How Do Cash Back Apps and Websites Work?

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Let’s face it, money’s in short supply for many of us.

That much is clear from the magnitude of debt that’s owed these days. Indeed, the total level of consumer debt reached almost $4 trillion at the end of last year.

Clearly, there’s not a lot of extra cash lying around.

As a result, it would make sense to do everything possible to accept free cash when it’s offered, right? Of course, you’re thinking- everyone wants free money. But that’s not actually a thing, is it?

Wrong! That’s exactly what’s on offer from the many cash back services now in operation. They literally give you money back on particular purchases.

Intrigued? Want to learn more?

Keep reading to discover everything you need to know about cash back apps and websites.


What are Cash Back Apps and Sites?

Let’s begin with a definition.

Cashback services offer financial incentives to purchase particular products through them. Rather than going direct to the retailer, you buy through them. In return for using their service, they give you a certain amount of money back.

It’s the epitome of having to spend money to make money!

Sure, it’s not free money the way you might hope for it. But they’re a great way to save on purchases you’d have made anyway.


How Do They Work?

Now let’s turn to how these services actually work and what’s involved to get the money.

The General Process

Here’s the overall process of securing money back from your shopping:


1. Find a product you want to purchase.
2. Find a cashback service with that item available.
3. Subscribe to their service and use their link to continue to the actual retailer’s website.
4. Buy the item.
5. Your purchase is verified by the cashback service.
6. You earn money back in due course.

It’s as easy as that. Think about it like buying through a middleman, or broker. Except, rather than paying the broker, they pay you. You’re shopping as normal online, just with an extra step along the way to the merchant’s site.

The amount you get paid is dependent on a couple of things.

Firstly, the price of the item itself. More expensive items will give you a bigger return. That makes sense. After all, it’s more money in everyone’s pocket and effectively incentives pricier purchases.

The second factor is the actual cashback offer that’s in place. There’s no standard percentage to expect off your purchase. It varies by the retailer; some sites offer higher returns than others.

Nicely, some of these services offer coupons as well as cash returns. It’s a double-whammy: you save upfront and get cash back too. That’s good news whenever you have a lot of shopping to do!

The Source of the Money

You might be wondering something along the lines of ‘what’s in it for them?’

It’s a fair question. After all, good things in life are rarely free! And these cash back services definitely aren’t running a charitable foundation. There are clear incentives for them to be in operation. In essence, everyone’s trying to get the same thing: money.

You get yours from shopping through their service. But where do they get theirs?

It’s quite straight forward, really…

Essentially, they’re in cahoots with the merchant. These sites (you can learn more about one of them by following this link) are paid a fee by the retailer for referring customers to them. It’s a commission arrangement they have in place.

The more customers they refer, and the more purchases they make, the more money they (and the retailer) earn.

In essence, everyone’s a winner. The money you get back is a proportion of their commission.


Things to Think About First

It isn’t all smooth sailing though.

There are definite things to consider before using these sites and apps.


1. The Reputation of the Service

In any field, there are good and bad companies.

The good services are reliable, trustworthy, and have your genuine interests at heart (as well as their own). The bad ones are the opposite. They’re in it for themselves. They exist to maximize their personal gain and don’t care who has to suffer for that to happen.

As a result, it’s always essential to research the cashback service you plan to use. Read up on their reviews and industry standing. You can guarantee anyone who had a bad experience will let it be known!


2. The Time before Payment

You can’t guarantee a regular and speedy cash return on your purchase.

Payment from these services can sometimes be slower than you’d like. That can be frustrating when the money you’re expecting would come in handy immediately!

Look into the terms and conditions to see when the money should arrive.


3. Varying Payout Rates

We’ve already alluded to the different percentages in operation.

Essentially, not all cash back services offer the same returns on a purchase. It might be the same retailer, but particular products will glean varying rewards. Likewise, not all products may be open to cash back.

Oh, and sometimes it’s necessary to reach a certain threshold of expenditure. You have to spend a certain amount to get paid, or wait for a particular time-related milestone (eg quarterly or monthly).


4. It Might Not be Cash

It’s also worth knowing that some services don’t pay with actual cash.

Instead, you’ll receive vouchers, gift cards, or PayPal credit. That can be disappointing if you’re desperate for literal money in the bank.


5. It’s Easy to Overspend

Remember, it’s in the interest of these services for you to spend your money!

The more you spend, the more they earn! Sure, you get more cash back too. But you’re also the one forking out the expense. With a mass of products at your fingertips and cash back offers in place, it can be tempting to make unnecessary purchases.


Time to Wrap Up

There you have it: everything you need to know about using cash back apps and websites.

Who says there’s no such thing as free money?! As we’ve seen, this is literally what’s on offer from cashback services. Choosing not to use them is like leaving money on the table.

Hopefully, this article has educated you to exactly how they work!

Want more money-related advice? Read more on the blog. Head to the finance-section now.

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