What is Cashback?

Do you really save money?

The Definition


  • a form of incentive offered to buyers of certain products whereby they receive a cash refund after making their purchase.”

How it Works

purple cashback dice

(1) Cashback on Purchases of Goods and Services

Cashback websites arrange for you to receive a refund of a proportion of the purchase price of goods and services – provided that you complete the relevant transaction via a link on their website. You are, in effect, receiving a delayed discount on the normal purchase price. Some of these discounts can be substantial and they certainly add up over time. Obtaining these discounts is a relatively simple process . Some sites also offer an “offline” cashback service whereby you register your debit/credit card number with the website and each time you use the relevant debit/credit card at a participating retail outlet you receive cashback on the transaction.

The key idea is not to purchase items just to obtain cashback, but rather to use the websites to obtain a delayed discount on goods and services that you intend to purchase anyway. Some of the most attractive cashback opportunities are to be found when using these sites to purchase insurance policies, mobile telephones (“pay as you go” or “contract”), and a variety of other high value products.

In January 2014, my car insurance and home insurance policies were up for renewal and I used TopCashback.com to obtain a combined discount/cashback saving of approximately £350. That’s £350 for an hour’s effort!

(2) FREE Cashback

You can also earn cashback for FREE without having to make purchases. My favourite FREE cashback tasks include signing up for Free Trials of goods and services (just make sure they are with reputable companies and that you cancel before the end of the Free Trial period – iPhone alerts are are very good way to set regular reminders).

(3) Referrals

In addition to receiving cashback on transactions one can generate additional income by referring friends and relatives to the websites. Each company has slightly different referral conditions but, in general terms, you get paid a commission for each “genuine” person that you refer to the website. For example, TopCashback currently pays £15 per referral (provided that the referred person earns at least £10 cashback). The referred customer also gets a sign-up bonus (currently 500 Tesco clubcard points). Quidco currently pays £2.50 per referral (provided that the referred person earns at least £5 cashback). You can also get paid for entering competitions and signing up for free / paid trials of goods and services.

Why Does Cashback Exist?

  1. Retailers want to attract additional customers to their websites and/or into their shops.
  2. The retailers pay commission to the Cashback companies to direct customers to their websites and/or their shops.
  3. The Cashback companies then pay a proportion of that commission to you (the customer) as an inducement to go and shop with those retailers in the first place.

The Basic Process

  1. Sign up for a free account with a cashback website – using a referral code if you wish;
  2. Register your credit/debit cards with those offering offline cashback;
  3. Nominate a method of receiving your cashback funds;
  4. Buy goods and services that you would purchase anyway using the links on the website or using a registered card at participating offline retail premises;
  5. Refer friends, relatives, or indeed anyone else who is willing to use your referral code;
  6. Earn cashback;
  7. Receive cashback into your bank account;
  8. Spend or save cashback.
Cashback dos and donts

  • DO keep track of your transactions;
  • DO chase up any transactions that fail to get recorded on you “current transactions” page;
  • DO raise a polite complaint if the automatic transaction recording process fails – it does happen but these issues are usually resolved fairly quickly within minimal effort;
  • DO check that the the item is not available more cheaply elsewhere (even when the cashback is factored in);
  • DO refer as many people as you can;
  • DO use them to purchase high value items since this is the most profitable method in my opinion;
  • DO complete the entire transaction in one session. if you link to the retailer website from the cashback site, have a look, close the window and return later, you will NOT get paid. Keep the retailer window open while you carry out comparison research in another window;
  • DO NOT buy things just to get cashback.

How Much Money Can I Make Using Cashback Sites?

Obviously, it depends how much time and effort you invest and how many goods and service you purchase from the participating retailers.

Typically, you can expect to earn cashback of between 1% and 15% of the purchase price or a fixed sum for larger transactions. For example, for each of my recent insurance policy purchases, I earned £63.06 plus a £25 bonus for purchasing 2 policies from the same company. That’s a total cashback of £151.12 for less than 1 hour’s effort! The prices were also just over £100 cheaper than the renewal quotes – a total saving of more than £350!

I regularly come home from shopping trips to find that I have been awarded cashback on hight street purchases when I had no idea that those particular retailers were even paying cashback. It really is money for nothing and well worth the very limited time and effort required to set it up.

My Recommended Cashback Sites

You can read my review of TopCashback here.

You can read my review of Quidco here.

how to register with topcashback

Top Cashback

Top Cashback is a great website for finding great deals online and receiving cashback on normal everyday purchases

how to register with quidco


Quidco is a great place to earn cashback online and register your card details to earn cashback on the high street

Contact Me

I am always happy to receive feedback and suggestions with a view to improving the content of this website. Please feel free to either leave a comment in the box below or contact me by email at kristian@freeswagsites.com


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