery – however, you might get a better priced flight or item of jewellery with a non-cashback-partnered retailer or service.
Just as you would check and compare prices between retailers and different websites, the same applies with cashback.
Don't assume that because you're buying through a website that rewards you with points it will also give you the cheapest price. You should still check other retailers to see if you can find a better deal.
Use price comparison sites and shopbots like kelkoo.co.uk or pricerunner.co.uk to find the cheapest deal, before factoring in the potential savings from purchasing through a cashback site.
It's also pointless to buy products simply for the sake of accruing points. While there are a lot of participating retailers that are pretty mainstream, such as the major supermarkets, you could easily get distracted and end up buying things you don't really need.
Buying products you would not otherwise buy just to get cashback, is a quick way to lose money, not make it. It's also a bad idea, given that sometimes the retailers fail to reward customers.
The way a site will pay you is also worth considering – some sites will pay out once a month or when you reach a certain limit.
You have to accrue at least £25 with freefivers.co.uk before you can claim any money; the same figure applies with rpoints.com and greasypalm.co.uk.
You have to get up to £30 with mrscashback.com and £50 with topcashback.co.uk, but you can access your cash as soon as you've earned it via BACS or PayPal.
Think about how you want to receive your cashback too. Some websites like mrscashback.com will send you a cheque, while others like freefivers.co.uk will only send your rewards electronically by BACS or PayPal.
Maximiles.co.uk doesn't pay its customers money directly; instead it converts points into goods and services offered by its partners.
The idea behind this is that members get more for their points than a few quid back, but check the rewards are things you're likely to want or need.
You can also earn extra points by taking part in surveys and even by donating to your favourite charity through maximiles.co.uk. Also look out for extra awards like double cashback at certain times or extra money if you recommend a friend.
Provided you do your research to find the best deal, cashback sites do pay you for buying online.
The earning potential depends on how much you spend and how often you shop online, but as more of us shun the high street for the comfort of shopping from home, cashback sites could be something to consider to make an easy buck.
Quidco: Charges a £5 admin fee. It has the most retail partners of all cashback sites (2,156). You can receive cashback by BACS or PayPal, and can donate cashback to charities. There is no commission or set-up fees for charity.
Topcashback: Free to join and no admin fee. Over 2,000 retail partners. You can receive cashback via cheque, BACS or PayPal, but you have to accrue at least £50 before getting a cheque. £1 cashback for each friend recommendation.
Rpoints: Free to join and no admin fee. 2,000 retail partners. You can receive cashback via BACS, PayPal or Amazon vouchers. £5 welcome bonus.
Mrscashback: Free to join with no admin fee but £29.95 gold membership to get extra rewards and points. You can only receive payment by cheque; £3 admin fee is deducted for this.
Rather than shopping online directly with a retailer, if you go to the retailer via a cashback website (you have to register as a member), when you make a purchase the cashback site gets a commission and rebates some – or all – of this back to you. The cash being paid back to you will vary wildly from site to site and even from product to product, so check you’re getting the best deal before you buy.
Created in 1968, BACS is a not-for-profit industry body, owned by 16 of the leading banks and building societies in the UK and Europe. All direct debits, standing orders, credit card payments, personal loans and the vast majority of salary cheques are processed through BACS. In 2010, 5.7 billion UK payments with a total value of £4.06 trillion were processed through the system.