Cashback websites are a type of Reward website that pays its members a percentage of money earned when they purchase goods and services via their affiliate links.

The cashback website will receive a commission payment from the retailer and once the purchase is confirmed will then share this payment with the customer who made the purchase. This means that the cashback site makes a profit on the sale and the consumer gets to recoup some of the initial outlay back.

Members can earn money on many types of online purchase. These can range from consumer electronics to finance products and furniture. The most profitable cashback deals often involve finance related goods such as insurance products, loans & mortgages where significant amounts of cashback can be generated from a single purchase. Other retailers such as expensive fashion retailers often tend to carry high percentage cashback rebates due to their profit margins.

Cashback websites often place a threshold on when a customer can withdraw their earnings, thus making it necessary for a customer to return to the cashback site to add to their cashback earnings in order to reach the threshold target, driving loyalty to the site. This is particularly important since many of the shopping websites advertised through cashback websites would rather customers visit their site directly.

When your earnings have reached the set amount you can request a payment directly on the cashback website. Usually you will be paid via BACS (bank transfer) or you will have the option of being paid in gift vouchers. The gift vouchers are usually obtained at a trade price, and so the cashback website saves money by paying people in online gift vouchers. These vouchers are sent using e-mail to the customers, and consist of a code of numbers and letters, which when entered on certain online stores can be used to deduct money from the final cost of their order.

Many cashback sites incentivise their customers further by offering them benefits or cash to refer others to the site. This provides the benefit both to the cashback website and the customer as it helps the customer to build up their cashback and helps the cashback website to grow by signing up new members without having to worry about spending money on advertising.

The number of Cashback Websites has increased due to the presence of companies like Tradedoubler which make it relatively easy to create this kind of website.^[1] Other low barriers to entry mean there are many new companies still entering the market.

Some of the more popular UK cashback websites are Greasypalm, Quidco, Rpoints, MutualPoints and eDealsUK.^[2]

Some US cashback websites include Shop4zero, BigCrumbs, Ebates and FatWallet.

• Cash in on cashback - Times Online
• 'Cash back' websites lure shoppers - BBC News