Here's an Easy Way to Save Money on Holiday Gifts This Year

We are in the thick of holiday season and perhaps hemorrhaging more money from our bank accounts than we'd like. Sure, promotions around Thanksgiving, Black Friday, Cyber Monday, and other general holiday sales can help you save money on your gift giving this season. But did you know there's another way to save even more money during the holidays and actually throughout the year? The strategy, known as cash-back shopping, can help you save additional money on top of existing sales, for most online transactions.

Cash-Back Shopping Is Easy

To benefit from cash-back shopping, all you have to do is add one simple step to your online shopping regimen. Instead of going directly to a retailer's site to purchase an item, start your journey at a cash-back portal, such as Ebates, Mr. Rebates, or FatWallet. Once there, find the store you're interested in, and click to the retail site. That small step has helped me personally save more than $1,000 over eight years. That translates to savings of between 1 to 30% off each purchase in the form of cash back. And that is on top of any existing store promotion or sale that is going on.

Alberto Grazi, 41, of Brooklyn, New York, swears by using cash-back shopping sites. "I have multiple cash-back portal accounts and always check which portal pays me the highest cash-back percentage before purchasing anything online," he says. Grazi adds that "because of cash-back shopping, I try to make the majority of my purchases online so I can take advantage of the additional savings."

Though these savings, sometimes minor, may appear insignificant, their incremental power over time is quite large.

Why Cash-Back Shopping Isn't Too Good to Be True

When most people first hear about cash-back shopping, they think it sounds too good to be true. 

Craig Cassata, the founder and president of Mr. Rebates, one of the leading cash-back portals, says "cash-back shopping is truly a win-win for any shopper, as it essentially reduces the price of any item you may be purchasing at a participating store."

Cash-back shopping is able to provide these savings because of affiliate relationships. Each cash-back portal has an affiliate relationship with all of the merchants listed on their sites. When a cash-back portal refers a paying customer to a merchant, the cash-back portal receives a commission - typically a percentage of the sale. When you receive cash back from a portal, you're essentially sharing in a portion of their referral commission. 

Cassata added, "imagine if you went to a retail store and purchased $50 of items and the cashier offered you $5 back when you went to pay for the item. No catches and no forms to fill out - just cash back in the consumer's pocket." That's how cash-back shopping works in a nutshell.


How to Start Saving Money Now

The first step to start saving money through cash-back shopping, is to sign up for one or more cash-back portals. Ebates, Mr. Rebates, and FatWallet are three of the most popular portals out there. 

However, note that not all cash-back portals are created equal. They may differ in terms of cash-back percentages, payout terms and store selection. Before committing to a cash-back portal, browse a particular portal's store selections to ensure the stores you shop at are included in its listings. Alternatively, you could sign up for multiple cash-back portals to ensure you receive cash back on nearly every transaction. 

Signing up for a portal is the easy part. The key is remembering to go through your cash-back portal of choice before each online transaction. Changing your shopping behavior may take a while, but after going through the process a couple of times and seeing your cash-back add up, you'll get hooked on the savings.

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