Here comes your money back
Cashback sites, seen as the ‘next wave’ of online shopping, are starting to arrive in New Zealand. Susan Edmunds reports.
Gavin Male estimates he used to get $1500 a year extra in his bank account, just from shopping using British online cashback sites. Now New Zealand providers are hoping to offer Kiwi shoppers the same opportunity, tapping into the growing international trend for cashback sites – websites that offer shoppers refunds on their spending.
Customers sign up for an account with a cashback site. They then click through to a retailer from that site, and complete their purchase.
In return for referring the customer, the retailer gives the site a commission. The cashback site then passes on some or all of that money to the customer.
The system is an alternative to traditional advertising for retailers and is used internationally as a way to attract new customers and retain existing ones.
Male, who operates S.L.I.C.E Digital, technology that powers affiliate marketing platforms, said cashback sites were likely to soon be a much bigger part of the ‘‘online consumer shopping funnel’’.
‘‘They are very big in the UK and US. There is a fledgling market here and in Australia. But it’s a massive way of getting a bit more for your shopping.’’
He said the delay in take-up in New Zealand was primarily due to a lack of local providers.
‘‘It’s a good way for advertisers to acquire new products, and a good incentive to encourage switching and competition, particularly for commodity products. If you’re buying a bunch of flowers and you always shop with Interflora but find through a cashback site you can get 10 per cent back if you switch to Auckland Flowers and Baskets, it could be the thing that pushes you over to try something new.’’
He used cashback sites regularly while living in Britain and had saved a lot of money.
‘‘If you change your habits to go there first and then do your shopping, it’s a good way of getting excellent kickbacks,’’ Male said.
‘‘For bigger-ticket items, or household expenses, there are generally some quite high incentives.’’
He said some advertisers argued that they were paying to get customers they would already have had. But Male said cashback sites could target their offers, so that people who had not shopped with a retailer before received better deals.
There are a number of big international sites with millions of shopper members, including Quidco and Topcashback. But they can be tricky to use from New Zealand because rewards have to be paid out via Paypal.
Others, such as Saivian, charge a membership fee.
Now, local site Cashco.co.nz is launching, aimed at Kiwi shoppers. Freecashback.co.nz is also earmarked for development.
Cashco founder Aaron Senden said he had signed up about 75 retailers, including Strawberrynet, Boohoo, Max and Asos, and more were coming.
Shoppers could then shop in the way they normally would, and as long as they were signed in to Cashco site, the site would track any transactions they made and give them rewards.
Typical cashback offers range from 3 per cent to 8 per cent but some retailers have offered up to 20 per cent in special offers.
‘‘I had someone this morning who spent $670 at hotels.com and they are going to get 3 per cent in their Cashco account,’’ Senden said. ‘‘We’re trying to make it as easy as possible.
‘‘It’s comparable to other loyalty programmes but there are far greater returns.’’
He said retailers liked the idea of paying only when there was a transaction, in contrast to traditional advertising models where they would pay for space regardless. Senden said cashback sites were the ‘‘next wave’’ of shopping sites, after Trade Me – based on the ebay model – and Grab One, which emulated sites such as Groupon.
University of Auckland senior lecturer in marketing Mike Lee