How to make money from cashback websites

How to make money from cashback websites

  • Australia has a few popular cash back websites including Cash Rewards and ShopBack.
  • Expect to earn an average of 5-7% back on your purchases.
  • Main drawback: it can take 60-90 days to get your cashback after purchase.

$1.95 billion. That’s the estimate of how much Australians spent per month in 2017 on online shopping. And this figure is growing daily, as more brick-and-mortar stores join the world of eCommerce. 

But did you know that for many purchases you make online you could be receiving cashback? We explore the world of cashback sites and how you can take advantage of the benefits.

eCommerce spend is on the rise

we're going shopping

While regular brick-and-mortar businesses still make up the majority of the retail sector, there is no doubt that eCommerce spending is on the rise. The convenience of buying online and the reduced overheads for the retailer make it a trend that is set to continue for years to come. While Aussies have taken to online shopping for fashion, homewares and electronics, we have many more industries that are set to boom in coming years.

Take online grocery shopping for example. Currently, online grocery sales are expanding seven times faster than other segments, according to a report from Nielsen. With the large majority of Australians having internet access and a mobile phone, it’s easier than ever to head online to make a purchase. In fact, more than 65% of people in Australia currently shop online.

The most popular stores for online sales in Australia include JB Hi-Fi, The Iconic, Dan Murphys, Kogan, Catch of the Day, Appliances Online, Booktopia, Red Balloon and Hard to Find.

Plus major stores including Coles, Woolworths, Target and Kmart have opened eCommerce websites to take advantage of this growing market.

Aussies are in the top ten spenders worldwide

The State of Australian eCommerce 2018
Source: The State of Australian eCommerce 2018 according to Statista.com

It’s expected that global eCommerce sales will hit $4.5 trillion by 2021, with Australia sitting in tenth position for eCommerce sales worldwide.

As we head online to shop, it’s suddenly become much easier to compare the price of a product across multiple websites, making sure we get the best price possible. But did you know you could be leaving money on the table if you aren’t taking advantage of the benefits of cashback websites?

How do cashback websites work?

Young attractive woman struggling to understand how cashback websites work

Australia has a few popular cashback websites including Cash Rewards and ShopBack.

The way they work is that once you sign up for free as a member of one of these websites, you can earn free cashback just for spending as you normally would online. All you need to do is click on a store that you want to buy something from, by visiting the cashback site first and clicking through from there.

Sometimes you need to enter in a coupon code, but the instructions are really easy to follow. They have so many stores here to choose from, including Woolworths, Expedia, Bonds, David Jones, etc.

You might be thinking, how can this work? Why would they give me money back? In the case of Cash Rewards, they earn a commission for referring you to the shop you bought from, and they pass on some of this commission they earn through to you, the customer.

This effectively gives you a percentage saving on every grocery and retail purchase that you make online.

What are the cashback site options?

The main players in the Australian market are Cash Rewards and ShopBack.

It can be tricky to compare each of the sites side by side, as many cashback sites offer roughly the same standard cashback percentages for many of the same retailers. So you’ll need to do your own research for the best deals on a particular day, as percentage savings for some brands can fluctuate.

Remember to get cashback before purchasing

Amazon cashback notifier
Some cashback sites have browser extensions that you can download to remind you to claim cashback for purchases on eligible websites

One of the biggest issues once you sign up on a cashback website is to remember to visit it before you make an online purchase. Both Shopback and Cash Rewards have solved this dilemma by creating a downloadable notifier, which pops up when you visit an eCommerce store that is a cashback store.

This comes in really handy, as there are now over 1,200 retailers that you can earn cashback from. Some of the larger online retailers include Amazon, Dan Murphys, The Iconic and Woolworths.

You’ll also need to make sure you have cookies enabled on your website so that your purchases can be tracked. Ad blockers disrupt the sites’ ability to track your activity and give you the cashback from your order.

