Just what IS cashback? A question I’m asked pretty much daily – and so I’m going to break it down for you in this great guide. 

There is ZERO reason that you should EVER be paying full price for ANYTHING! Now this is a very bold statement I know – but I promise you that I’m not wrong! 

Receiving cashback can feel like something of an exclusive club at times. You hear people talking about how much they’ve earned, after they’ve earned it but don’t really know much about it yourself. The good news is that it’s completely free to get started. 

Earning money every time you buy a product or service soon adds up, even the tiny amounts, and I’m here today to tell you about the different types of cashback and how you can combine them to earn yourself a nice chunk of change. 

What is cashback? 

When you make a purchase, sign up for a service, obtain an insurance quote, or complete any number of other actions online, you’ve got the chance to earn yourself a little bit of cashback.

Cashback companies typically operate on an affiliate basis. This means that retailers work with cashback sites and apps, such as Quidco, TopCashback and Airtime, and pay them a little bit of money, known as commission, for helping generate new sales, sign-ups or just for getting visitors to their website. 

If you’re a social media user you’ll probably know about affiliate links already, and may have heard of affiliate marketing too, as your favourite social media influencers will share these types of links with you, as a way to earn themselves a little bit of commission. Thanks to cashback websites and apps you’ll be receiving a slice of this pie for yourself! 

I’m going to break down the different types of cashback, step-by-step, sharing exactly what is cashback, how the websites and apps work and my ones to help you earn as much cashback as you possibly can.

What are the different types of cashback?

What is cashback: traditional cashback

Traditional cashback is the original way of saving money on purchases you’re making anyway. It’s really simple. Shop via a cashback website or app, and you’ll receive back a percentage of what you spend with specific retailers. 

Think of cashback, in all forms, as a small reward for when you choose to be smart with your cash. You can earn money back on everything from buying your weekly food shop to upgrading your home broadband or booking that lovely summer holiday for your family to enjoy. 

You do have to remember to visit the cashback website or app, before you make your purchase, which isn’t the best if you’re a bit forgetful, but once you’re in the habit it’ll quickly become second nature to have a nosy on Quidco or TopCashback before you make a purchase. 

You won’t find all retailers on a cashback app, but there are hundreds to choose from, and if you’re purchasing an item that is available from multiple retailers, for the same price, it can be worth checking out what cashback is on offer before you click through and buy your goodies. 

Be sure to check your banking apps at least monthly for offers to activate there too. These offers can often be stacked with shopping via cashback websites, and you may be rewarded with cashback more than once for a single transaction – if you’re lucky! 

How traditional cashback works: 

1. Visit a cashback website, such as TopCashback or Quidco, and create an account using a little of your personal information. Cashback websites typically have both free and paid membership options, so check the tick boxes carefully when you’re signing up to avoid unexpected charges. 
2. Opt into any time-limited offers on the homepage. These appear quite often, especially during peak shopping times of the year such as Black Friday or Christmas. Often you’ll receive a guaranteed amount of cashback when you purchase through a specific retailer, or shop within a set category. 
3. Search on the cashback website for the retailer that you wish to shop with. You can do this using the search function or by browsing through the categories on the website such as travel, car insurance, groceries etc.
4. Click on the large pink ‘Get Cashback’ button. It’s pink on both Quidco and TopCashback so you really can’t miss it! Once you click on this you’ll be taken straight to the retailer’s website.
5. Shop as usual on the retailer’s website. Browse the website to make your selections, adding items to your basket and then check out your shop, as you usually would.
6. Sit back and wait for your cashback to be tracked and become payable. You’ll find that most transactions land in your cashback account as tracked within 24 hours, but it can take up to 7 days in some cases. It’s then a bit of a wait for your money to become payable, as retailers need to confirm you made the transaction and didn’t return goods before you’re paid out. 
7. Withdraw your free money. Different cashback websites have different payment methods available but you can typically expect to see Bank Transfer, Paypal, Gift Cards and charity donations at a minimum on most decent cashback websites. 

