Online cash­back sites

Dis­count vouch­ers and re­ward schemes are so yes­ter­day. Now there are sites that can save online shop­pers up to 30% on pur­chases.

Money Magazine Australia - - CONTENTS - STORY RICHARD SCOTT

It’s no sur­prise that, when it comes to re­tail, the in­ter­net is rapidly re­plac­ing the shop­ping cen­tre. Last year the num­ber of Aussies shop­ping on their phones shot up by 25%, ac­cord­ing to the lat­est Deloitte Mo­bile Con­sumer Sur­vey, tak­ing the to­tal of reg­u­lar online shop­pers to al­most 80%. And with our shop­ping habits evolv­ing so rapidly, so too are the ways in which we can save.

Cash­back sites such as Cashre­wards and PricePal are to online re­tail what loy­alty cards and re­ward schemes have long been for Aus­tralian in-store re­tail.

How­ever, in­stead of the ac­cu­mu­la­tion of points that must be re­deemed for prizes or store dis­counts, cash­back sites of­fer the prom­ise of cold hard cash for pur­chases made. They are worth, in some cases, up to 30% of the ask­ing price.

“Tra­di­tional re­ward schemes like Fly­buys and Ev­ery­day Re­wards were launched decades ago and it shows,” says Rob Wil­son, co-founder and CEO of In­cent Loy­alty.

“It’s such an out­dated no­tion that you should have a dif­fer­ent re­ward scheme for ev­ery store you shop at. Cash­back sites are here to change that and al­low ev­ery­day Aussies to earn real re­wards that ac­tu­ally add up – no more cards or mean­ing­less points.”

How do they work?

Es­sen­tially, they op­er­ate as an up­front dis­count in re­verse, says Bessie Has­san, money ex­pert at Fin­ “Un­like ex­ist­ing loy­alty sys­tems at chemists or su­per­mar­kets, cash­back sites give cash back to shop­pers in­stead of dis­count vouch­ers or re­wards. That cash is es­sen­tially a de­layed form of dis­count on your online pur­chases.”

Each cash­back site fol­lows the same process. Once logged into the site or app, sim­ply click on the prod­uct you fancy and you’ll be di­rected to the re­tailer to shop as you would nor­mally. The cash­back com­pany then tracks your pur­chase and pays a cash re­bate (for the per­cent­age ad­ver­tised) di­rectly into your nom­i­nated bank or PayPal ac­count. So, for ex­am­ple, 10% off Aus­tralian Post travel insurance (RRP $205, com­pre­hen­sive) through Cashre­wards would earn you $20.50 back.

Where does the cash come from?

The con­cept is fairly sim­ple, says Re­becca Ma­her, a fi­nan­cial ad­viser and women’s money coach. “Ba­si­cally, th­ese cash­back providers have gone out to var­i­ous re­tail­ers of­fer­ing an in­cen­tive for pur­chases made through their web­site. The re­tail­ers pay for the priv­i­lege, al­low­ing the cash­back site to pass on a sav­ing to their cus­tomers. Es­sen­tially, it’s just putting them­selves be­tween you and the ul­ti­mate pur­chase, which gives you a re­ward.”

How many sites are there?

Shop­pers may al­ready be fa­mil­iar with Cashre­wards, Cash­back Club and PricePal but in the past few months we’ve also seen the ar­rival of new­com­ers In­cent Loy­alty and ShopBack. How­ever, com­par­ing th­ese plat­forms in terms of sav­ings is vir­tu­ally im­pos­si­ble. Many cash­back sites of­fer roughly the same cash­back per­cent­ages for many of the same re­tail­ers. For in­stance, al­most all of the above of­fer cash­back for fash­ion re­tail­ers ASOS and The Iconic, with per­cent­ages fluc­tu­at­ing be­tween 3.5%-7% (ASOS) and 7%-16% (The Iconic). You’ll need to do your own re­search for the best deals on a par­tic­u­lar day.

What sort of re­tail­ers are in­volved?

You’ll find big brands for ev­ery­thing from travel, fash­ion and tech to food and booze, in­clud­ing Ex­pe­dia, Bonds, Ap­ple, Wool­worths and BWS. Th­ese tend to over­lap be­tween cash­back sites. With over 1200 stores, Cashre­wards cur­rently has the high­est num­ber of re­tail­ers but the oth­ers aren’t far be­hind. As a point of dif­fer­ence, Cash­back Club also claims to col­lect your trail­ing commission pay­ments for fi­nan­cial prod­ucts, in­clud­ing su­per, insurance and home loans.

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