Skip to main content

Now you never have to pay the advertised price: Proof that shoppers CAN get something for nothing by using cashback websites

A shopping revolution is sweeping Britain. It started online but is moving rapidly to the high street and it is putting thousands of pounds into consumers’ pockets for free: cashback has entered the mainstream.

It means that you never pay the advertised price for, say, a holiday or a new computer, but you still buy from reputable retailers.

Part-time accounts manager Nicola Arch is one of five million shoppers already signed up to a cashback scheme. ‘The way I shop has been fundamentally changed by cashback,’ she says.

Disney treat: Cashback fan Nicola Arch with Joshua, Erin and Holly, holding Jake the puppy

‘I’ll see something I want to buy – for instance, recently, a Nintendo 3DS from Tesco online at £159.99 – and I say to myself, ‘‘I’m not going to pay that price.’’ And in that case I was right. I went on to buy the same Nintendo from the same retailer but through a cashback website, and got £20 back.’

  More... Paralysed by choice! Shoppers spend a whole DAY looking online and scouring the High St for fear of missing out on deals Play your cards right: The best credit cards for spending, holidays, rewards or clearing your debts Supermarket and store cards can work for savvy shoppers... but don't be blinded by enticing discounts when you reach the till Start earning cashback today with Quidco

Nicola uses Quidco, the biggest of the new breed of cashback operators. She was an early user, signing up in June 2007. Since then she has used Quidco to buy a family holiday in Florida from Virgin, insurance from numerous providers, and other goods and services from Halfords, Debenhams, Cineworld and elsewhere.

She has earned a total of £2,430 in cashback since 2007 by ‘doing nothing other than buying the things I would have bought anyway’, she says.

Nicola, who lives in St Asaph, Clwyd, with children Joshua, 14, Holly, 10, and Erin, 5, encourages friends and family to do the same – but often finds they are sceptical. ‘People wonder how they can get what they perceive as money for nothing,’ she says. ‘They think there’s a catch. But there isn’t. It’s pretty simple, really.’

...and you can also get money back from banks

Although cashback is increasingly a feature offered by non-bank providers such as Topcashback or Quidco, the traditional cashback credit cards are still popular – and potentially valuable.

Santander’s 123 credit card, which pays one per cent cashback on supermarket spends and three per cent on petrol spending, has 900,000 cardholders.

The bank says spending patterns have shifted considerably since the cashback rewards were introduced in September 2011, with customers  using their cards more for better-rewarded transactions such as fuel purchase.

Both the number and size of the average card transaction leapt by more than 60 per cent between the first quarter of 2012, when the perk was relatively new, and the first three months of this year. The  123 Current Account also pays cashback on direct debits, including up to three per cent on payments  to broadband or TV service suppliers. In general, however, the value of cashback attaching to  credit cards has dwindled over the years.

According to analyst Moneyfacts, 12 banks offer cashback credit cards but many deals, such as  those from Barclaycard or Sainsbury’s Bank, cap  the monthly payout and apply other restrictions.

Smart shoppers could always benefit from ‘compounding’ their cashback. By using a cashback card to pay for an item via a cashback website such as Quidco, for instance, consumers can effectively benefit twice.

- What is cashback?

Reward schemes and loyalty points have existed for decades, but until recently they tied shoppers to one brand (such as the Boots Advantage card scheme) or a limited group of participating brands (such as Nectar).

By contrast, the new generation of cashback services work with thousands of shops – almost every retailer you can think of.

Shoppers first set up an online account with one of the cashback firms, such as Quidco. Then, when they want to shop, they go to the Quidco website and from there to the website of their chosen retailer – such as Debenhams, Tesco, Amazon or Argos. Shoppers are quoted a cashback offer, which could be anything up to 40 per cent of the purchase price.

They pay in the usual way direct to the retailer and the goods are sent as normal.

Then, in a period that could be as short as a few days or as long as several weeks, the cashback payment is made to their Quidco account.

From there the money can be transferred to a bank account or left to build up.

Based on its three million customers, Quidco reckons the average household can save £780 a year.

- Where does the cashback money come from?

The short answer is the shop. Retailers pay commission to the cashback website for introducing your business. The website then passes some or all of that back to you and, hey presto, that’s your cashback.

If you want to buy a man’s suit, you go first to your cashback provider’s website, say topcashback.co.uk. A browse will show you can earn ten per cent cashback from Austin Reed or Topman if you buy on their sites. Clicking through and shopping at Matalan would result in an 8.08 per cent cashback, seven per cent at Gap and three per cent at Marks & Spencer or Asos.

Rates change, depending on how much the retailer is prepared to pay for business directed to it by the cashback operator. You will be notified of special or limited offers and it should always be clear what cashback applies before you click through to the shop.

- Is it safe?

