Cashback Guide: What is cashback, and how does it work?

Are you tired of the rising cost of living and want to save some money on your purchases? Look no further than cashback programs. By signing up with cashback apps and sites, you can receive a percentage of the purchase price back in cash - without the item costing you more. And, with options like Grow My Money, you can even have the percentage go towards paying down your mortgage or growing your superannuation balance. But before you start racking up the cashback rewards, it's important to understand what cashback programs are, how they work, and their pros and cons. Let's dive deeper into the world of cashback programs and provide you with valuable tips to help you maximise your savings. So, let's get started and learn more about cashback sites.

How does shopping cashback work?

Cashback is an amazing opportunity to save money on your purchases. By signing up with cashback apps and sites, you can receive a percentage of your purchase price back in cash, or in some cases, cashback towards a goal such as growing your superannuation or paying down your mortgage. These incentives are provided by third-party applications that you shop through, so you can still shop at your favourite retailers and save money. You can receive cashback on top of store discounts and reward points - it's a win-win situation. When you shop through cashback apps or platforms, you can easily find deals across a range of retail products, from homewares and clothes to shoes or cosmetics. Once you make a purchase, part of the commission received by the online platform from the retailer is returned to you. This is usually credited to your account within a set period, depending on the cashback site and the retailer. With most cashback sites, you can also enjoy your cashback on top of store discounts and reward points. And the price of your items doesn't cost you any more to purchase.

Does cashback mean free money?

Cashback is a great way to earn back a percentage of your purchase! It feels like you're getting free money, but it's important to remember that you still have to spend money to receive the cashback. However, it's still a great perk that can be very helpful when used for planned purchases.

Examples of cashback sites

Australian cashback programs include popular shopping apps or sites like ShopBack, Cashrewards, Kickback, and innovative cashback sites like Grow My Money. Grow My Money - formerly known as Super-Rewards - is a unique cashback site offering a different destination for cashback rewards. It lets you turn your shopping cashback into mortgage payments or superannuation savings. With the power of compound interest, every cashback contribution multiplies your money. Canstar.com.au reviewed all the Australian cashback sites mentioned above, noting they offer over 1,000 retailers with an average of around 7% cashback per offer, are free to join and have apps available on both iOS and Android. If you want additional cashback research, you might want to read the Forbes cashback guide, too.

Pros of cashback

1. Saving money

By using cashback sites, you can earn a percentage of your purchase price back in cash, which can help you save money on your everyday shopping.

2. Additional rewards

Cashback rewards can be earned on top of any store discounts or reward points, which means you can enjoy even more savings.

3. Goal-oriented cashback

Some cashback sites like Grow My Money allow you to direct your cashback to specific goals, such as paying down your mortgage or growing your superannuation balance.

4. Increased exposure for small retailers

Cashback affiliates can be beneficial for small retailers who are looking for positive exposure to a wider audience.

5. Wide range of retailers

Cashback sites offer access to a vast range of retailers, from popular brands to niche stores, providing you with a wider range of options to choose from.

6. Easy to use 

Cashback sites are easy to use and require minimal effort on the part of the consumer. All you need to do is sign up, shop through the site, and earn cashback on your purchases.

7. No fees

Cashback sites are typically free to use, which means you get the benefits of cashback rewards without paying any fees.

Cons of cashback

1. Potential for overspending

Overspending can be avoided by setting a budget, sticking to it, and using cashback rewards as a bonus rather than a reason to spend more.

2. Delayed cashback payments

While delayed cashback payments can be frustrating, they can also provide a welcome surprise when they arrive, giving you a little boost.

3. Eligibility criteria

Some cashback offers may be subject to eligibility criteria, such as predetermined purchase sizes or frequencies, which may limit your ability to earn cashback rewards.

4. Limited cashback options

Limited cashback options can be offset by the wide range of retailers available on most cashback sites, giving you plenty of choices for your shopping needs.

5. Card-Linking

While card-linking can be a minor inconvenience, it's also a simple way to earn rewards without remembering to activate them or enter codes, making it a convenient and hassle-free option for busy shoppers. Many popular retailers are now signing up for card-linking programs.

Cashback programs are a great way to save money on purchases. By signing up with cashback apps and sites, you can receive a small percentage of the purchase price back in cash or even have the percentage go towards paying down your mortgage or growing your superannuation balance. While cashback programs may not provide you with free money, they offer cash back on the purchases you were planning to make. With various cashback sites available in the market, it's important to do your research and find the one that suits your needs. So, start exploring the world of cashback programs, or join Grow My Money today and maximise your savings!