Saving Money Online 101: Cash back sites

Now that you have a written list of items you are hunting for over the Christmas shopping season and you know how to earn gift cards with Swagbucks, it’s time to start strategizing!

Did you know that almost every single website out there offers a commission to other sites for bringing them a sale? It’s called affiliate marketing. This is why there are random and sometimes intentional links and graphics to other sites all over the web (including on Frugal Living NW — go here if I’ve piqued your curiosity). Every time you make a purchase through one of these links, the site that sent you there gets a cut of the sale.

Cash back sites have come up with an ingenious business model. What they do is agree to give you a piece of the action if you go through their link to make a purchase. The final price you pay or the product you receive is exactly the same as if you went directly to the site. Cash back sites are simply a kind of a front door for 1000′s of online stores. You just walk in and start shopping. The participating stores then give the cash back sites a commission which they share with you. Win-win, right?

There are two cash back sites I regularly use: Ebates and ShopAtHome. These sites represent pretty much the same stores (which is most stores out there except for Amazon), but oftentimes with different cash back percentages. You just have to check both sites when you’re ready to make your purchase. They also have slightly different terms for payout and bonuses:

Ebates offers a $5 bonus for creating a new account and making your first qualifying purchase. A qualifying purchase is one that totals at least $25 within the first 90 days of creating your Ebates account. Ebates pays out every quarter once your account reaches $5.01 cash back. Bonuses do not contribute toward your payout threshold. Ebates pays by check in the mail or PayPal.

ShopAtHome offers a $5 bonus for creating a new account and making your first qualifying purchase. A qualifying purchase is any purchase completed within 30 days of creating your ShopAtHome account. ShopAtHome pays out every month once your account reaches $20. ShopAtHome pays by check in the mail.

Sometimes Ebates and ShopAtHome will offer special incentives when you make a purchase, which usually is a higher payout on a specific site for a limited-time (typically one day). For instance, a few days ago, Ebates increased the cash back for Magazines.com from 26% to 52%, but only for one day. If you purchased a $10 magazine subscription on that day through Ebates, you would have received $5.20 cash back on your purchase. If you want to purchase a magazine subscription as a Christmas gift, it’s best to hold off and wait until a cash back site jacks the percentage up. Then you’re getting a screamin’ deal.

Here are some important things to note with cash back sites:

:: Cash back takes up to 30 days to post to your account. It is not instant. The exact amount of time depends on how long it takes the merchant to square things up with the cash back site.

:: Cash back is really cash, not credit to a particular website.

:: Your cash back amount may be affected if you use a coupon code or a daily deal voucher. It’s hard to tell which merchants do this; you really just have to wait and see how it posts to your account.

:: Since payout is infrequent, it’s best to see cash back as a bonus and not the incentive to do a deal (kind of like the mindset you should have with rebating). If you have low cash flow, don’t do the deal because your money will be tied up for potentially several months.

We do our best to provide you the cash back percentages from both Ebates and ShopAtHome and specific instructions on how to use the cash back site when we post an online deal. Just another reason to continue to follow Frugal Living NW!

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