How Cashback Works, and How to Get Money Back on What You Buy
Cashback is a simple idea that saves people a surprising amount of money: you get a portion of what you spend handed back to you, for buying things you were going to buy anyway.
A retailer wants your custom, so it pays a small commission to whoever sent you its way, and a cashback service passes most of that commission back to you. There's nothing too good to be true about it, it's just a slice of a shop's marketing budget landing in your pocket instead of a billboard.
The part that confuses people is that cashback comes in a few different forms, and they don't all work the same way. Some pay you for shopping online through a link, some pay you through discounted gift cards, and some pay you on specific products in your supermarket shop when you scan the receipt. Each suits a different kind of spending, and the clever bit is that you can often use more than one at once on the same purchase.
This page explains the main types and points you to our detailed guides for each, so you can pick the ones that fit how you actually shop.
Cashback apps and sites
The most common kind pays you for shopping online through a cashback app or website, on everything from insurance to clothes to a weekly grocery delivery. It's where the biggest payouts tend to be, especially on large purchases.
Our cashback apps roundup covers the best ones to start with, and our app reviews go through each cashback service in more detail.
Gift card cashback
Some services reward you at the point you pay, through gift cards, and this one comes in two forms. With apps like JamDoughnut, you earn instant cashback when you buy a gift card that you then spend in store or online, and that reward lands in your cashback account.
Once you reach the minimum withdrawal, usually £5 or £10 depending on the service, you can take it as cash to your bank, or cash out to a gift card, such as a supermarket gift card, and that way you're effectively getting free food from cashback you've already earned.
Our JamDoughnut guide walks through exactly how this form of instant gift card cashback works.
The other gift card cashback model works differently: you buy the gift card below its face value, paying perhaps £95 for a £100 gift card to spend, so you're effectively buying that gift card at a discount, rather than earning cashback afterwards.
You'll find gift card services alongside the others in our cashback apps roundup, with full write-ups on our cashback app reviews page.
Supermarket cashback apps
These work differently to normal cashback, giving you money back on specific products in your food shop when you scan your receipt.
The amount of cashback you can earn will vary depending on each individual cashback offer; it might be 50p back on a £5 purchase, but equally, could be as much as 100% back on a product, meaning you may well get that product for free, once your cashback has been paid to you.
They're built around the weekly grocery shop rather than online spending, and are product-specific, and that often means buying a product that otherwise you might not have bought, so you have to weigh up if the cashback amount warrants making a purchase you wouldn't have made, or if perhaps you can swap something you intended to buy, for this cashback item, meaning the saving is real rather than you actually spending more, which may defeat the object of using a cashback app to be more money savvy.
Our guide to supermarket cashback apps explains how they work and which are worth downloading.
Cashback: your questions answered
What is cashback in simple terms?
Cashback is money you get back for buying things you were going to buy anyway. A shop pays a commission to whoever sent it a customer, and a cashback service passes most of that back to you. So you shop as normal and receive a small amount in return.
Is cashback legit, or is it a scam?
Cashback is genuinely legit, and it's a normal part of how retailers advertise. They spend money attracting customers, and paying a slice of that to a cashback service, which shares it with you, is simply cheaper for them than other advertising. Nobody is giving away money for nothing; you're getting a share of a shop's marketing spend.
How do cashback companies make money if it's free?
They keep a small part of the commission the retailer pays them, and pass the rest to you. The retailer is happy because it gained a sale, you're happy because you got money back, and the cashback service keeps a slice for running the service. That's why it stays free for you to use.
How long does it take to get your cashback?
It depends on the type. Gift card cashback is usually instant, supermarket receipt cashback takes anywhere from minutes to a few days to approve, and shop-through cashback on things like insurance or broadband can take weeks or even months to clear. You then withdraw it once you pass the service's minimum.
Are cashback apps safe to use with my bank details?
The established ones are safe and use secure, bank-level connections, and many only ever have read-only access, meaning they can see a transaction but can't touch your money. As with anything, download only from official app stores and read what each service asks for before linking anything. Stick to the well-known names, and you're on solid ground.
Can you use more than one type of cashback at once?
Yes, and it's how you get the most back. Because the different types work on different things, you can often stack them, for example paying with a discounted gift card, claiming supermarket cashback on specific products, and earning shop-through cashback on the same order. Each one is earning you money in a different way at the same time.
What's the catch with cashback?
The main catch is that you only benefit if you're buying things you genuinely need, rather than spending more to chase rewards. It also takes a little patience, since some cashback takes time to clear and you usually have to reach a minimum before withdrawing. Used sensibly on your normal spending, though, there's no real downside.