Cashback Vs. Coupon Codes: Which Saves You More?

Posted on 04/23/2014

Are you more likely to use a cashback reward website or a coupon code when you shop online? Both seem like a great way to save money, but when you do a little digging into the numbers one seems to offer more legitimate savings for consumers.

One or the Other
Often when you shop through a cashback portal consumers think that they can shop as they normally would and will automatically receive the cash back reward. However, did you know that on many sites using a coupon code eliminates your cash back reward? Perhaps you've wondered what happened to that cash back you thought you were going to receive. If you used a coupon code the cash back may have been axed since often you must choose one or the other.

Cash Back Rewards Lead to Higher Spending
According to a 2010 study from the Federal Reserve Bank of Chicago, promises of cash back actually inspire shoppers to spend more. As reported by The Wall Street Journal, a 1% cash back reward provided a $25 reward on average for credit card holders. However, that reward generated an increase in spending of $68. That's a net loss of $43 a month.

Time is Money
One argument for cash back is that it is quick. If you know the site you want to shop you simply search your favorite portal, find the cash back offer and click through to continue shopping. However, there are many popular retailers that almost constantly offer coupon codes. That means finding one can take only seconds and the odds of inputting invalid or expired coupon codes are pretty slim.

Percentage Savings
One of the most popular cash back sites, ebates, offers an average return of 4%-12%. But a quick coupon code search is likely to cut more than that off your final bill. Even scoring free shipping could equate to a bigger savings than 4% cash back.

Combine if Possible
The best scenario is to use as many savings channels as possible. That would mean combining cash back with a coupon code to increase your discount even more. Although it may not always be possible, take a little extra time and you could end up saving a lot of extra money.

By Alison Storm

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