What are Cashback Sites & How do they work?

What are cashback sites & how do they work?

Last updated: 20 August 2018

If you spend time on the web looking for ways to save money, you may have noticed the emergence of cashback sites and wondered what they were.  Cashback sites work by paying you back a percentage of what you spend with online retailers listed on their sites.


You may ask: how do they manage to do that?  It starts with the common practice of online retailers paying commissions to other websites that generate sales for them using affiliate links.  Where cashback sites differ is that instead of keeping the entire commission for themselves, they pay part of the commission to the cashback site member.


For example, if you were to click on an advertisement on a cashback site and spend $100 with Retailer X, Retailer X might pay the cashback site 10% of the sale for running the ad, so in this case $10.  The cashback site might give half of that commission to you, in this case, $5 cashback.  The amount or percentage that the cashback site passes on to you can vary from retailer to retailer and can also change depending on if you are a new customer or an existing customer.


When the cashback site can aggregate a number of these deals, that makes it attractive for people to sign up to get discounts, and in turn, makes it attractive to more and more retailers to sign on and get access to more consumers, so these businesses become more popular with consumers and retailers alike.


When using a cashback site, it pays to be aware of the conditions placed on each deal that you will need to meet.  These include things like changing orders and making cancellations and returns.  The amount of time it takes for the cash to make its way back to you can also vary, so take that into account when using cashback sites.