How Cash Back Sites Make Money

If a website is paying you to shop somewhere, you should know where the money is coming from. There's no catch - cashback sites are funded by a long-standing model called affiliate marketing - but it's worth understanding so you know exactly what you're signing up for. Here's how it actually works, in plain English.

It's Called Affiliate Marketing

Most online stores have an "affiliate program." Anyone can sign up - cashback sites, bloggers, YouTubers, news sites - and they get a unique tracking link for the store. When someone clicks that link and buys something, the store pays the affiliate a commission, usually 1% to 30% of the sale.

Cashback sites are just affiliates that share most of that commission with you, the shopper. We'd rather give you most of our commission than spend it on advertising to find new users.

Why Stores Are Happy To Pay

From the store's perspective, affiliate commissions are cheaper than any other form of marketing. A 5% affiliate commission means they only pay when a sale actually happens - unlike Google Ads or Facebook Ads, where they pay per click whether or not anyone buys. So merchants would always rather pay an affiliate site after the sale than pay Google upfront.

Where Different Cash Back Sites Differ

The big difference between cashback sites is what percentage of the commission they share with you:

• Rakuten: Typically shares around 50-60% of the commission with users.
• TopCashback: Shares close to 100% but funds itself with bonus offers and ads.
• BeFrugal: Roughly 50-70% pass-through.
• StackWell: High pass-through cash back with a simple cash payout model.

Why You Should Care

Now that you know how it works, you also know why some sites can pay way more than others - and why a "free" site that pays you for shopping isn't too good to be true. The store is paying for the referral one way or another. You might as well be the one collecting it.