How much cashback will I get?

cash shower

In the case of Cash Rewards, you will earn an average of 5-7% back on your purchases. But the amount does vary depending on the brand.

If you usually spend around $200 a week on groceries at Woolworths, you can save 5%. You need to purchase Woolworths eGift cards in order to enjoy these savings. While it might not seem like a lot, over the course of a year the savings can add up to a healthy $520.

What’s the catch?

Lady looking confused holding a laptop

Now, this might all start to be sounding pretty appealing, right? Surely there has to be a catch.

Well there is, but it's something that we can live with. The main drawback is that there is often a delay in receiving your cashback after you make a purchase. The time frame is usually between four to 12 weeks. So, if you’re looking for an immediate saving, that can be a long time to wait.

You’ll also need to reach a certain threshold of cashback earned before you can redeem it. This usually isn’t too high – about $10 or so before you can transfer the money to your bank account or Paypal account.

Be sure to check the terms and conditions that accompany each offer, as there could be certain exclusions on particular product purchases from a participating retailer. And you could be restricted on how many claims you can make a month.

How much can Melissa save in a year?

The following case studies are fictional in nature and are intended to represent possible scenarios only. 

Let’s take a look at how much Melissa could save a year if she was to sign up for Cash Rewards. Here’s a breakdown of her spending in the past year.

  • She shops at Woolworths and spends around $250 a week on groceries including baby formula and nappies.
  • She fills her car up once a fortnight at a Caltex petrol station. It costs about $80 each time.
  • She spends around $1,000 a year purchasing clothes for herself, from The Iconic.
  • She spends about $400 a year on Bonds clothing for her young children.
  • She also shops online at Amazon to buy Christmas presents for her family and friends and spends around $800 each year.
  • The family has switched its gas and electricity bill to Energy Australia.
  • Melissa, her husband and two children average one two-week holiday a year. Last year they went to Hawaii as a family and stayed for two weeks at the Hilton Hotel, spending $2,700 on airfares, $4,200 on accommodation and $175 on travel insurance.

Now let’s take a look at what she could have saved if she had used cashback for each purchase.

PurchaseWoolworths eGift cardsFlightsThe IconicBondsAmazonEnergy billPetrol eGift cardsHotelTravel insuranceTotal
Cashback5%1.4%7%5.6%5%$1265%5%12%-
Yearly total$650$37.80$70$22.40$40$126$104$210$21$1281.20

How much could James have earned in cashback this year?

Let’s take a look at how much James could save a year if he was to sign up for Cash Rewards. He’s currently single and rents an apartment close to the CBD in Sydney. Here’s a breakdown of his spending in the past year.

  • Shops at Woolworths and spends around $100 a week on groceries for himself.
  • Orders dinner from Menulog about twice a week at a cost of $25 each time. 
  • Buys about $40 worth of alcohol from Dan Murphys once a fortnight.
  •  Fills his car up once a week at a Caltex petrol station. It costs about $80 each time.
  • Starts a health kick this year so buys some new gym gear, shoes and a watch from Rebel Sport for $750.
  • Goes camping regularly with his mates so has spent about $1,000 this year at BCF.
  • Buys a new MacBook Pro laptop from the Apple store for $2,199. 
  • Heads to Europe for two weeks to visit friends. Just books flights ($1,500) and travel insurance ($130) as will couch surf with mates when he is there.

Now let’s take a look at what he could have saved if he had used cashback for each purchase.

PurchaseWoolworths eGift cardsMenulogDan MurphysCaltex eGift cardsRebel SportBCFApple StoreEtihadTravel InsuranceTotal
Cashback5%4%3.4-7%5%3.5%3.5%3.5%1.6%12%-
Yearly total$260$104$52$208$26.25$35$76.96$24$15.60$801.81

As you can see, both Melissa and James didn't need to change their buying behaviour to have saved between $800 and $1,280 a year.

So what are you waiting for? Have you signed up to a cashback website yet?

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