01 Jul

Top Cashback Guide: Cashback UK. How Does It Work?

The Fascinating Reasons People Love Cashback

Cashback: When it comes to making our money go further, frugality often feels like a losing battle. Most of the time, we find ourselves trying to strike an impossible balance.

Do we want to lose money this month yet enjoy a good time? Or do we want to build some savings whilst being miserable? Thankfully, some solutions help us to straddle this divide. For example, have you ever heard of cashback?

This popular platform has become an ideal way for many of us to get our hands on sums of money that might otherwise have evaded us. In this article, we are going to break down the most common questions about cashback, and why it is such a well-loved option in this day and age.

What is cashback?

Cashback is a reward incentive scheme run by companies and corporations, aimed at customers. The idea is to try and provide you with some kind of monetary reward to help you justify higher spending.

In the most basic form, cashback breaks down to a company giving you X% back of your purchase value in cash. In short, it works like a discount except you are given the money back by the company involved.

This might seem confusing, and it can certainly seem odd if you have never heard of cashback until now. However, these reward schemes have been offered by companies, credit card firms, and finance bodies for a long time now.

They essentially incentivise the spending that many companies need to help them progress, grow, and develop. With that in mind, cashback – and by extension cashback credit cards – are very popular today.

People like to get back some added value on their purchases, and cashback offers the perfect way for someone to do that.

What is the best cashback site?

Various platforms come highly recommended today. The three primary platforms for quality cashback payments are Quidco, Topcashback, and OhMyDosh.

1. OhMyDosh is the most interesting as it gives you the chance to sign-up for various cashback programs, win more rewards by referring people, and completing their Bundle deals.
2. Quidco is very popular, too, for many people as it offers you a very interesting range of cashback rates. You need to buy a plan – Premium or Normal – that costs you an annual fee.
3. Topcashback is arguably the biggest name, and it can offer you everything from direct cashback through programs to vouchers for major stores like Amazon, as well as various PayPal vouchers.

For the most part, though, you might also want to look into cashback programs for the companies that you tend to shop with the most.

Also, as mentioned, you should want to check out any potential cashback credit cards that you can get. Especially if you can make the payment quickly on your credit card, those nice new benefits can go a long way to keeping you very comfortable indeed.

If you are serious about picking up some cashback, then try out the trio of sites above. Discover cashback.

Top 10 TopCashback Compared To Quidco Deals

Other forms of cashback

Of course, if you were to go into some stores, you might get asked if you want ‘cashback’. Please note the difference between cashback and cashback.

You see, the former is an added transaction. When in a major store, such as a supermarket, you will often be asked at the end of your purchase if you want cashback. This is NOT the till operator offering you a discount!

In fact, it is simply an easy way for people to get cash back into their purses or wallet. Say, for example, you need some money in cash to get a taxi home, but you cannot reach a cash machine.

Many stores will allow you to add the cashback amount to your purchase, and then give you that amount out of the till in cash instead.

Cashback, though, is an incentive-based discount scheme. This is very different because it actually results in getting you some kind of reward for shopping. So, if you are in a major store and you are asked if you want cash back at the end of a transaction, just clarify what kind they mind!

For the most part, cashback reward programs are automatically added to your balance, so you don’t need to worry about getting cashback rewards activated manually. Just remember, then, that cashback and cashback are separate entities in shopping.

Common queries regarding cashback you need to understand

Thinking about trying to land some great cashback rewards? Then you are in luck.

However, before you go ahead and start looking for any potential cashback programs to sign-up for, we recommend that you spend some time looking into the common questions answered below.

This should cover almost any cashback FAQ that you might have about these programs, and what matters.

Use this information to your advantage, and you can soon find that even the most confusing of cashback reward programs can be easily understood.

A bit of planning and thinking can go a long way to ensuring that you fully understand what you are up against – and what benefits you can receive.

To help you ensure that you get the absolute maximum out of your cashback reward schemes, though, you should read on. Here, we can provide you with all of the information that you might require.

Is cashback free money?

No, cashback isn’t “free money”. For the most part, though, you can find that you get some kind of saving back in return. For example, most cashback programs are managed through credit card companies, or in partnership with these companies. In essence, a cashback reward simply is a small cut of the merchant fees.

