What are Cashback Websites and How do They Work?

By: Picky Promos

Cashback websites are sites that have affiliate relationships with retailers, and they send users to the merchant's site and share their commission with the user. Wikipedia has some great info on cashback sites, but the main question is: is it worth it? And are you potentially foregoing discounts you could get on the site otherwise? How large are the commissions and do you do enough shopping to make it worth it?

The lowdown is that commissions are pretty low, and you may only make a few cents on each purchase. The cashback site will be keeping a big percentage of the haul instead of sharing it with you. And it’s a hassle to remember to do and keep doing. There are browser add-ons that streamline the process as Wikipedia notes, but it’s still a hassle that personally I don’t want to deal with.

Recently a company called eBates did a commercial on television - I remember seeing it. It looked too good to be true, but it works. Business Insider had a great article on Ebates recently, and they had positive things to say. I just don't think I would want to have to remember to visit the eBates site first, and I don't want the browser add on that alerts me. It's just too much of a hassle unless you spend lots and lots of money constantly online.

Some online companies provide incentives, and it’s a common rule that you cannot combine incentives. You could easily find a coupon code online that will give you free shipping, fifteen percent off, ten percent off, or in some cases even more. It typically will be offered by another coupon company that will also be getting a commission, but the savings to you will be the same or more. In my opinion, it’s better to get a discount on a purchase immediately than wait for a cashback site to get around to paying me a few pennies after I rack up enough the get over the minimum payout threshold.

I don't know if the retailers will tolerate cashback sites for too long. They are really just affiliate sites, and such sites are supposed to help spur the customer to make a purchase. Cashback sites have to real information, price comparison, or anything of that nature. They just promise to share the money with you without providing any real value to the ecommerce company you are buying from.