The National Retail Foundation says that the average U.S. consumer plans to spend $832.36 on holiday-related expenses this year, up 1.9% from last year. A Forrester Research report released last week says that online spending, however, is expected to increase by 12% this holiday season compared to last year.
In other words, people will be spending a greater proportion of their limited holiday budget online this year.
And they would be wise to do so: October isn’t over yet but we’re seeing deep discounts already, with free shipping offers and coupon codes and exclusive email-subscriber-only sales right and left. That’s not even including the tax savings from buying from some online retailers, or the gas money saved by not chasing down out-of-stock items all over town…or the cash back available from online rewards programs.
But all rewards programs are not created equal. In fact, there are significant differences among the programs. Some rewards programs hide their shopping rebates by paying “points per dollar spent.” Many consumers don’t have the time or the know-how to convert those mysterious points into real, cash back percentages.
Every year, CompareRewards.com prepares an extensive analysis of cashback rates available at a variety of popular online retailers. Points are converted into rebate percentages to better enable consumers to compare rebate rates between programs. This year’s analysis includes 19 rewards programs and 225 online stores and it found amazing variances among the programs: Cash back rates for the same merchant vary by as much as 27.4%, so knowing which rewards programs to use in order to maximize your reward is imperative.
Which rewards programs outshine the others this year? Which programs should you avoid? Click “Continue Reading” to find out!
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Before you go to the chart, please take a moment to read the following important notes:
1. Points are converted to percentages using the value of the best $25 gift card redemption. If you typically redeem points for a lower redemption, your rates may calculate out to be lower; if you redeem for higher values, your rates may be higher. I’d be happy to answer questions about how the calculations are made by email.
2. All data was compiled during the third week of October 2008 using each program’s regular, non-promotional rates. Rewards programs frequently change their rates, and while I make all efforts to provide accurate information, errors do sometimes occur; you should confirm your reward program’s current rate before making a purchase.
3. Please see each rewards program for exclusions and other details. Be sure to read the footnotes on the chart for additional information on how the data was compiled.
Rewards Programs Included in This Year’s Analysis:
The programs included this year are (click each program’s name for my review of the program): BondRewards, CreationsRewards.net, Ebates, Extrabux, FatWallet, Freeride, Greenpoints, iBakeSale, (Microsoft) Live Search cashback (formerly Jellyfish.com), Memolink, MrRebates, MyPoints, QuickRewards.net, QuizPoints, RewardShopping (aka LuckySearch), (BestBuy) RewardZone Mall, Sunshine Rewards, (Citibank) ThankYou Points, and Upromise. Removed from last year’s analysis were those programs with an Alexa traffic ranking below 1 million, as well as several sites that shut down.
Notes on the Color-Coding of the Chart:
As you read across the chart, rates highlighted in green are those that are the best for that merchant; those in red are the lowest. There are a few rates in yellow — these are generally offers for one flat cashback amount per purchase, so your actual percentage rebate would be higher if you made a small purchase, or lower for bigger purchases. Depending on the size of your purchase, yellows could be very good rates or very poor.
Scanning up and down the chart will show you which rewards programs have the most “greens” and which have the most “reds.” If you want to pick only one or two rewards programs to shop through, you’ll want to avoid those sites with a lot of “reds” and look for those with a fair number of “greens.”
Because the ThankYou Points program is only available to certain Citibank account holders, in cases where ThankYou Points offered the best rebate, the second-highest rebate was also highlighted in green.
See the 2008 Shopping Rebate Rate Comparison Chart here and then come back for the summary and analysis.
HIGHLIGHTS AND SUMMARY
The Top Five Rewards Programs With the Highest Shopping Rebates
This was an exciting year as it appeared that almost everyone took steps to improve their cashback rates. Here are the top five websites, ranked by the percentage of stores with the highest shopping reward:
1. Live Search cashback (Microsoft). Although Live Search cashback offers rewards at “100s of stores,” The Program Formerly Known as Jellyfish only offers cash back for shopping at 54 of the 225 popular merchants in my analysis. That’s the bad news. The good news? Of those 54, Live Search cashback offers the highest rebate for 39 of them — that’s 72%! 9 times they came in second, too. That works out to an astounding 89% of the time that you’d get the best or second-best cashback rate by shopping through Live Search cashback. Now, if only they would add more big-name retailers…
2. ThankYou Points (Citibank). This was my first time to include this program in my chart, though it’s been around quite a while, and it scored very, very high: 42% of the time (for 70 of the 167 merchants in my chart), ThankYou Points offered the highest cash back (assuming the purchase was made with a Citi card, so it would receive double points.) The drawback to this program is that it is only available to Citibank checking or credit card customers with eligible accounts. If you can use this program, though, by all means, you should. Remember to pay off your credit card monthly or else the interest you pay will offset your cashback.
