What on Earth is cashback? Is it free money?

ChancellorOfAndromeda

And, let's be clear, I don't mean "cashback" in the sense of store transactions because that's just withdrawing money at the store, like you would at the cash machine.

No, in my case, it seems I've just gotten free money.

Basically, upon signing up for something at my uni (accom), I was told that I would get £100 cashback.

OK, I didn't really understand what it was at the time, as I didn't actually have to pay anything to the uni at the time of signing up.

And yet, this morning, I see that there's £100 deposited into my account from my uni - !!!!!!??? :eek:

So, have they or have they not just given me free cash? (It shows £100 more available than last night!) :j

What is going on here? Free money? Where's the catch? Is it a "bonus"?

Icey370

It just gives you money back from your purchase(s)

Like a cashback credit card, if you have 1% cashback on purchases, youl get £1 for every £100

In your case I'm guessing its a 'reward' for signing with them over another

ChancellorOfAndromeda

Icey370 wrote: »

It just gives you money back from your purchase(s)

Like a cashback credit card, if you have 1% cashback on purchases, youl get £1 for every £100

In your case I'm guessing its a 'reward' for signing with them over another

Yep, certainly seems to be a "reward" - but £100 seems quite a lot! There just had to be a catch, because it was £100!

Wyndham

They will have given you cashback as a 'thank you' for signing up for their accommodation rather than going to a private landlord. It will be legitimate, but I assume you did shop round before you signed to check prices for accommodation in general?

pqrdef

A while ago there was a fashion for doing cashback with new cars and even new houses. Basically it was a way of getting some liquid cash by adding a bit more to the loan or mortgage, without the hassle of having to borrow it separately.

grumbler

Usually cashback is paid by companies charging excessive fees/charges for something (especially for long-term contacts):

• Credit card providers (high fees for merchants for transactions)
• Mobile phone companies (overpriced mobile contracts)
• Utility providers (via cashback sites)
• ....
• University accomodation?

They do this to attract new customers that they hope will make them loads of money in the long run.

ChiefGrasscutter

The really interesting point is that if you increase the cash incentive enough then at some point it is no longer regarded as an incentive to attract new customers but a bribe to pervert the fair course of business - which of course is illegal.