The old adage ‘there’s no such thing as a free lunch’ is a fairly reliable statement. But that doesn’t mean you can’t get discounts or a least some of your money back when shopping online. Cashback sites offer this very service and usually at no cost. We explain how they work and why you should consider using one.

If you're interested in learning about cashback deals on phones and SIM-only plans, see our guide: How do mobile phone cashback deals work?

What are cashback sites?

As the name suggests, cashback sites are a way to save money on things you buy on the web. The most popular ones in the UK are Quidco and Topcashback, the latter of which is also available in the US. Users set up a free account, into which they receive partial refunds from purchases they make online with participating sites.  

How do cashback sites work?

Cashback sites have agreements with a huge variety of websites, including the likes of Amazon, most mobile operators, travel companies, consumer technology retailers and many others, where they highlight promotions and discounts to cashback customers.

It’s a form of advertising called affiliate links and allows companies to let consumers know about products they currently have on offer. By clicking through from the cashback site to the retailer, both can track the sale and then make sure that the cashback site and customer receive the agreed amount once the final purchase is made. 

The offers vary quite a bit in their worth, from a few percent up to 10- or even 15 percent on occasion (or a fixed sum), but if you do a lot of your shopping on the web then it can be an easy way to save some money here and there.

It isn't just online shopping, though. If you register a payment card with the sites, you can also benefit from cashback when you use your card in participating retailers on the High Street.

Plus, it's worth checking if your bank itself runs cashback deals. Santander has lots of cashback offers which you can activate via its mobile app so you get the cashback when you spend in those retailers using your Santander card.

How do you use a cashback site? 

You’ll need to sign up to a free account first, as this will be how the site can attribute any purchases back to you and also where your cashback money will be stored. Now, whenever you want to do some shopping, visit the cashback site and explore the various sections to find what you’re after.

How cashback sites work: Quidco

For example, at the time of writing the front page of Quidco had promotions for up to £65 cashback at Currys/PC World on a range of laptops, washing machines, and other goods, H&M was offering 10 percent cashback in its 24-hour flash sale, while Argos had a promotion where you would receive a £10 voucher when you spent £100 or more.

To take advantage of any offers, click the Shop now button or whatever equivalent is shown and you’ll be taken directly to the site in question with the cashback company registering your choice. Of course, you’re not limited to the front page offers, as you’ll find a whole catalogue of other retailers affiliated with the cashback site if you explore the menus.

Once you’ve gone to the retailer you’ll continue as normal, make your purchase and await delivery. The rest happens behind the scenes, as the retailer informs the cashback site that the transaction is complete and then, usually after a few days, you should see the cashback amount appear in your account. 

Most cashback sites require that you reach a minimum amount in your account before you can withdraw the money, so treat it as a piggy bank that’s quietly accruing money in the background.

Are cashback sites safe to use?

Well-known cashback sites, including the ones mentioned above, have been around for a number of years now and are legitimate businesses that you should be confident in using. There are a few things to be aware of though, to ensure that you make the most of your money.

It’s a good rule of thumb to expect a few bumps along the way. Tracking sales can be unreliable at times, meaning that retailers or cashback sites will miss some of the times you buy things through them. That’s why it’s a good idea to regard cashback as a little chocolate on top of your cake rather than a dependable income.

Also, while the cashback terms might seem very tempting, be sure to check if you can get a better deal by shopping around. A ten percent cashback when buying a pair of boots might seem like a great deal, but if those same boots are available for 25 percent off on a rival site then that would be a much better saving. 

For the most part though, remembering to visit a cashback site before buying an expensive product or even your weekly grocery shop, can be a great way to keep a few pennies aside for a rainy day. 

You might like to also read Can smart heating save you money? for more ways to maximise your finances.