Are Cashback Schemes Worth It?

Article in today's SMH.com.au , …

source:
https://www.smh.com.au/money/saving/cashback-or-catch-why-mo…

Cashback or Catch? Why Money-back Schemes Have Their Downfalls

Here are a few things to keep in mind if you intend to use cashback services this Christmas:

Cash back, eventually: Graham Cooke, head of consumer research at Finder, says there are some “admittedly minor” downsides of using these services, namely the lengthy wait until you can actually cash in your cashback. “In some instances you can wait up to 90 days to receive your money back – so it’s not as convenient as an immediate discount,” he says. Couple this with the slow rate of attrition – as you’re only picking up a few dollars at a time – and you can be left waiting a long time for very little money.

Not such a good deal: Cooke also warns the allure of cash back can obfuscate what isn’t actually a particularly good deal in the first place. “Having a 20 per cent cashback offer at a particular store doesn’t necessarily mean that shopping there will give you the best bang for buck,” he says. “Getting $2 back when you might have saved $20 elsewhere is a false economy.” As always, it pays to shop around and consider all discounts available before you pull the trigger on a big purchase.

Privacy concerns: Cashback services, shockingly, aren’t doing this out of the goodness of their own heart. They receive commissions from merchants when sales are made through their platforms, and they also receive buckets of valuable data from people who use the services. Policy adviser at consumer advocacy group CHOICE Rafi Alam says this collection of data is something to keep in mind when you sign up for one of these services. “They collect a lot of data on your consumer behaviour, and aren’t always super transparent about how they use it,” he says. “You’re not just giving up your name and phone number, and address, but also technical data that can be used to identify you.”

Don’t overspend: Alam also warns that cashback services can sometimes mean you’ll spend more than you intended, as you can feel like you need to buy more so you can hit the minimum withdrawal amount. He likens it to the “trap” of online retailers offering free shipping once you spend over a certain amount.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Comments

  • +4

    A few things to keep in mind…

    That goes without saying

    However, if you have the best price or near it, and you combine it with say 15% cashback, it makes a big difference. That's how OzBargainers work.

    PS: Need to wait 120days, no problems, x2/3, e.g. 15% becomes 10%, still worthwhile.

    • +3

      If you saw the article, it was written in a tone of inciting fear.

      • +4

        Smh writing a piece with an agenda?

        Well I never

  • Slow news day huh

    • -1

      It's supposed to be the hottest weekend for sales

      • supposed

        hot

        Idk it was luke warm at best imo.

        • -1

          temperature or sentiment ?

        • If the sales data comes out and says "record sales" again, we should never hear another moaning sob story about cost of living crisis.
          For obvious reasons.

          • @Protractor: Cashed up boomers and mortgage-free Gen Xers living it large doesn't mean everybody else isn't doing it tough

            • -1

              @GrueHunter: aagh yes the "boomers" card. The gift that keeps giving.
              Being born at the wrong time is in no-ones control.I reckon Boomers should have just remained childless

  • +2

    It was a weird article. Only the privacy concerns are actually real concerns and, then, only if you worry about that information (I mean, your bank already has it). Does anyone decide to buy something for $50 with 10% cashback over buying the same thing for $35 and no cashback? Guess it requires you to spend 30 second googling to find if the cashback link was the cheapest; but 95% of the time you find the cheapest and then forget about cashback..

    • -1

      It was a weird article.

      Agree.
      It must have been written to sow doubt in minds,
      because it's from "certain interests".

      .

      Personally, I would prefer no cashback sites.
      I've seen Booking.com or AliExpress prices increase,
      just because I went through a 'click-tracked' site.

      • +1

        Could be other reasons unrelated to the cashback. Sites do AB testing on pricing all the time

      • It must have been written to sow doubt in minds

        Yes, because they make money from affiliates too.

  • +2

    It comes down to common sense. Check prices before buying and only buy what you need or really want. If you are getting a good price then the Cash back is garnish.

  • +1

    bought an iPhone with 10% cash back. had to wait 60 days, was definitely worth it.

  • +1

    Most of the cash backs are not worth it. Jump through 100 hoops, to get $5 in 60 days.
    Also with some CB companies bought by the banks (ANZ, Westpac) deals will go only south.

    • That 'time delay' in giving the money back,
      allows the money to sit in a pool,
      for it to be used for whatever reasons.

      Which CB companies got bought out ?

    • Most of my Cashbacks have been more than $5.

    • Cheddar by CBA was gone forever.

  • Stick to things you need, or were going to buy anyway and theres no issue. Its especially great for people buying business items or consumables they will use anyway. Can't really go wrong. I've claimed $1000 in cashbacks and I try to tell everyone who will listen to sign up!

  • I always assumed the time delay is to make sure people don't buy stuff, return or cancel and then still earn the cashback.

  • still waiting on a $150 cashback after 5 months - pending and waiting for vendor to verify claims could be 3 months after suggested date. would have only been about $50 cheaper wiht the cashback. should not have bothered.

    • +1

      I was waiting for more than 6 or 7 months for Cashback,
      and I don't even know if that came through or not.

      I opened case(s), and eventually, they found a technicality,
      ie. my Email address didn't match to what I had signed up for.

      Still, after providing the new/different Email address,
      I don't know if the Cashback has been awarded or not,
      and I didn't have the time or the attention to be diverted to this.

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