3. Extrabux.(aff) With high cash back rates plus coupon codes for a large list of participating merchants, Extrabux is an overall outstanding rewards program. They reward for shopping at over 775 stores total, and of the 135 I analyzed, they offered the highest cashback rate for 53 stores (39%). For an additional 27 merchants, they had the second-highest cashback rate. So in total, 59% of the time Extrabux pays the highest or second-highest cashback available. That’s amazing, folks.
4. MrRebates.(aff) With over 1000 merchants, MrRebates rewarded for more of the merchants on my chart than any other rewards program. Of the 220 they reward for, they offered the highest rebate for 62 (28%). They provide coupon codes, too.
5. FatWallet. Offering cash back for 187 of the merchants on my chart, FatWallet offered the highest cashback rate for 47 (25%). Last year that would’ve landed them third place, but this year, everyone stepped up their game. Fifth place still isn’t shabby…plus FW has the ultimate deal forum, too.
The Worst Programs for Shopping Rebates
I don’t like focusing on the negative, but you do need to know which programs are scraping the bottom of the barrel. In their defense, unlike the top 5, all of these programs do offer you ways to earn besides just shopping. I guess that’s the trade-off for getting poor rebates. Once again this year, all of the bottom 5 are points-based programs. Coincidence? I think not.
1. MyPoints. For the third year in a row, MyPoints offers the worst shopping rewards once you convert their points per dollar into percentage rebates. They offered the lowest rate out of 19 rewards programs surveyed, for 98 of the 166 merchants on my chart (59% of their merchants). Another 11 times their rate was “yellow,” meaning it could be the worst but it depended on your order total. Assuming the worst, that’d make MyPoints the lowest 66% of the time. Ouch.
2. Freeride. MyPoints should really thank Freeride, because it would’ve scored even worse were it not for Freeride! With the lowest rate for 39 of their participating 99 merchants, Freeride scored dead last 39% of the time. That’s taking you for a ride, alright!
3. Greenpoints. Somehow surviving the bankruptcy of its latest owner, the online version of the S&H Green Stamps program is in the bottom five again this year. One can only hope that the reason it wasn’t shut down in the bankruptcy is because there’s an intention to revive the program somehow. Right now it’s offering the lowest rates for 9 of the 66 merchants it rewards for that are included in my analysis (14%).
4. Memolink. Their rates aren’t really BAD, they’re more like just low-average. It’s not like me to offer anything in Memolink’s defense, but I do think in all fairness that if you look at the merchants where Memolink had the lowest rates (23 of 206, or 11%), they’re mostly merchants where all rewards programs offered roughly the same rate but Memolink just happened to be slightly lower.
5. BondRewards. This is the big shocker for me this year — after two years of offering far and away the highest rebates of any of the programs I analyzed, this year BondRewards hit the bottom five. I was so surprised at this that I emailed my contact there to be certain I hadn’t miscalculated somehow. But sure enough, they had the lowest rates for 15 of the 156 merchants on my chart (10%).
If you’re only using coupon codes when you shop online, you’re missing out. When rewards programs are offering cash back that by itself is pretty substantial, and some rewards programs provide coupon codes that can be combined with their cash back, using coupon codes without rewards programs is ignoring a substantial part of the equation. Sure, 15% off your order is great, but how about 15% off plus 10% cash back? Even better!
Points programs subsidize their free points by offering lower shopping rewards. If you’re content to slowly progress toward a gift card from MyPoints by reading 5 point emails, it is possible to cash out without spending a dime — but realize that the cost of this is that overall you won’t earn nearly as much from shopping there as you would anywhere else.
Taking the time to do a little checking before you shop online can make a huge difference in what you earn in cash back. There’s a huge difference in what different rewards programs pay for shopping at the same merchant — as much as 27%! So do some legwork before you make a major purchase to be sure you’re maximizing your rebate. Don’t have time for all the legwork? Stick with one of the top 5 programs mentioned here and you’ll be fairly certain to not just receive a good rate, but one of the best.
You can get your reward a lot faster if you’re willing to sacrifice a little cash back. Two of the rewards programs in the analysis waive the “return period” (the period of time in which the item you bought can still be returned to the store for credit — most rewards programs require you to wait through the return period, often as long as 60 days, to be certain you don’t get paid your rebate and then return your purchase). QuickRewards.net and RewardShopping.com (aff) both allow you to earn shopping rewards and then request your earnings within a week or so, but their rates are in the “average” range. Still, sacrificing a percent or two to get your cashback within a week may be a worthwhile tradeoff for some people.
Any shopping reward is better than no shopping reward. It may take a few extra clicks to get to your desired retailer through a rewards program, but even at the poorest rewards programs for shopping, at least you’re getting something back — versus going directly to the merchant’s website and getting nothing.
I look forward to your comments and will happily answer any questions you may have. The spreadsheet containing the underlying data is available for purchase; please email for details if you’re interested. A huge thanks goes out to Ginger of AttentionTargetShoppers.com and AdLibCorner.com for her valued assistance in completing the chart this year. Thank you for reading, and if you found this post worthwhile, please Digg it, StumbleUpon it, or forward the link to a friend.