Your card issuer is simply sharing a tiny part of the profits they would normally make from being involved.

The main reason for cashback programs today is that it helps incentivize you to buy things on your credit card as opposed to buying them with cash or other debit cards, as there is no reward in the transaction for the credit card company. Discover cashback.

Cashback is free money in the sense that you get it back, but it isn’t given to you for nothing. Given most people who use credit cards will take some time to pay off the purchase, the credit card company makes the ‘free money back using interest.

For the most part, then, cashback programs aren’t giving you ‘free’ money, as nice as it sounds.

How do you make money with cashback?

So, before you go ahead and do anything with a cashback program, it is highly recommended that you understand how to maximise its performance and potential. So, you could look to use various cashback websites (some are listed below) to help you make some extra money back in the long term.

However, since you can only use one cashback bonus per product purchase (purchase links are going to be linked to the cashback program), you cannot stack up cashback programs to make money.

The main way to make money with a cashback reward scheme is to simply compare the rewards being offered. Shop around enough, and you can often find a better number of returns being offered from one company to the next.

That is why you can make money with cashback – you simply are looking for someone who offers a higher percentage return than someone else. For the most part, though, you simply cannot make money with cashback without having to really look and hunt for the best deals across a range of the best websites in the industry.

Is cashback safe to use?

Yes, absolutely. As ever, though, you should do well to read all of the various Terms and Conditions attached to any cash back reward program.

No two programs are the same, and some can come with some pretty nefarious agreements and demands before you can collect your cashback rewards. So, spend some time reading over the content so that you know whether or not that particular reward scheme is safe to use.

Many just hop in and hope for the best, but a quick bit of reading can tell you everything that you need to know before you commit to anything.

It is always better to be 100% sure of the cashback reward scheme before committing to it. The same applies to any credit card cashback programs you want to use, as well.

Be sure to always closely read the terms and the conditions which exist, as it should give you a pretty significant idea about what you are dealing with.

The T&Cs are boring to read, yes, but it can be the difference between landing a good deal or finding yourself out of pocket.

Are Cashback rewards worth it?

Yes, they can be. It obviously depends on what you are buying, how much you buy online, and how often you use that program.

Many programs offering cashback tend to scale up and offer better value for you if you keep shopping. So, if you happen to only shop with that company once per year or so, you might find little value in the offers they can provide you with.

For the most part, though, you should find that the majority of rewards using cashback programs are worthwhile. Credit card companies are often happy to offer you a pretty extensive range of bonuses and benefits, too, that can pair up with the cashback program.

Rewards are often worth it purely on the basis that you would have been shopping there anyway. However, if you are buying something purely for cashback rewards, it might cost you more to do that in the long term than you could reasonably save.

In terms of worth, it depends on what you are buying and what the program can offer you. Discover cashback.

Why do companies offer cashback?

It might seem odd to you, and you might wonder why a company would essentially offer you a discount for nothing. However, the main reason is that it encourages you to shop with that company.

Very few products today are only sold by one supplier. As such, they know that if you don’t buy with them then you might go to a competitor. As such, they would rather give you a small discount on the order than lose you.

This is why so many companies today offer cashback. It’s also why credit card companies offer you the chance to get cashback; you are more inclined to put your regular shopping and buys on your credit card.

The merchant fees and the added costs that come with this transaction can help them to offset any “loss” made by offering you a discount via cashback.

While it might seem a silly idea to some, cashback really can provide a chance for someone to buy a product or a service from a business they might have not shopped with.

Which app gives the best cashback?

There are various apps out there that also offer cashback rewards, so you need to know where to look. We recommend that you look into apps including MyPoints, Swagbucks, Dosh, Earny, Drop and Fetch Rewards.

However, other good programs could be found through the bank that you use for your debit or credit cards. Often, they can give you a fair deal on cashback if you happen to choose one of their cards.

However, we recommend you avoid jumping in with the first cashback offer that you receive. The simplest reason is the most effective one; you might get offered a better deal if you wait it out.

A bit of planning can certainly go a long way to making sure you can find the best cashback options for yourself.

Don’t just go with the first offer because it sounds the best. A bit of planning and research can soon tell you if your decision is going to pay off for you down the line. To start with, though, search out the above apps to see what they offer. Discover cashback.

