Australians collectively pump around $320 billion dollars through retail checkouts each year. That’s a lot of brass, so why not be rewarded for all this spending?
Sharing the spoils with shoppers is what cashback websites do. You sign up, then receive money back for purchases made with participating retailers. It means savings on a wide variety of purchases are available to everyone – not just hardcore coupon cutters.
The cashback system works on the basis that these providers receive a commission from retailers each time you make a purchase via the app or website. Part of this commission is returned back to you – usually based on a percentage of the purchase price you paid.
With a variety of cashback sites to choose from, here’s a closer look at two of the biggest – Cashrewards and ShopBack.
How does it work?
Cashrewards says it offers a choice of 1,200 retailers, allowing you to earn money back either by shopping online or in-store. To be able to receive cash back when you shop in-store you will need to link your credit or debit card to your Cashrewards account, and use the linked card to shop. You can use the app or website to look for offers or you can also install a Google Chrome extension and you will be notified when you’re visiting a site that has cashback and offers available.
Exactly how much you get back varies between retailers and minimum purchases can apply.
As a guide, you can get 5% back on Ikea purchases when you spend over $150, save 1% on purchases over $20 at Liquorland or pocket savings of 10% at TerryWhite Chemmart with no minimum spend.
A good selection of cafes and restaurants are included, along with a wide selection of other outlets that extends to hotels, car hire companies, and even airlines.
Once your available rewards total $10.01 or more, you can choose to withdraw your cash into your bank or PayPal account.
ShopBack says it offers cashback at around 800 brands when you shop online using the app or website. It too offers a Google Chrome extension so you’ll be notified whenever you’re shopping at a store that offers cashback and coupons via ShopBack.
As a guide to what’s available, you can save up to 15% off Amazon Selected Essentials Brands when you spend a minimum of $40, save 5% on Uniqlo, and pocket a cashback worth up to $10 on UberEats. ShopBack also has an annual end of year ShopFest with additional discounts.
To get started, sign up with ShopBack, look for the relevant store on the ShopBack portal, and click on the one you’d like to visit. Be sure to follow the pop-up that redirects you to the store otherwise your cashback won’t be tracked.
The balance of your ShopBack cash rebate can be used for more shopping on ShopBack or you can transfer it into your bank account to use the savings elsewhere. You can only withdraw from your account once you have reached a minimum amount of $10 confirmed cashback.
Just jumping on the cashback rewards train, and thinking how funny it is that seeing $2.29 in your @ShopBackAU account is somehow far more exciting than scoring a 'meh' $2 discount. Who's with me? pic.twitter.com/1yoy2lH5HD
— Nina Tovey (@ninatovey) February 6, 2020
What does it cost?
There is no fee to join Cashrewards and no ongoing fees apply. An app is available for shopping on the go – it’s free to download and requires iOS 10.3 or later or Android 4.4 and up.
You won’t pay anything to join ShopBack and there are no ongoing fees. The ShopBack app is also free to download and requires iOS 10 or later or Android 5.0 and up.
Tips and traps
One of the catches with cashback programs is that the cash rebate on purchases doesn’t hit your account straight away. With Cashrewards it can take up to seven days for cashbacks to hit your personal Cashrewards account, but it can take up to 100 days for the money to reach your bank account. That’s because retailers wait to see if you’re going to return the goods and ask for a refund.
It usually takes around 48 hours for cashbacks to be noted in your ShopBack “pending cashback” account. However, ShopBack says the money may not appear in your bank account for 120 days. Again, this is because your purchases need to be reviewed and validated by retailers, and adjusted for returns.
Do note, if you use an ad blocker on your browser, ShopBack will ask you to disable the software during shopping sessions as it can affect cashback tracking.
How they compare
One of the challenges of cashback services is that it is extremely hard to make an apples for apples comparison between different sites. The savings are generally in the order of 5% but it is the short term “red-hot specials” that are offered at different outlets that make it hard to say which offers the better value for your shopping style.
On the face of it, ShopBack would appear to offer bigger savings on some brands (see table) but this is only a small selection of what is available. Both also regularly offer specials.
|Cashrewards v ShopBack compared|
|Retailer||Item||Amount spent||Cashrewards cashback||ShopBack
|Amazon.com.au||Antler Juno suitcase||$195||$13.65 (7%)||$15.60 (8%)|
|Booking.com||2-night stay QT Melbourne||$637.20||$57.35 (9%)||$57.35 (9%)|
|Bonds||2 Zip wondersuits||$49.90||$2.79 (5.6%)||$3.49 (7%)|
|Chemist Warehouse||Acqua Di Gio for Men Eau de Toilette||$99.99||$0.99 (1%)||$0.99 (1%)|
|Dan Murphys||2 bottles of Santa Margherita Pino Grigio||$39.80||$1.39 (3.5%)||$1.59 (4%)|
|The Good Guys||Dyson V11 Torque Drive Cordless Vacuum||$1049||$22.03 (2.1%)||$26.23 (2.5%)|
|The Iconic||Herschel Nova mid-volume backpack||$119||$8.33 (7%)||$4.76 (4%)|
|Deliveroo||Pizza and pasta delivered||$45||$0.45 (1%)||$1.00 ($1 for existing customers orders under $70)|
|Woolworths Online||Various groceries||$150||$2.10 (1.4%)||$3 (2%)|
|Source: Cashrewards and ShopBack app as at 18 February 2020. Cashback amount may vary based on type of item purchased and whether you are a new or existing customer. Terms & conditions may apply.|
The good news is you’re free to sign up to as many as you like and you can always look up who has the better offer before making a purchase. Given the breadth of retailers available with both Cashrewards and ShopBack, the real trick to stacking up the savings can be keeping an eye on the latest red hot deals.
That said, there is an area where Cashrewards may have the edge. Unlike ShopBack, which only offers savings when you shop online (and only through the ShopBack portal), subscribers to Cashrewards can also earn cashback when shopping in-store.
Importantly, don’t let cash rewards tempt you to overspend. Be prepared to shop around for the best deal, and resist the lure of marginal savings that could entice you to overspend.
About Nicola Field
Nicola Field is a personal finance writer with nearly two decades of industry experience. A former chartered accountant with a Master of Education degree, Nicola has contributed to several popular magazines including the Australian Women’s Weekly, Money and Real Living. She has authored several best-selling family-focused finance books including Baby or Bust (Wiley) and Investing in Your Child’s Future (Wiley).
Main image source: William Potter (Shutterstock)