Top cashback websites!

This article was first sent to readers as a '360 degrees' email.

If you ever shop online, you're really missing out if you don't use one of the many methods of getting cashback as you spend. And while you probably know all about cashback credit cards, did you know they can be used when shopping on cashback websites, to claim even more free money?

How do cashback websites work?

Cashback websites put advertisement links for various retailers on their site that take you through to the retailer's website, where you can shop as you would normally.

The sites are paid a referral fee every time you spend money with a retailer. Some (or all) of the fee may be passed on to you. If you get full referral fee back, you may be charged an annual fee instead.

The money you earn is placed in a cashback account for you, and when it reaches a certain value you can opt to transfer the money to your bank account.

Some sites allow you to build up loyalty points instead which can be traded in for vouchers that can be spent like cash in certain retailers.

But above all, it's important to note that your shopping will cost you exactly the same amount of money whether you do it through a cashback site, or directly with the retailer.

Schemes

All of the schemes work in a slightly different way. Let's take a look at a few of those on offer:

Kidstart

First up is Kidstart. As I mentioned in this article, Kidstart is aimed at families. By shopping at its retailer partners you can earn up to 20% cashback which is deposited into your Kiddybank account. When you have earned £10, it can be transferred.

However, rather than send it to your own bank account, the point of Kidstart is that you can only earn money for your kids. You must therefore link to your child's savings account or Child Trust Fund (CTF). Anyone can save for your kids using Kidstart (friends, family etc) so the amount earned can build up quite quickly.

Kidstart takes a portion of the referral fees so there's no annual fee.

Giveortake.com

Like Kidstart, shopping with the retailers advertised through this website earns cashback. However, you can choose for the money earned to be sent directly to you as a cheque, or paid into your bank account. You have to earn at least £25 first.

The site passes the whole referral fee to its members, and makes money by charging a £5 annual fee (which is deducted from the first £25 you earn).

Alternatively, you can choose to donate the money earned to charity. If you choose to "give" rather than "take", you only need to earn £10 before it can be transferred and no annual fee is charged.

Quidco

Again, by shopping with one of the retailers advertised on the site will earn you cashback. Like Giveortake.com it gives its members 100% of its referral fee - and charges a £5 annual fee.

Nectar

Finally, a slightly different way to earn while spending is through Nectar estores. Instead of cash you earn nectar points when you shop through the site. Every 500 points is worth £2.50 to spend either online through the Nectar site, or in one of its participating retailers (such as Sainsbury's, Argos or Blockbuster).

Here's a comparison of the cashback that can be earned by shopping through seven popular retailers:

How much would I earn?

Spending £100 with Debenhams, for example, would earn me £4 cashback with Giveortake.com or Quidco, but just £2.50 with Kidstart (Debenhams is not a Nectar partner).

And spending the same in the Bodyshop would earn me 400 Nectar points (worth approx. £2), £5 with Kidstart, £8 with Giveortake.com and a fantastic £15 with Quidco.

So who's the best?

It's clear not only is the Nectar scheme quite inflexible (the points can only be spent with certain retailers), it's a pretty poor payer, too. But it's the only scheme that lists Amazon as a partner. So if you do a lot of shopping there it's great.

The effect of passing on 100% commission is clearly significant as Kidstart tends to trail behind the other two. However, with no annual fee to pay this can be the best option for those who wish to save for their kids and don't spend a great deal online.

The highest level of cashback you can earn from Argos is via the Kidstart site. Kidstart also offers 1% more cashback to those shopping at Mothercare than Giveortake.com does, and it is the only cashback site to boast John Lewis as one of its partners.

Both Giveortake.com and Quidco usually offer good rates of cashback. And while both companies claim to offer 100% of the referral fee to their members, there is clearly some disparity somewhere as Quidco typically offers more cashback at the same stores than Giveortake.com.

Which one should you choose?

High spender? Choose Quidco - you'll typically earn more cashback and easily cover the £5 annual fee.

Saving for your kids? If you spend a lot online, still choose Quidco. However, if you're an occasional spender, pick Kidstart to avoid the annual fee.

Charity giver? Pick Giveortake.com. You'll earn a good rate of cashback and avoid the annual fee.

High street retailers are not the only ones to advertise on these sites; you can earn cashback on anything from insurance policies, to holidays, or even by joining a dating website!

In my opinion, anyone who spends money online should consider signing up to a cashback website - there's money to be made, for free. And don't forget, if you use a cashback credit card you could earn up to 5% more cashback on top.