If you sign up to TopCashback with this link you’ll receive £10 welcome bonus when you reach £10 payable cashback as a thank you. 

What is cashback: gift card cashback

This cashback method is the shopping hack you didn’t know you needed. What you do is you buy a gift card, for the shop you’re about to purchase from, via a gift card cashback app. Then you use the gift card to pay for your shopping – but you earn cashback just for buying said gift card. Smart, right? 

It’s an additional step when you’re shopping, but cashback rates can be very generous making this super rewarding if you can actually remember to use one of the apps before you pay for your shopping.  

Gift card apps, such as Cheddar, everup and JamDoughnut, regularly run promotions where they’ll boost cashback rates temporarily and this is when I like to pick up a large grocery gift card to last me for a few weeks of food shopping. 

You’ll find hundreds of retailers listed on the gift card cashback apps and instead of asking what is cashback we should be focused on what is gift card cashback – as this is one of the more modern ways to earn a little cashback and you can often use this method alongside earning traditional cashback from Quidco or TopCashback too. 

If you sign up to Cheddar use my referral code CHLOEDC you’ll receive £5 free when you buy a gift card within 14 days of joining as a thank you. 

How gift card cashback works:

1. Download a free cashback gift card app, such as Cheddar, everup or JamDoughnut. If you don’t want to download an app you can purchase gift cards via TopCashback, Quidco and other cashback companies such as Airtime and HyperJar. 
2. Sign up for a free account using your personal information.
3. Browse on the gift card cashback app for the retailer that you would like to shop with. Be sure to check out any terms and conditions before you buy a gift card. Some gift cards can only be used online, others are just for in-store use and some are for either way to shop. 
4. Purchase a gift card to cover the cost of your purchases. When shopping in-store you could use Scan & Shop, or any similar service, to work out the value of the gift card that you’ll need once you get to the till. Alternatively if you know you typically spend around £100 then you could buy a gift card close to this value and even just pay the last little bit on your credit or debit card instead. 
5. Use your gift card when you shop in-store or online. You can use your gift card to pay at the till in-store or when you’re processing an order online. I like to fill my basket online before I purchase a gift card, so I know the exact amount that I need to purchase, and can maximise the cashback that I earn. 
6. Receive cashback instantly. When you’re purchasing cashback gift cards you’ll see the amount of cashback that you can expect to receive before you buy the gift card. Some apps, such as everup, offer you bonuses, such as coins, that you can use to play games and win extra cash rewards. I often look at a couple of apps – just to make sure I’m earning the most cashback I possibly can. It only takes a few seconds but adds up to a few extra pounds each week.

What is cashback: automatic cashback 

Automatic cashback is like having a tiny money fairy who drops you a few pounds on the regular – without you having to lift a finger. There is no need to remember to click through to a website or app before you make a purchase as everything is tracked automatically via a cashback app. This is the easiest cashback – as you really don’t have to do much! 

You link your credit and debit cards, or your bank account, to the automatic cashback apps and they’ll take care of the rest for you. Every 90 days you’ll be prompted to reauthorise read-only access to your cards or bank account, and the money will slowly trickle in without you doing a single thing.

There are no codes to remember to use, no links to click before you shop, no loyalty cards to swipe and no guilt over forgetting to visit TopCashback before you placed that large Boots order or swiped in-store to get another stamp towards a free coffee. 

Knowing what is cashback is half the battle, the other half is remembering to click through before you make purchases. With automatic cashback you don’t have to remember – which is great!

