the richest man in atherstone

In February, I stumbled across a website that offered incentives to buy products and services through them in exchange for cashback. I did a little checking around and found that there are quite a few such companies offering the same service with different pricing structures (to see a pretty comprehensive list of cashback websites, check out this Cashback Website Comparison Matrix).

Here's how these cashback( CB ) websites work:

1. CB makes agreements with merchants that they will recieve a commission if they refer punters to them and they go on to purchase something.
2. Punter visits the CB website and clicks on one of the links to a merchant where they purchase something.
3. Merchant pays CB company the commission.
4. CB pays some of the commission it recieves to the punter and keeps the rest for itself.
5. The merchant has sold. The CB company has made some money. The punter has got a discount. Everybody's happy.

As I said, I looked at a number of these websites and the one that seemed to offer the best value was a cooperative called Quidco. Instead of taking a percentage of all cashback earned, they just hang on to a fiver per year (admin charge, as they call it). Also, they do not ask for money up front. They simply take £5 from the first lot of cashback you earn.

Anyway, this is a good way to get discounts on things like electrical goods, CD's, insurance etc. however this was not the reason I joined up. Looking through the merchants, I discovered that a lot of online bookies were offering more in cashback than was needed to actually earn the cashback. For example, one offer was to earn £17 of cashback for making a £10 bet! £7 of free money plus whatever I win! Also, many of these websites were offering a free £10 bet for new customers, giving me more chance of winning.

I do like to have a flutter from time to time (as my World Cup Wager Experiment shows) and wanted to discover which online gambling business best suited my needs so subsequently, over the last 10 months, I've signed up to them all and earned a fair bit of money in cashback and winnings on free bets. The table below shows the companies I signed up for, the cost, the cashback and the winnings.

Total Bookies Net Earnings: £130

So, it turned out to be a nice little earner. During my "gambling spree", my wife mentioned that she would like to do a similar thing with the Bingo websites. Some of her friends had said that they enjoyed playing Bingo online and this would be an ideal strategy for her to try out a lot of these websites to find out which one she liked the best. Here are the results:

Total Bingo Net Earnings: £304

We lucked out a bit with the double jackpot winnings from Gala but even so the exercise would still have been profitable without this 'unusual item'. Crunching the numbers I get the following results:

Total Outlay: £176 (includes £5 Quidco admin fee)
Cashback Earnings: £299
Winnings: £306
Total Net Earnings (without winnings): £123
Total Net Earnings (with winnings): £429

Conclusion
This has been a very lucrative experiment for me, however even if I hadn't won anything, I'd still have earned over £100 profit. It was enjoyable too and my wife and I spent some 'quality' time together playing Bingo.

Obviously, this only works with companies that offer more cashback than you have to deposit, or at the very least, companies that offer the same amount (as Crown Bingo and Bingo Boogie above).

Although all the money came through for me, Quidco (and all other cashback websites) do not guarantee that you will get the cashback offered. Things can go wrong with the tracking or the merchant can just be awkward about it.

Quidco isn't just for gambling. My wife got a large discount on her car insurance using the service and before I buy anything, I always see if the merchant is listed on Quidco first to get a discount.

My wife is planning on opening a Quidco account now and do the same as me and a number of friends and family have also expressed an interest. This idea has got my stamp of approval, however it is essential anyone trying it todo their own homework first and be aware of the risks.

UPDATE OCTOBER 2007: As well as Quidco, there are a number of other cashback websites of a similar theme. Click the image below to compare the main features of a multitude of cashback websites with W3WAD.COM's Cashback Website Comparison Matrix. You can also download a FREE guide which explains how to make hundreds of pounds from them.