What is Cashback and how does it work?

What is Cashback and how does it work?

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If you’ve been interested in saving money, or money hacks you’ve probably come across the incentive program: cashback.  Cashback is a pretty simple concept:  spend a certain amount, get a certain amount back into your account.  Whether it’s a cashback website like ours (or Ebates, TopCashback, or Giving Assistant) or a cashback credit card incentive program like the American Express offering a 6% cashback rate for groceries, these programs definitely reward you for shopping habits.

AMEX’s cashback card benefits

 

In essence, if you have 6% cashback on groceries and you spend $100 on groceries = $6 cashback

About those Cashback cards…

The credit card space is one of incredible competition to win your application.  Cards offering cashback are one surefire way to peak many people’s interest.  We love the American Express Blue Card Preferred because you get 6% cashback on groceries (an everyday purchase).  Other credit cards are offering cashback for streaming services and dining out.  Pick a card that works for you and get the maximum amount of cashback.

Get the AMEX Blue Preferred

About the Cashback websites…

Cashback websites like MoneyHax operate in a very similar manner.  Become a member and be eligible to get cashback rebates whenever you use the website and click through to a merchant like Home Depot or Wayfair.  If you end up buying after you click the links provided, you’ll get a certain amount of cashback back into your account (on the cashback website, not on your bank statement).  It’s hard to believe that in today’s online shopping world, only a small percentage of people actually use this concept and lose out on potentially thousands of dollars each year depending on their shopping habits.

Get Cashback

Websites like these make money through Affiliate commissions.  In other words, when you do receive cashback from your shopping, the website also makes a cut of the money too, which is why you see different cashback rates on different sites.  Some cashback website have more opportunities and merchants to choose from, or some have higher cashback rates than others.  This all depends on the management of the website as Affiliate commissions are negotiated from time to time.

Fun facts: our competitors operate with a much larger budget and have spent millions developing a cashback solution.  We have our own solution without venture capital involved.  Let’s see here:

  1. Rakuten buys Ebates for a cool $1 Billion
  2. TopCashBack earns a pre-tax profit of $10 million in 2019
  3. French cashback site gets acquired for $123.5 million
  4. Capital One purchases Jewel for an undisclosed amount

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