Cashback websites are fantastic ways of making money on things you were going to buy anyway. With little effort, you can get as much as 6 percent back on your purchases – and this is a large amount if you are spending on something like a holiday.

Cashback websites make their money by earning commissions on any sales by referred customers or by on-site advertising. Some websites, such as Quidco, will pass on 100% of the commission they make to you in return for a small annual fee (in Quidco’s case, they charge a £5 annual fee and this is taken off the first £5 cashback that you earn).

Using cashback websites is easy – enter your e-mail address, choose a password, and choose how you would like to be paid. Usually, you have the option of receiving your cashback money through BACS, Paypal or a cheque.

From then on in, you can search on the Cashback website to find the retailer you are after. Click on a link and a harmless piece of information known as a ‘cookie’ is dropped onto your PC. This will track that the Cashback website referred you to the retailer and will allow the retailer to pass the comission back to the Cashback website, and therefore allow you to earn your cashback for your purchases.

Recent research by Kelkoo, a shopping comparison website, showed than around 40% of online shoppers had never used a cashback website and around 25% of people had never even heard of cashback websites.

To maximise the amount of cashback you get, it may be worth signing up to several different websites (although we don’t recommend more than 5 as it will start to get difficult to track and the annual fees you may have to pay may start to outweigh the cashback you earn). Different cashback websites will have different offers and retailers available therefore by signing up to a few, you maximise your chances of getting cashback on your purchases. Although most deals are available on all websites, occasionally some retailers will place exclusive offers on a website therefore you will need to be signed up to the cashback website to earn your cash!

And if you want to take things one step further, don’t forget to use a cashback credit card to make your purchase – partly because you are more protected when purchasing online and partly because you will earn even more cashback on your online purchases.

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