Monday, 28 January 2013

Cashback Sites - Do They Work?

TopCashBack screen grab - will I ever get my £80.80 Cashback from Aviva?

You've probably landed here because you're wondering whether shopping via online cashback sites works? Or because you bought Aviva home insurance via a cashback site and you never received any cashback.

So here is the question - Cashback Sites - Do They Work?

 Firstly, how do they work? When I tell people about shopping online and earning cashback they usually seem mystified, and look at me as if that sounds like 'way too much bother'.

In the last 3 years I have received over £700 from 2 of the leading cashback sites - TopCashBack and Quidco and I'm waiting for another £237 (you have to be very patient cashback can take months to arrive).

So yes for me, it is worth the bother, but cashback is never guaranteed. You should never buy something because you may get cashback. All my purchases and transactions are for things I was going to buy anyway.

Cashback companies make their money, and pay you some of their commission, via merchant referral fees. In other words they negotiate with companies who want more customers to set up attractive offers which they both hope you'll buy. Often these will be a deal on a TV subscription, mobile contract or spending money with a particular retailer. Cashback of over £100 is possible on a big purchase like a subscription with Sky.

All you do is create an account at one of the cashback companies (I use Topcashback and Quidco - as the cashback rates vary) then search for the retailer you are looking for, and click through to that retailer via the special link. Your visit is recorded, and when you make a purchase it 'tracks' and if you're lucky eventually your account is credited with the cashback.

The bit where people glaze over is when I explain the important bit is the tracking. To be sure the retailer doesn't recognise you from a previous visit (and decide you weren't referred by the cashback site) it's safest to delete any cookies that retailer has planted on your computer. You don't have to delete all your cookies, just theirs. It may not be necessary, but it's a wise precaution.

So it's this easy:
  • Log into your cashback account.
  • Find the retailer or service provider you are planning to buy from (check which cashback site is offering the best rate) 
  • Click through and make your purchase.

This article is linked to Aviva Home Insurance, because that's what I bought today. Two weeks ago I trawled all the comparison websites (, comparethemarket, moneysupermarket, Gocompare etc) and discovered the cheapest quote with a leading insurer would be around £230. I also checked Aviva because they don't appear on any comparison websites. 

Today I noticed Topcashback was offering £80.80 for a new policy taken out with Aviva for home buildings and contents (with 5 years no claims). Quidco was offering £40. So I cleared all my Aviva cookies, logged into Topcashback and generated a new quote with Aviva. The photo at the top of the page is the screen that appeared when I clicked through to Aviva.

Notice the message says 'You could get Topcashback cashback when you purchase a combined buildings and contents policy online'. 

Before I clicked through to Aviva I read the reviews from previous purchasers on both Quidco and Topcashback. From the reviews I read (37 reviews) about 7 Quidco users had received any cashback and most had to wait 7 months. People who had waited longer had given up any hope of seeing a penny back.

TopCashback users look like they had more luck 99.6% satisfaction! There are a lot more reviews (at least 12 pages with 20 or so reviews per page) However I've no idea how TopCashBack have arrived at it's 99.6% satisfaction figure, because there are a lot of unhappy customers - the majority of whom never got their cashbback.

It should be pointed out users are more likely to post negative experiences. I've received cashback from American Express, O2 and Expedia - over £400 in all but I have never felt the need to post a review. When I had a bad experience with Atlantic energy I made sure to warn people it was unlikely to pay out.

I'm sure Topcashback will say thousands of people have received cashback from buying insurance from Aviva through them. They even state their figure of 99.6% satisfaction with the merchant is 'based on over 10,000 transactions'.

I was planning to buy my insurance from Aviva anyway, so if in 4 months time the £80.80 pays out it'll be a bonus. There are plenty of warnings in the terms and conditions from Topcashback for Aviva; must be a new policy (no renewals) not a previously 'saved' quote and so on. Intriguingly they also warn about 'fraudulent transactions' and 'do not contact Aviva about cashback' yadda, yadda, yadda and yet more reasons you may not get any cashback.

So Cashback sites - Do they work? Yes, they do work, and with both Quidco and Topcashback currently advertising (Quidco on posters, Topcashback on TV) presumably more people will start using them. Its a sign of how desperate retailers are to reach out to and encourage would be buyers to commit to a purchase. Even the lure of 5% cashback on a TV may encourage you to choose Currys over Argos or John Lewis.

