Is Cashback Free Money?
Posted by Liam on 31 July 2025.
“Is cashback free money?” is one of the most common questions we hear about cashback. The short answer is not exactly, but using cashback services does help you save more over the long term.
The most common methods people use to earn cashback are websites and apps like Widilo, and through rewards credit cards from banks. We’ve outlined the key differences between the two here, but the way cashback is accrued also differs drastically.
Here’s how cashback works for you
We’ve discussed how cashback works at great length in this article , but if you haven’t read it or would like a refresher, we’ll go through the basics here.
When you use a cashback website or app like Widilo to shop online, you get a percentage of the money you spend back and into your money pot. Once that cashback transaction has been validated, it gets added to your overall total. Then, when your savings are large enough, you can withdraw it all to your bank account.
Not every online store offers cashback, and different ones have different percentage rates. You can see which ones have which by searching for them on Widilo.
You may have also heard of cashback rewards credit cards, but these provide it in a different way. Just like the websites and apps described above, rewards cards give you a little bit back with every purchase. However, in this case, you’ll usually get your cashback reward deposited automatically on a monthly or annual basis, depending on the card.
Where does the cashback money come from?
Cashback is a great way to maximise your savings, but the money doesn’t appear from thin air. When it comes to cashback apps and websites, such as Widilo, cashback is earned through the transactions you make when shopping online. When you go to a retailer through a link on our website and make a purchase, they share a percentage of the total with Widilo in the form of a commission. You still pay exactly the same price that you would if you hadn’t gone through Widilo, but that percentage acts as a small thank-you to us for sending you through.
Your cashback reward comes from that percentage and is transferred back to you via your Widilo money pot. So without needing to spend any more on a purchase you’d make anyway, you get to enjoy a share in the transaction for yourself.
Where does the cashback from rewards credit cards come from?
Credit card reward cashback is quite different. There are a few types of rewards cards you can choose from, and cashback is just one of many. The intent behind these is to encourage you to use that card over any other payment methods you might have. Your card company gets a small payment out of every use, so it’s a great way to encourage you to make the most of the card.
Whenever talking about rewards cards, it’s always worth acknowledging that there are some risks attached to them. You have to make sure you pay them back at the end of each month to ensure you get the full benefits.
Are there any drawbacks to cashback?
As we outlined in the last paragraph, cashback rewards credit cards do have some risk involved. If you want to use one, it’s recommended you research which is right for you and commit to paying it off every month. On top of that, they’re only accessible to people with a high enough credit rating, so not everyone gets to enjoy the benefits.
Apps and websites like Widilo don’t have the same risks and are much more easily accessible to everybody. Depending on the retailer, cashback transactions can sometimes take a while to validate, but even then, we’re committed to speeding up the process as much as possible for our service.
Another thing to consider is that different online shops have different rates, and the amount of cashback you’ll get will always only be as large as the purchase you make. So for smaller orders, it can take a while to build up a significant amount for your money pot, but of course, every little bit will go a long way!
Here are some of our favourite ways to make the most of your cashback:
Holidays - Holidays can be one of the biggest purchases you make all at once, and so activating cashback for a travel company like easyJet Holidays can earn you tons of cashback at once.
Tech - The same goes for electronics, whether you’re upgrading your smartphone or looking to buy a new TV. A retailer like Very is a perfect candidate for big cashback.
Everyday spending - Purchases like your weekly groceries are something you do on a regular basis, so activating cashback every time you shop with, for example, ASDA can quickly add up to a larger total.
If you haven’t already signed up with Widilo so you can start earning cashback, then you can do it quickly and easily right here. Plus, you’ll unlock a sign-on bonus to get your money-pot savings started up right away.
Read about the best ways to get cashback here.