Saving money is a task which we often consider at the end of the year but wise are those people who consider this from the beginning of the year. I happen to be one of those wise people 😉

save money

 So, I was brainstorming for saving more money this New Year. While I analyzed my spending habits, I realized how I was getting addicted to online shopping. Also, I noted how programs like cash back reward programs and cash back sites help us in saving money.

Way #1 Save Money Using Cash Back Sites & Reward Programs

How many times did you try to ignore those seemingly useless perks like 5% cash back on credit card, discount coupon etc? I have done that a lot many times. By late 2014, I realized how those “small” amounts of discount/money I get, makes a huge difference. If you take the pain of noting down each of the penny you spend on shopping, you would realize how even a 5% can return you huge sum of money.

But our curious souls do find it fishy that a company is trying to give back a part of the money we spent. Don’t they? Let’s talk about cash back on credit cards. What do banks get out of it? In clear cut words, more customers and more use of their services. When banks promise you cash back on using their credit card, they actually try to allure you to spend more money using the credit cards. They make the profits by charging some amount of money through merchants who sell. And I don’t think there’s something bad in it for you do get extra money. Don’t you?

What about cash back sites like CashKaro? How do they make money? India is now literally shopping online. Instead of buying books or clothes from a branded shop two miles away, we prefer to enjoy the comforts of our house while shopping. Now, when you use a cash back site like above mentioned, you get back a part of the money spent by you. But why do they give back money to you? What do they make out of it?

Cash back sites earn commissions from the sites you use for online shopping. For example, say you need to buy a DSLR from Flipkart. Now, instead of going to Flipkart directly, you would obviously look for coupons. That’s step 1 to save some money. The step 2 is not that popular in India yet. Step 2 is you would go to a cash back site and purchase the DSLR from Flipkart using their platform. Why? Because they promise you cash back. Say, they have promised you cash back of 1% on your digital purchases from Flipkart. That would mean that you would get Rs. 300 back if you purchase a DSLR of Rs. 30,000. Sounds a good deal. Isn’t it?

Now, this still looks a small amount of money paid to bear the pain of going to some other site and look for cash back deals. Doesn’t it? But imagine! How much you can save in the entire year? You would obviously shop for more products and save while doing that. Isn’t that amazing?

What’s the difference between discount and cash back?

One question that often confuses us is – what’s the difference between discount and cash back. The clear cut difference is discount is when you have to pay the less money than the MRP. Cash back is when you pay the MRP and then get back a small percentage of that money after a certain period of time.

Does cash back give you same benefit as discount? Nope. It doesn’t. For cash back forces you to stick to one site/seller. That doesn’t create any issue if you already prefer buying from one place. For example, I always buy books from Flipkart. So, cash back seems good to me. That might not be the case with you.

You need to analyze what works for you. But at the same time, you must not ignore cash back sites or reward programs. Even a small amount of money saved is good.

Way #2 By using coupons

Looks like I went into too much detail about Cash back sites & Reward shopping. That’s because I have already discussed the next big way to save money online. Here:  10 Reasons why you must use coupons for online shopping.

I wrote this article one month back where I talked of how coupons help us to save money. Do give it a read.

Let me know what you think about such reward programs and coupon programs. Do they really help to save money? Or do you disagree with whatever I said in this post? I would be waiting to hear from you.

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