Data Doctors: the facts about cashback sites

You would be forgiven for thinking that cash back websites are all scams. But Ken Colburn of Data Doctors says there is a lot of good value.

Q: Are these cash back websites a scam or are they safe to use?

A: The internet has become such an important way to get ripped off that the adage “If it sounds too good to be true, it probably is” has become entrenched in our collective psyche.

A healthy dose of skepticism will come in handy when it comes to rewards-based websites, but the good news is that there are plenty of legitimate resources you can use when shopping online.

Affiliate Marketing

In most cases, you create a free account that allows the site to track your purchases when you use their portal.

As long as you start from your portal each time you make a purchase, the reward or cashback is automatically tracked for you.

They don’t usually sell to you directly; they have an affiliate relationship with thousands of online retailers, where the rewards come from.

The concept of affiliate marketing began in the mid-1990s and has grown into a common way for new products and retailers to generate sales.

When an affiliate sends a customer to the retailer’s website and makes a purchase, the affiliate receives a small commission.

It has become so popular because the retailer only pays the affiliate when a purchase is made, which means that marketing spend can be directly correlated to sales.

Most cash back websites simply share the commission they receive from the retailer with the buyer.

Past and present

One of the first major websites to use the “cash back” model was Ebates.com, which was launched in 1999 and has become popular with avid online shoppers.

In 2014, Ebates was acquired by Rakuten, which now claims over 12 million members and over 2,500 retailers in their system.

Rakuten also offers cash back rewards for in-store purchases of items available through its mobile app.

Another popular shopping website called RetailMeNot started in 2006, focused on finding coupon codes for thousands of popular items. Coupon codes offered additional savings, but often they had expired, so you had to manually check if they worked before checking out.

Today, just about all cash back tools also provide automatic searches for valid coupon codes.

Another popular tool called Darling started as a promo code finder and has evolved into a rewards system as well. PayPal acquired it in 2020 for around $ 4 billion, which shows how profitable this business model has become.

Other popular rewards websites include Be Frugal and MrRebates; if you want to save for college there is You promise.

There are many how-to blogs online if you want to learn more about what resources to use and other useful tools such as Slickdeals, which can be used in conjunction with cashback sites.

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