Cashback first became popular in the 1990s when some credit cards began offering cashback. The merchants and e-commerce owners have realised that more people prefer to get some actual money back instead of earning coupons.
The term cashback when used in regard to personal finance means to earn a percentage of the merchant’s price when a transaction is made.
Cashback is becoming a more preferred way to save money as compared to discount vouchers, because cashback is more flexible and can be used in various ways.
Even though cashback was first introduced with credit cards in the 90’s, with the development of e-commerce, more traders are offering cashback for their users as a marketing method. The first cashback websites were Quidco (in the UK) and Topcashback (in the USA).
In order to be able to use the cashback sites or mobile apps, you will need to create an account. When you purchase something online via the cashback site or app, your account will accumulate the cashback. Usually, you need to accumulate 10$ minimum in order to actually withdraw the money by transferring it to a bank account, via PayPal or another money transfer method.
By using the cashback site and apps you can save money from your normal online shopping. Unfortunately many people start purchasing more things just because of the cashback offered – this over-spending for things you do not really need will not save you money.
Some things you need to keep your eye on
There is always the risk that your cashback or rebate is delayed because of the delay of the transaction of the commissions from the merchant, the advertisers, or from other businesses to the cashback site. In fact many of the sites have included the period of 30-60 days as the time for receiving the cashback from a purchase in their terms and conditions.
Also, for newer cashback sites and apps, and those which are not regulated, it is a good idea to regularly withdraw or use your accumulated cashback money, because in case they shut down, you can lose that money.
Overall tips for new cashback users
If you are doing most or part of your shopping online, it is definitely worth trying and taking advantage of one or more of the cashback apps and sites. In the long run, this can truly save you some money.