The transaction is between you and the retailer, so it is just like shopping online at Tesco, Amazon or elsewhere.  Your consumer rights – in terms of the goods’ quality and safe arrival – remain unchanged. You will also be paying by your usual chosen means, so if you use a credit card you will receive the same protection as with any other transaction. But there is less certainty about the safety of the money in your cashback account. Quidco, for instance, pays out £50 million in cashback a year.

No one quite knows what would happen if a big provider failed without the ready funds to pay the money owed, so it is safer to move your cashback out of your account to your bank regularly.

Cleaning up: Jane Padginton got 40 per cent off items at the Body Shop

- Does this cashback apply only to online shopping?

No. It started as an online-only phenomenon, but is now moving to the high street. By a stroke of technological genius, cashback services such as Quidco allow users to register their bank cards – whether debit or credit cards – to the service. If you use that card in a shop paying cashback, your account will automatically be credited.

Jane Padginton, 38, who runs her own design consultancy, has used Quidco for three years. Jane, from Leek Wootton, Warwickshire, has earned almost £4,000 cashback in that time, in part because she insures two cars via Quidco. Jane also uses it to buy mobile phone contracts from Vodafone, plus a variety of other products. Earlier this month she had an email notifying her of a 40 per cent cashback offer on in-store purchases at Body Shop.

Because she has registered her two main cards with Quidco – a Barclays debit card and a First Direct debit card – she was able to get her cashback when shopping last week at Body Shop in Leamington Spa.

‘It’s great,’ she says. ‘I’m using my usual bank card and I don’t have to faff about with loyalty cards or vouchers, but I get a 40 per cent discount.’ She spent £52 on bath lotions and shampoos, and in due course can expect £21 cashback in her Quidco account.

The bank card tie-up is proving popular, with one million cards registered through Quidco’s scheme, and about 15,000 being signed up each week.

- Which are the big cashback services?

There are two leading cashback operators: Quidco, with three million members, and growing at 90,000 a month; and Topcashback, with two million, also growing very rapidly.

Together these two pay £80million in cashback each year. Both businesses are privately owned.

Quidco was set up by Canadian-born husband and wife team Paul and Jen Nikkel, now in their early 30s, who founded the firm in 2005 while at university in Sheffield. 

  More... Paralysed by choice! Shoppers spend a whole DAY looking online and scouring the High St for fear of missing out on deals Play your cards right: The best credit cards for spending, holidays, rewards or clearing your debts Supermarket and store cards can work for savvy shoppers... but don't be blinded by enticing discounts when you reach the till Start earning cashback today with Quidco

Several senior executives joined Quidco in 2009, buying stakes in the business. It employs 100 staff today, most of whom are based at ‘Silicon Roundabout’, an area on the northern edge of the City of London noted for technology businesses.

Topcashback was also founded in 2005 by entrepreneurs Oliver Ragg and Mike Tomkins, who remain the sole owners. It employs 70.

There are other, growing cashback providers, including the Mail Rewards Club, operated by DMGT, publisher of The Mail on Sunday. The Mail Rewards Club provides a range of member benefits including a cashback service similar to those offered by Quidco or Topcashback, where it partners with 2,500 retailers.

Cashback services are different from voucher-based discounters such as Vouchercodes. Here, shoppers benefit from exclusive discounts when they click through to shop on specified sites, or when they download vouchers for high street trips. But they do not get cashback.

Similarly, bulk-purchasing sites such as Groupon offer limited, discounted services through deals with other firms, but not cashback.

'I’m not worried that my smartphone tracks all my spending habits'

Convert: Paul Hair has saved £1,500 in three years

Civil servant Paul Hair was sceptical about cashback before becoming ‘an evangelical cashbacker’.

He uses Topcashback and  has bought a new laptop through  it – from Apple – as well as insurance, mobile phones, clothes and toiletries.

Paul, 28, from Brough,  East Yorkshire, believes one of the major advantages of cashback (apart from the £1,500 he says he has saved in three years) is that he is told about products and services he is most likely to want. And although not everyone might like it, this is part of the power of cashback – the companies amass enormous amounts of data on  who shops where and for what.

Paul uses an application on his smartphone that enables Topcashback to know exactly where he is at any time. It can  then tailor its offers based on  his location and nearby shops.

This is an increasingly used feature. Retailers benefit because they can target precise profiles of shoppers. But shoppers should also benefit, because they are not bombarded with adverts for things they don’t want. ‘I’m not worried about the information that is held about me and my shopping habits,’ says Paul. ‘As far as I’m concerned, the more information they have the better – it means  I will only be told about deals  likely to appeal to me.’

The eventual impacts of these developments on advertising  and retailing generally are only beginning to be considered.

Quidco managing director  Andy Oldham says: ‘The potential size of this sector is vast.

‘With a UK shopper signing up every 29 seconds, it is easy to  see the potential.’



Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o