How do cashback websites make money?
Have you ever wondered how cashback websites make money?
Let us explain how it works and why you should claim cashback
Cashback websites allow users to claim a small percentage of the sale of an item back as cashback. In an aim to be totally transparent with our users we would like to explain how cashback works and how we manage to give our users great cashback offers.
Where does the money come from
This is the most common question we are asked by our new users and its an easy one to explain. We use multiple affiliate marketing platforms to generate commission from referred sales. What this means is that when you click our tracking link and then buy something from one of our featured brands, we then subsequently receive a commission for promoting their website. Many people in the affiliate marketing business simply advertise brands and claim commission for each sale. We differ by tracking which of our users clicked the link and then give that commission back to the user, minus a tiny percentage for running the website.
Why would brands allow this?
It may seem strange that online retailers would allow this process to take place. It is almost like they are selling the item at a lower price. There is some truth to that statement. However, these brands have large advertising budgets and they also work this commission into their pricing. This is why you see many different cashback rates on our brands page.
Another reason is that brands do not want to miss out on a sale to a competitor. If their competitior is on cashback today and they aren't, they will lose a sale to that competitor. If a user sees that one brand is offering 20% cashback and the brand they was originally planning to use do not offer cashback, this could sway the user to change their mind.
So how does Cashback Today make money?
We take a tiny percentage of the commission we give back to the user to cover hosting, development, customer service and transaction fees. Our transaction fees for paying out cashback is one of our biggest costs which is why we have a £20 threshold on payouts. This allows us to limit the amount of transaction fees we incur, passing that saving back to you the customer.
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If you would like to find out more about Cashback Today check out our about us page