What is cash back, and how does it actually work?

If you have never used a cash back site before, the idea can sound a little too good to be true: click a link, shop like normal, and get real money back later. Here is exactly how it works, and why stores are willing to pay for it.

The basic idea

When you shop online, most stores pay a small commission to whoever sent them the customer, usually a percentage of what you spend. This is called affiliate marketing, and it has existed since the early days of the internet. Cash back sites like Rakuten, TopCashback, and BeFrugal simply pass most of that commission back to you instead of keeping it all.

Step by step

1. You search a store on a cash back platform (or on Savvli, to compare several at once).
2. You click through to the store using that platform's tracked link, which tells the store which platform sent you.
3. You shop normally, same prices, same checkout, nothing different on your end.
4. The store pays the platform a commission after your purchase is confirmed (not immediately, since returns and cancellations have to be accounted for first).
5. The platform pays you your share of that commission, usually as cash via PayPal or check, sometimes as gift cards or points.

Why stores actually want this

From a store's perspective, this is a marketing cost, similar to buying an ad. Except unlike an ad, they only pay when a sale actually happens. It is performance marketing, and it works well enough that thousands of retailers participate in it deliberately.

Why the rate is not always the same

Different platforms negotiate different commission deals with the same store, and each platform decides how much of that commission to pass along to you. That is the entire reason a comparison tool like Savvli is useful: the same store can pay very differently depending on which platform you go through.

What it costs you

Nothing, directly. You do not pay to use these platforms, and the price you pay at checkout does not change. The commission comes out of the store's marketing budget, not your wallet. If you are wondering whether there is a hidden catch, our page on cash back safety covers that honestly.