How to Earn Rewards Shopping Online

Shop around for the best deals -- and the best rewards.
Shop around for the best deals -- and the best rewards.
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In the olden days, "cash on the barrelhead" meant a direct exchange of money for goods. A transaction was immediate and pretty straightforward. There were no pesky credit card bills, no coupons, no points, and no strange or complicated discount programs to decipher and track. A penny candy cost a penny (yes, candy was pretty cheap once upon a time).

Fast forward a handful of decades and most American consumers now expect a little wrangling and a few creative discounts and perks along with their purchases. From sites that specialize in scouring the Internet for coupons to large retailers that sponsor clubs where you can qualify for rewards based on how much, how often or what you purchase, online rewards programs are basically loyalty programs. They're designed to save shoppers money for frequenting a particular merchant or structuring their purchases in a specific manner.

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Rewards are available through online retailers in a couple of different ways that we'll refer to as direct and indirect programs. Direct programs exist on a retailer's Web site and may take the form of accruing points or airline miles when you use a credit card, refer a friend or buy items within a specific category. You may also qualify for rewards if your purchases exceed a certain dollar amount within a prescribed period of time, or within a specific category like winter sweaters or electronics. Rewards payouts can be modest, like qualifying for free freight on your purchase. They can also include merchandise, coupons or gift cards. This may sound familiar because online rewards strategies aren't that different from the preferred customer rewards you're used to receiving at your local market or department store.

Shoppers can also qualify for rewards in a way that's unique to the Internet. We'll call these indirect rewards. Here's how they works: Specialized sites like Ebates are collectively referred to as rebate sites. They receive revenue from online retailers for directing customers their way. Think of rebate sites as portals to online vendors. When you use the portal to visit a retailer, the rebate site gets a commission. To thank you for using the portal, the rebate site shares the revenue from the merchant with you.

Since rebate sites represent hundreds of merchants, it's easy to find vendors you trust and click through to them. You can make a few extra dollars on your purchases just by changing the starting point of your search. When you buy an item, your purchases are automatically logged, and you're on your way to extra savings.

Rewards sites can pay in points, cash (paid via a vehicle like PayPal) gift cards or other perks and promotions. Consumers can even earn revenue without actually buying anything. Sites like Swagbucks.com and QuickRewards.net pay visitors to take surveys, sign up for special offers or watch marketing videos. The nature of the compensation a shopper receives will vary from site to site.

This is an extra layer added to the online shopping experience, but once you get into the habit of checking out your favorite rewards sites before you shop, you can save money while still buying from the familiar companies you know and trust. The whole thing is pretty slick, seamless and hassle free.

If you think this bold, new world of online shopping and saving is just right for you, we'll offer up a few savvy tips on the next page.

Tips for Earning Online Shopping Rewards

Rewards programs repay loyalty with additional savings. To be eligible, you often have to buy more in order to save more. This sounds easy, and it can be, but you won't always find the best deal on all the goods you want -- even goods within a specific category -- in one place. Like grocery shopping, you're likely to find great bargains on a few different items distributed among the major retailers.

In a brick and mortar shop, obvious deals are designed to attract shoppers who will stick around to shop for other items they need which provide a better profit for the merchant. Because Internet shopping is less labor intensive than hopping in the car and driving all over town, it's much easier to suss out good bargains wherever they're hiding. Comparison shopping engines like PriceGrabber are dedicated to showing you the location of the most competitive bargains.

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To keep you on their sites, or convince you that coming back regularly is a good idea, online merchants have to do more than lure you in with one or two great deals. Shopping rewards are an effective marketing strategy because they encourage shoppers to accumulate purchases to reach different plateaus that will provide better discounts (or other goodies). This keeps people coming back or encourages them to buy more during a single visit.

How to Get the Most From Your Online Rewards

Before you put your cash on the virtual barrelhead, though, there are a few things you should consider:

  • Make direct comparisons -- Rewards sites can be confusing because some offer points while others offer cash. Taking the time to convert points to their cash equivalents is the best way to make a fair and accurate comparison between competing sites.
  • Review shipping and handling charges -- Sometimes what seem like the best deals are offset by unexpected, and unexpectedly high, charges. Before you decide to make a purchase on any site, be sure you understand exactly what the transaction entails. A low selling price with bonus rewards may not make up for high shipping and other charges.
  • Don't lose sight of the whole -- It pays to evaluate a purchase carefully. A $50 minimum purchase may earn you free freight, but you might also be able to use a coupon with that purchase, buy through a rewards site for an additional rebate and use the sites credit or membership card to earn extra points. These days, buying bargain products may involve combining a number of strategies. To do this effectively, understand what you can combine by reading the fine print on any promotion carefully, and make sure you have your plan of attack plotted out before you begin a transaction.
  • Bulk up your buying power -- Although it's a good idea to investigate the best bargains for a particular item, doing business with a few preferred sites is likely to net you the best overall savings. It also has the advantage of keeping your personal information in a limited number of online locations.
  • It doesn't hurt to sign up -- Signing up for membership on a number of rewards sites, and joining the mailing lists of a few e-tailers you like is a good strategy if you don't have to give away too much personal information. Sometimes just signing up for a site's newsletter by providing an e-mail address can earn you extra points you can exchange for discounts if you buy something later. It never hurts to stay informed. If you hate the idea of all that junk e-mail, setup a separate e-mail account for retail and rewards links. You can check for bargains occasionally without flooding your main e-mail address with notifications that don't interest you.
  • Watch the calendar -- Online stores and rewards sites periodically offer special promotions, especially around major holidays. If you can group your purchases around these bargain friendly dates, you can sometimes double your rewards and save quite a bit. If you aren't making an emergency purchase, this may be easier to do than you think. Many sites let you set up a wish list for the items you're interested in. Some will even notify you when your wish list items go on sale.

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