Get money back when you shop online

Cashback is a popular financial incentive that allows shoppers to receive a portion of their spending back. Whether shopping online or in physical stores, cashback offers are an effective way to save money without changing your buying habits. This article explains how cashback works, the best ways to use it, and what to look for in cashback programs.

What is Cashback?

Cashback refers to a percentage of the money spent on purchases that is returned to the buyer. The cashback amount can range from 1% to 30%, depending on the platform, the store, and the type of product or service purchased. Cashback offers can be found on a variety of categories, including:

• Electronics
• Clothing
• Travel and hotels
• Groceries
• Entertainment services

The cashback amount accumulates in your account and can usually be withdrawn to a bank card, e-wallet, or used for future purchases.

Types of Cashback Programs

There are several types of cashback programs available:

1. Credit Card Cashback: Many credit card companies offer cashback rewards. For example, a credit card might offer 2% cashback on groceries and 1% on all other purchases. These rewards are automatically credited to the user’s account or statement.
2. Online Cashback Platforms: These are websites or apps that partner with retailers to offer cashback when you shop through their platform. Examples include Rakuten, Swagbucks, and Honey.
3. Store-Specific Cashback: Some retailers offer their own cashback programs. These may be limited to specific products or categories, and the cashback is often in the form of store credit.
4. Bank Cashback: Certain banks partner with retailers to offer cashback when their debit or credit cards are used for purchases. The cashback is usually deposited directly into the bank account.

How Cashback Programs Work

Cashback programs operate in a simple way:

1. Shop through the platform or use a specific card: When you make a purchase using a cashback platform or eligible card, you earn a percentage of the amount spent back as cashback.
2. Receive the cashback: After the purchase is confirmed, the cashback is credited to your account. The processing time may vary from a few days to several weeks, depending on the store or platform.
3. Withdraw or spend: Once the cashback has been processed, you can either withdraw the amount to your bank account or use it for future purchases on the platform or in the store.

Platform Type	Cashback Rate Range	Payment Methods	Popular Platforms
Credit Card Cashback	1% to 5%	Statement Credit, Cash	Chase, Citi, Amex
Online Cashback	1% to 30%	Bank Transfer, PayPal	Rakuten, Honey
Store Cashback	1% to 10%	Store Credit, Discounts	Walmart, Amazon
Bank Cashback	1% to 5%	Direct to Bank Account	Capital One, HSBC

Pros and Cons of Cashback Programs

Like any financial incentive, cashback programs come with benefits and potential drawbacks.

Pros:

• Easy to Use: Cashback programs are simple to participate in. Sign up, shop, and earn.
• Savings on Everyday Purchases: You can save on items you already plan to buy.
• No Additional Cost: There’s no need to spend extra money to get cashback rewards.
• Variety of Options: Cashback programs cover a wide range of categories and products.

Cons:

• Time to Receive Cashback: Cashback is not instant and can take weeks or even months to process.
• Limited by Program Rules: Some cashback offers are valid only in specific stores or for specific products.
• Expiration: In some cases, cashback rewards expire if not redeemed within a certain timeframe.

How to Choose the Best Cashback Program

When selecting a cashback program, consider the following factors:

1. Percentage of Cashback: Higher cashback rates are obviously more attractive, but make sure the products and services align with your regular spending habits.
2. Categories Covered: Choose programs that offer cashback in categories you frequently shop in, such as groceries, electronics, or travel.
3. Ease of Use: The platform should be easy to use, and earning cashback should require minimal effort.
4. Payout Options: Some platforms limit how cashback can be redeemed (e.g., only through store credit). Choose a program that offers flexible payout options, such as bank transfers or PayPal.

Best Practices for Maximizing Cashback

To make the most of cashback programs, consider these strategies:

• Combine Cashback with Discounts: Use cashback along with promo codes, coupons, or store sales for double savings.
• Monitor Expiration Dates: Make sure to withdraw or use cashback before it expires.
• Check Cashback Tiers: Some programs offer higher cashback rates once you reach a certain spending threshold.
• Shop Through Cashback Portals: Always check if an online retailer is part of a cashback platform before making a purchase.

Cashback is a powerful way to save money on everyday purchases and larger expenses alike. By choosing the right cashback program and shopping strategically, you can significantly reduce the cost of your purchases. Whether through credit cards, online platforms, or store-specific programs, cashback offers tangible financial benefits with minimal effort.