How automatic cashback works: 

1. Download an automatic cashback app, such as Cheddar or Airtime. These apps are completely free to download, and usually free to use too. 
2. Sign up for an account using a little of your personal information.
3. Link all of your UK bank accounts, debit and credit cards to the app. Add any cards, even ones that you only use occasionally. You’re granting read-only access to your banking transactions. 
4. Check the apps for promotions and special offers. Airtime has monthly promotions where you can opt-in and then it’ll track your shopping automatically and reward you with a small cash prize if you’ve made a set number of purchases, or another criteria. 
5. Shop as usual. No need to remember to visit a cashback website or app. You simply carry out your day-to-day purchases and the cashback will track automatically. 
6. Wait for your cashback to credit. Automatic cashback apps will notify you that your cashback has tracked and then after a set period of time, typically 1-2 months, it’ll be ready to withdraw.
7. Enjoy your free money. Airtime allows you to redeem your earnings against your mobile bill, hence the name, but other automatic cashback apps may allow you to receive a lovely little pot of cash instead.

You can read all about Airtime automatic cashback in my blog post and get a welcome bonus.

What is cashback: credit and debit card cashback 

Credit and Debit Cards can often be found with cashback bonuses attached. You’ll use your credit or debit card and you’re rewarded with a small amount of cashback, such as 1% back on most purchases. 

Some cards offer cashback on almost everything, while others may be focused on getting you shopping in a specific store, or even offer larger bonuses when you use their products and services, such as Marks and Spencer who often offer deals for customers of their insurance services and other products.

Chase offers a cashback debit card, that’ll allow you to earn 1% cashback when you use the card for your daily spends – and this is a great way to consistently earn cashback without having to put much thought into it. 

You simply swipe or tap your Chase debit card, like you would any other credit or debit card, and you’ll get a lovely 1% cashback automatically, up to a maximum of £15 per month. 

Cashback credit cards, or rewards credit cards, may offer 0.5% or 1% interest, for a fixed period, so they may not be as lucrative for you, however, they often come with additional credit card rewards so they can be worth a look.

How credit and debit card cashback works:

1. Find the right credit or debit card for your needs. There are a wide variety of cashback credit and debit cards available now. Chase is nice and straightforward, offering 1% cashback on almost all purchases, but others may offer different rates for introductory periods or even reward you with points instead of cash.
2. Apply for a card. You’ll need to provide personal and financial details to apply for a cashback credit or debit card and most cards are free.
3. Activate your card once it arrives. Make sure the card is fully set up and ready to use. 
4. Use your card to pay for your purchases. You may also be able to add it to any automatic cashback apps that you use to boost the cashback that you can earn. 
5. Enjoy your free money. The cashback card that you use will dictate how you receive your rewards but typically you’ll either receive a credit on your statement, be able to redeem points for gift cards or other loyalty benefits, or receive cash into your bank account.

Frequently asked questions

What is cashback – is it free money?

Yes and no! It’s free but really it’s just a bonus for spending your own hard earned money! You don’t have to do anything extra to earn it, just earn it via one of the cashback methods above, and you’re set. 

What is cashback – is it a refund?

No. A refund is received when you return an item you purchased or cancel a service. Cashback is a reward for your own spending. Think of it like a thank you for shopping with a particular retailer or via a specific website. 

Is cashback safe?

Yes. With websites like Quidco and TopCashback you just click through from their website and then use the website you’re shopping with as usual. 

When you’re using automatic cashback apps you’re just granting read-only access to your account. 

Make sure you’re not spending money just to earn cashback and you’re all good. 

Is there a catch to cashback? 

Sometimes yes! You’ll want to pay close attention to terms, particularly on time-limited or purchase specific cashback. Have a nosy at the small print and you’ll be set. 

Who pays cashback?

In a roundabout way the money comes from the retailers themselves. Retailers reward cashback websites for sending you over to them, after you make a purchase.

Think of it as your favourite brands giving you a little kickback just for shopping with them. 

What is cashback? What is the point of cashback?

It’s a nice reward for spending some of your hard earned money. Ultimately retailers are using it as an incentive to try and work with cashback partners and other websites to get more visitors to their website, or more footfall in their stores. The hope is that once you visit your favourite store, or website, you’re going to be tempted into picking up some treats! 

What do you consider to be the best cashback websites or apps? I’d love to hear from you in the comments!