These cashback sites are already experimenting with mobile aps so you can receive a special loyalty discount when you enter the store. Another company Foursquare offers American Express card holders money back when they shop in House of Fraser or Harvey Nichols (as much as £25 back on a £50 spend) simply by taking your registered smartphone into the store. Santander has even launched a cashback current account. Of course people who don't use cashback must be paying more to make up for all the discounts cashback users are getting. Cashback is never really 'free'.

Cashback is turning into the retail drug of the decade.

Tips for using cashback sites:
  • Never make a purchase simply because of the promise of cashback.
  • Quidco take your first £5 cashback every year. Topcashback is free.
  • Don't leave cash in your account - always have it paid to you right away - there is no protection if a cashback site goes bust.
  • Do log into your account every 6 months to avoid automatic closure.
  • If a purchase is 'declined' lodge an appeal. I've received over £200 by doing this.

Footnote - Shortly afterwards I received an email from Topcashback confirming my purchase. My TCB online account shows the transaction cashback of £80.80 and estimated payment speed based on previous transactions will be 21 weeks. So it'll be the middle of June 2013 before I can expect to see any cashback. I'll update if it works.

Update 2 May 2013 - The £80.80 from Aviva showed as payable in my Topcashback account today - just 12 weeks after the purchase. I've just requested a bacs payment which usually come through very quickly. Since writing this article I have numerous other small successful credits to my account. My payout total is £683.47 with a further £41.17 pending.

Thursday, 24 January 2013

Ombudsman Orders O2 to Pay Up

Ombudsman orders O2 to pay up - and say sorry

But why did O2 spend an extra £450 to try and save £10?

Back in October I wrote about the problems my partner had leaving O2 Broadband (story here). O2 helped themselves to £40 from her bank account to cover cancellation charges - even though they said no cancellation charges were payable.

When I tried to get O2 to refund the money and pay £25 compensation they claimed they'd already repaid the £40 and wouldn't budge from their derisory offer of a £15 goodwill gesture for all the problems. 

In fact O2 hadn't refunded the money, and insisted we provide bank statements to prove we weren't lying. That was the final straw, so I took the case to the Ombudsman.

I mistakenly thought Ofcom were responsible for investigating broadband complaints, but I discovered the role has been outsourced to companies like Ombudsman Services who O2 subscribe to. That means O2 has to pay Ombudsman Services to resolve complaints when O2 fail to reach agreement with their customer. 

The Ombudsman charges the provider a case fee to 'encourage them to resolve complaints themselves'.

As O2 had failed to refund the £40 and refused to pay £25 for the numerous attempts we'd made to sort the problem out, I decided to increase the compensation request to 'a sum equal to the case fee O2 would incur for failing to resolve the complaint themselves'.

The administrator I spoke to nearly choked when I said this was what I wanted from O2, and told me there was no way that would be possible. 'Why?' I asked. 'Because of the level of the case fee' she replied. 'Is it a lot of money then?' I said. 'It's about £450...' then she went a bit quiet, probably realising what she'd just said.

So I wrote on the form I wanted '£50 or a sum equal to the case fee, whichever is greater'. I didn't want the Ombudsman to dismiss the case, as O2 had already admitted fault. 

I was mystified as to why O2 would incur a charge of £450 from the Ombudsman over their refusal to raise their offer of compensation from £15 to £25.  

Yesterday Ombudsman Services sent through their Final Decision. Unsurprisingly they ruled that O2 must:
  • Refund the £40.
  •  Provide a written apology for any shortfalls in customer service.
  •  Provide a payment of £50 as a gesture of goodwill in recognition of any inconvenience caused during the dispute.    

 O2 admitted back in October they shouldn't have taken the £40. I asked the Ombudsman why on earth they would be so stupid as to incur a fee of £450 when they had already told the customer they had made a mistake? 

The Ombudsman told me that sometimes the telecom companies refer their complaints when they think the customer's claim for compensation is unjustified - in the hope the Ombudsman will agree. 

It doesn't make any business sense does it? 
Pay the Ombudsman £450 in the hope he'll agree you don't have to pay £25  compensation- even though you've already offered £15.

Perhaps an alternative explanation is that the telecom company hopes its disgruntled customers won't bother to make a formal complaint. 

This may very well be true. How many O2 customers do you think complained to Ofcom when O2's mobile service crashed last summer leaving millions of customers with no signal? The answer? Just 10 customers complained to the regulator.

We haven't received the letter of apology yet, or the £50. But O2 has refunded the £40.

After a promsiing start O2 remains a tiny player in the UK broadband market with just 600,000 customers. Make that 1 fewer.