In a world of cyber scams and phishing schemes, any website that offers free money is met with eye-rolling and skepticism.
So when you get an email about a site that promises to give you cash back on purchases, you’re probably tempted to delete it right away.
But not so fast. Some websites, often called cash-back shopping sites, are the real deal.
You get rewarded for shopping
Cash-back websites combine spending money with earning money. These shopping portals return to members a percentage of what they spend on qualifying purchases.
Karen Lenz of Texas has been a member of cash-back website Ebates since 2006.
“I love to save money,” says Lenz, a self-described deal hunter. “I really hate to pay full price for anything.”
When shopping online, Lenz uses Ebates to click through to the merchant’s website. It’s not uncommon for her to earn about $40 back each quarter on her total purchases.
Similarly, Mikki Clagett of Florida has received up to $100 back in her quarterly payouts by shopping online and referring friends to the cash-back sites to get a sign-up bonus.
How the process works
Authentic cash-back sites are fairly straightforward. Well-known ones include Ebates.com, BeFrugal.com and ShopAtHome.com.
Users sign up for a free membership and then use the website as their personal shopping portal. Rather than going directly to a retailer’s website, you would first log in to your preferred cash-back site, click on a link that would take you to that retailer’s site, and then complete your shopping as usual.
After the cash-back site verifies your transaction, the earnings get approved. That is based on the dollar amount of your purchase and the cash-back offer at that time.
BeFrugal offers cash back at over 5,000 online retailers, according to founder and CEO John Lal. The site has more than 2 million users, he says.
The percentage of earnings varies by store. The average cash-back offer at BeFrugal is 7%, Lal says. The site also provides coupon codes.
He says sophisticated millennial shoppers are taking advantage of the site, but the real growth is in the group of consumers ages 40 and over.
“I think it’s very important for consumers to know this is sort of the next thing after coupons — the cash-back site,” Lal says. “Particularly the cash-back site that has both coupons and cash-back, because you get double the savings.”
How they do it
For example, take a site with an offer for 7% cash back at Sears. If you click on this offer link before shopping, it will take you to the Sears website to complete your purchase. On a $300 TV, you would get back $21.
Cash-back sites can add time, but Lenz says it’s worth it. “The money does come. You have to be consistent. You really have to force yourself to take one extra step in the whole shopping process,” she says.
So where does your cash come from? Cash-back websites develop relationships with retailers and get paid to refer customers. The sites then share a portion of their referral revenue with their members who shop.
“Each of these retailers, we’ve worked out commission arrangements with them,” Lal says of BeFrugal. “If one of our members shops at these retailers, the retailers pay us a commission, and we pass that on to the consumer in the form of cash back.”
What to consider before signing up
You should research any website claiming to earn you cash. Search for reviews and complaints online as well as with the Better Business Bureau. Never sign up for a cash-back site that charges you for membership.
And examine the details of the process on each site.
You may not get paid instantly — the sites generally have different payout periods and conditions. You may need to accumulate a certain dollar amount of earnings or wait for a designated period of time (weekly, monthly or quarterly) before redeeming the money.
Payouts could come in the form of gift cards, PayPal credits or checks. Some offers may have varying percentages for different items at each retailer, and may exclude purchases from particular departments. Also, you can use sites such as Cashback Monitor to compare rates at different cash-back websites.
But don’t let your cash-back membership become the reason for shopping.
“You have to be a disciplined shopper just because you can get tempted by some of the deals,” Clagett warns.
This article was written by NerdWallet and was originally published by USA Today.