How do cashback rewards work?

The reward scheme changes entirely depending on who is involved. Cashback rewards come in all shapes and sizes, and how they are activated and their terms change.

Some are only provided on specific promotions, whilst some products/services might otherwise be exempt from being selected. With that in mind, you should look always read the process for getting your cashback with any rewards program.

Some will put the cashback value onto a credit card, while others will look to add the balance to your in-house rewards program. Before you commit to anything, work out what you are dealing with and you can avoid any potential risks or problems.

The sooner you understand the reward scheme, the easier you can use it to your advantage.

How do you redeem cash back rewards?

If you are looking for a way to redeem a cashback reward, then you will normally be informed on how to do so through the program. Most of the time, you will redeem the reward by buying through a specific link.

This will then notify the company of the cashback rewards on offer that you are using. However, if you are using a credit card reward, you normally find that simply buying the products on your credit card will automatically activate the X% cashback reward.

As ever, you need to look closely at the kind of information that is available about any project that you are thinking about joining. The sooner you can understand how the rewards are redeemed, the better.

Some will make you use a rewards scheme card that will automatically adjust your cashback to the right kind of level.

In essence, you should look to properly understand your cashback rewards simply by looking at the terms and conditions.

Most will automatically activate after purchase or be included in the price thanks to a specific cashback link. A bit of research, though, will be needed to ensure you understand the process fully. Discover cashback.

How can I get cashback online?

If you look at the above links to apps and websites, you should have no problem at all in finding good cashback solutions. However, we also recommend that you:

1. Speak with your credit and debit card provider. They can often point you in the direction of their online cashback facility so that you can try and land a bit of information from that.
2. Contact customer support for any company offering a reward or loyalty program that you might be interested in using. Sometimes, they can offer you cashback rewards as part of this.
3. Use websites like Money Saving Expert, as they can often show you the latest deals for cashback to help you save, or even make, some money down the line with a useful rewards scheme.
4. Invest time speaking with companies with who you shop regularly. Find out if they run any kind of regular schemes for cashback.
5. Utilise online coupon websites and stores that can point you in the direction of any new cashback schemes that might have opened up, particularly with companies you like using.

If you want to try and find some quality cashback online, then you need to do a bit of sleuthing around, some searching, and some customer support interaction. Do that, though, and you can pick up some pretty awesome cashback rewards.

Is Cashback taxable?

You might worry that by using cashback you run into the risk of seeing your savings become taxable. However, please note that all bank cashback is not included in any of your tax returns. You do not have to declare cashback payments as they are simply rebates or reductions in the original price, not an income.

However, please double-check with any company that is offering you cashback rewards as some schemes might fall into different jurisdictions.

We would recommend that if you have an accountant you arrange a chat with them to see what kind of inclusions you might need to provide with regards to the usage of cashback.

Given the majority of cashback programs are discount incentives as opposed to an interest or income program, though, you shouldn’t really be in a position whereby you need to declare any of your cash back savings.

As ever, though, a bit of interaction with the customer support team of any cashback program that you join up can soon clarify what kind of tax issues might crop up around their service.

Getting to grips with cashback

As you can see, then, there are quite a few queries that exist around cashback that can be more than a little confusing. If you are new to the subject, then you should read over this guide another couple of times to try and better understand just what you are getting when it comes to cashback programs.

As ever, you should spend some time looking over the terms and conditions which are given to you when it comes to any cashback incentive program. Sometimes, the information might need to be clarified so you know exactly what you are receiving from this particular program.

A bit of planning can go the extra mile in making sure you can enjoy a much simpler process, though. With programs like cash back, you always need to know:

1. What you are going to get from the cashback reward scheme.
2. How much do you need to spend to ensure you qualify for cashback.
3. Any terms and conditions on what can and cannot be determined as valid.
4. Where will the cashback rewards go: to your bank? A customer account?
5. Specific limits to how much you can spend, or need to spend, to be eligible.

Conclusion

All of these problems are common for you to run into when it comes to dealing with cashback. However, with a bit of analysis using the above, you should find it a whole lot easier to start going down the route of benefitting from cashback programs. Best of luck hunting for bargains!