What to know about cash-back shopping sites

In a world of cyberscams, any website that offers free money is met with eye-rolling and skepticism.

But not so fast. Some websites, often called cash-back shopping sites, are the real deal.

Cash-back websites combine spending money with earning money. These shopping portals return to members a percentage of what they spend on qualifying purchases.

Mikki Clagett of Florida has received up to $100 back in her quarterly payouts by shopping online and referring friends to the cash-back sites to get a sign-up bonus.

Authentic cash-back sites are fairly straightforward. Well-known ones include Ebates.com, BeFrugal.com and ShopAtHome.com.

Users sign up for a free membership and then use the website as their personal shopping portal. Rather than going directly to a retailer's website, you would first log in to your preferred cash-back site, click on a link that would take you to that retailer's site, and then complete your shopping.

After the cash-back site verifies your transaction, the earnings get approved. That is based on the dollar amount of your purchase and the cash-back offer at that time.

The percentage of earnings varies by store. The average cash-back offer at BeFrugal is 7 percent, Lal says. The site also provides coupon codes.

"I think it's very important for consumers to know this is sort of the next thing after coupons — the cash-back site," Lal said. "Particularly the cash-back site that has both coupons and cash-back, because you get double the savings."

For example, take a site with an offer for 7 percent cash back at Sears. If you click on this offer link before shopping, it will take you to the Sears website to complete your purchase. On a $300 TV, you would get back $21.

So where does your cash come from? Cash-back websites develop relationships with retailers and get paid to refer customers. The sites then share a portion of their referral revenue with their members who shop.

"If one of our members shops at these retailers, the retailers pay us a commission, and we pass that on to the consumer in the form of cash back," Lal said of BeFrugal.

And examine the details of the process on each site.

You might not get paid instantly — the sites generally have different payout periods and conditions. You might need to accumulate a certain dollar amount of earnings or wait for a designated period of time before redeeming the money. Payouts could come in the form of gift cards, PayPal credits or checks. Some offers might have varying percentages for different items at each retailer. Also, you can use sites such as Cashback Monitor to compare rates at different cash-back websites.

But don't let your cash-back membership become the reason for shopping.

"You have to be a disciplined shopper," Clagett warns, "because you can get tempted by some of the deals."