Why Do Retailers & Companies Offer Cashback – Is There A Catch?
It is obvious why it is worth shoppers taking advantage of cashback, after all it is basically ‘free’ money, but why do retailers and companies offer cashback? Well firstly, there is no catch!!
In the past retailers & companies relied on advertising on TV/Radio or in Newspapers/Magazines/Billboards etc to make sales and gather leads for potential customers. Since the rise of the internet and online shopping though, they now also pay referral fees if an online business (e.g. a cashback site, a media site, a comparison site, a review site, a coupon site etc), or person (e.g. a blogger or vlogger), sends customers their way and that customer goes on to make a purchase.
Cashback sites just split this referral fee with you!
Retailers & companies are happy with this as they only pay out if they make a sale or generate a potential customer lead, whereas before they would need to pay for a TV advert for example, even if no one bought or signed up for anything because of it. Also retailers and companies always factor in the cost to make a sale into their margins when they sell a product/service, so if the percentage of cost allocated to making a sale is 5% – they do not mind how that percentage is split, as long as they make the sale! With cashback, they are only paying out after you have made a purchase or they think you could potentially do so in the future – so it’s win-win.
Even if you are an existing customer of the retailer, they will often still pay the cashback as they would rather you bought from them again, instead of another retailer who does offer cashback.
How Does Shopping Cashback Work?
- Register with a reputable cashback site & login
- Search the cashback site for the retailer(s) that you want to shop with
- Click on the special link to the retailer’s website
- Shop and checkout on the retailer’s site
- Start earning your cashback rewards!