From The Times
June 3, 2006

By Andrew Ellson

BRITONS love shopping, but our attachment to the high street is waning. Research shows that more and more of us are turning online to exercise our spending habit. IMRG, the trade body for web retailers, says that internet spending in the UK has rocketed by 2,000 per cent in the past six years. We spent more than £50 billion online in the past 12 months.

One reason why internet shopping has become so popular is that you don’t need to traipse around several stores to find the best deal. Price comparison websites such as www.kelkoo.co.uk or www.pricerunner.co.uk will do the hard work for you. Just type in the product you want and their clever shopping robots, or “shopbots”, will scour hundreds of websites for the best price. A search for a PlayStation 2 on Kelkoo came back with prices from £86.99 to £119.99 — a potential saving of almost £35.

Another way of saving money when shopping online is to use a cashback website.

These sites reward their users by refunding a percentage of what they spend at various affiliated “e-tailers”. The size of the cashback usually varies between 1 per cent and 10 per cent. As a rule, the larger the retailer, the lower the cashback.

The cashback sites make money by either taking a cut of the cashback paid by their affiliated retailers or by charging a membership or administration fee. On all cashback sites the user must click through using the links provided so that purchases can be tracked.

The cashback often takes weeks to be credited to users’ accounts because the retailers need to be sure that the goods are not being returned.
One of the largest sites is www.greasypalm.co.uk. Its 400,000 members have been credited with cashbacks of almost £3 million since its launch in 2002. It is free to join and has deals with more than 650 online retailers. Registered users can obtain a 1 per cent cashback on purchases at www.dixons.com and 3.5 per cent at www.boots.com. The site also has special offers, including one that credits your account with £7.50 if you change energy supplier with uSwitch.

The cashback is paid monthly by cheque, but only when your account has accumulated £25 or more.

A recently launched site that could prove more rewarding for high spenders is www.mrscashback.com.

It offers better cashback rates but charges a £29.95 annual fee. Users benefit from a 2 per cent cashback at www.dixons.com, 3 per cent at www.marksandspencer.com and 6.5 per cent at www.boots.com.
 
The site also has special offers, including a £30 cashback for users who open a savings account with ING Direct. You can also download software that reminds you to log in when you visit an affiliate retailer so you never miss out on a deal. The site pays by cheque when users have accumulated more than £30, but it levies a £3 administration fee.

Two other cashback sites worth checking out are www.rpoints.com and www.quidco.com.

To ensure that you find the best deal, use a price comparison site first and then go to your cashback site to see if that deal is available with cashback. Sometimes the best price found through a price comparison website will be cheaper than prices offered with cashback.

Some cashback sites also have offers for financial products such as credit cards and loans. Always ensure that you take the most suitable deal for your circumstances, not just the one with the biggest cashback bribe.

http://www.timesonline.co.uk/tol/money/consumer_affairs/article670631.ece