Online buyers spoilt for choice on loyalty sites
TIM MCINTYRE
AUSTRALIAN online shoppers have more opportunities than ever before to make money as they spend, thanks to increased competition between loyalty, or “cashback” sites, which are lining up to get a piece of the burgeoning web retail industry.
Australia’s retail shopping industry grew by 20 per cent over the last year according to a study by the National Online Retailers Association (NORA). While in-store growth has been minor, the National Australia Bank (NAB) online retail sales index found that online shopping has seen 116.5 per cent growth since 2012.
Meanwhile, a 2015 report by Roy Morgan found that 90 per cent of Aussies aged 14 or over shop online and 40 per cent do so at least once per month.
In recent years, cashback websites have emerged to fill a gap between retailers and consumers. They operate by providing hubs where retailers can gather to get access to greater numbers of shoppers, who are enticed to buy by offers of getting money back on purchases they make. The retailers usually pay commission to the cashback sites, who allocate a portion of the commission back into offers of more money back for consumers.
Prominent cashback sites in Australia include Cashrewards, Cashback Club, Qwibble and PricePal, as well as a number of smaller options.
Cashrewards CEO and founder Andrew Clarke said the rise of loyalty program providers independent of retail brands themselves has been prominent in recent years.
“The majority of major retailers have some form of rewards program but … when you work out the numbers they are not really value for money,” Mr Clarke said.
One challenge faced by the online rewards industry is the scepticism many Australians feel towards online shopping, due to the high volume of scam deal sites and fake retailers.
In fact, the ACCC’s Scamwatch service recently issued a warning to consumers after receiving more than 1000 complaints already in 2017 about fake online shops.
“This has been a challenge with Cashrewards, trying to demonstrate to consumers that there is no scam,” Mr Clarke said. “The reason this occurs is that there are so many gimmicks online simply trying to trick the consumer.
“People feel the same way about rewards programs.
“Most loyalty programs offer consumers points through purchasing products or services. These points accumulate and result in a ‘reward’ of some sort.
“Cashrewards, however, works by diverting stores’ advertising dollars in exchange for sales within the community. Effectively, we share the money we earn from retailers with consumers and give them cashback on their purchases.”