Earn Cashback On Everything!

Cashback site Quidco is among several websites that offer you money back on your shopping. How do they do this? And, more importantly, are there any catches?

They say the best things in life are free. Whether you can find them is a different matter. A cynical statement perhaps, but these days when you're offered something for nothing, it's usually too good to be true.

However, as I was wading through various sites and discussion boards for our weekly Money Saving Tips, I came across several people who mentioned 'free money' through a website called Quidco, accompanied by statements such as, 'With Quidco save an extra £3.46', or, 'Don't forget to use the Quidco link, where you can save an extra £12.92.'

I dismissed these as fairly innocuous at first. Generally when I see the words 'free' and 'money' I express the same kneejerk reaction as when someone shoves a free newspaper in my face. I walk away -- and fast. But the more I saw this term being used, the more curious I was. Free cash? It's just too good to be true. Or is it?

Free money?

The truth is, cashback websites like Quidco have been running for several years. Other examples include Top CashBack, Rpoints and GreasyPalm, which all operate under the same principle.

Cashback websites are like a virtual middleman. You register with the site, using it as a gateway to all your online shopping. Your purchases are then tracked, earning you a percentage of your purchase back in points or pounds. This is then paid back to you as cash, or in vouchers. Many big names have signed up, including Tesco, John Lewis, Virgin Atlantic and Marks and Spencer.

Cashback is generated from the commission retailers pay these websites for the purchases you make. Amounts of cashback vary, and can be a percentage of your total purchase, or a flat fee, depending on the retailer and the product you purchase.

Sites like Quidco are keen to stress that you won't pay more for your goods if you shop through their sites. You click a special link which takes you to the merchant site, where you can continue to shop as normal. You won't pay more and warranties and guarantees apply as they would normally.

Also, if you're like me and are worried about what cashback sites do with your shopping footprint, Quidco is adamant that it will never sell your details to a third party, and only shares information about your particular transaction so you can claim your money.

What you can earn

Here's a quick look at what some of the cashback players are offering:

As you can see, different sites operate in different ways. Quidco levies an annual admin fee of £5, which it claims by keeping the first £5 cashback earned as an annual subscription fee.

Some sites also reward you for referring a friend. GreasyPalm pays £7 per referred friend and Rpoints £5.

It is also worth noting that Rpoints and Greasy Palm require you to earn £25 before you can make any withdrawals (this includes the initial sign-up bonus).

The amount of discount each site offers can also vary. For example, at the time of writing Quidco was offering 3% off online purchases at the Apple Store, compared to 1.5% with Rpoints. So, for example, for a 17' Apple MacBook Pro retailing at £1800, you'd get £54 cashback with Quidco, compared with £27 through Rpoints. As ever, it's important to shop around.

Maximise your savings

If you're really savvy, you could get even more cashback by paying for your purchases with a cashback credit card. The American Express Platinum credit card is currently offering 5% cashback on all purchases for the first three months, with up to 1.5% after the promotional period. Alternatively, Capital One's Cashback credit card offers 4% cashback for the first three months, and a flat 1% thereafter. Taking this into account, you could save an additional £90 and £72 respectively on the MacBook.

However, it is always worth bearing in mind that other retailers may still be able to offer lower prices on your item. If you're a student, for example, you'd be better off buying your MacBook from the Apple Store for Education, which offers 8% discount on the MacBook highlighted.

The main thing to remember is to not get sucked into buying anything just because you are being offered cashback. Compare other retailers to see if they're cheaper without cashback and last of all -- happy shopping, and earning for that matter!

> 76 Foolish Ways To Save Money | Maximise Your Cash With A Cashback Credit Card!