 | Will Martin Lewis Ruin Cashback Sites |
I’ve just been listening to money saving expert Martin Lewis on Radio 2 talking about earning money at cashback sites. No one can deny that Martin is a consumer’s champion, but is he being sensible in encouraging thousands of people to visit the likes of Kelkoo every day to earn a few pence via a cashback site? The “shopping robots” as he calls them work by the merchants paying for those clicks, but if those clicks are simply going to come from more and more people taking advantage of the fact they get paid… then surely that cannot be sustained?
Perhaps it’s good value for Kelkoo and Shopping.com to encourage cashback clicks in order to pick up users? It’ll be interesting to know if the percentage of comparison clicks via cashback reflects expected sales and leads for merchants, who after all are picking up the tab for the “free money”.
Martin also mentioned things like Credit Expert - where customers can earn £6 for free just for getting a free report. This means that people who perhaps don’t want a report, or aren’t concerned what the report is for or means, are just signing up for free money. He also mentioned a bank account promotion where for depositing just £1 cashbackers could collect £25 and then close the account.
These “loopholes” may be ideal for consumers and cashbackers, but in affiliate marketing terms it’s not good. If a new merchant sets up a promotion and ends up with just a load of people after the money and not interested in the product then this will simply end the program. Most certainly I’ve seen people heading off to gaming and gambling sites “just for the cashback” (and this is a bugbear of mine, as this is more actively encouraging gambling than a site with just a section on gambling for SEO).
No one can deny Martin has done a great service for consumers, but cashback sites need to be careful that they don’t end up losing merchants. Encouraging people to “boost your income” by clicking on comparison sites or taking advantage of loopholes is not in my opinion a good way to promote cashback services.
on November 2, 2007 at 2:50 pm Vikki wrote:
I totally agree, my Dad is an avid user of moneysavingexpert and he has made about £125 this month scamming (well, thats what I would call it) the cashback sites. I work for a gaming company we are becoming more and more sceptical of the quality of players cashback sites can provide.
It’s a shame because Martins site is really good and a lot of people depend on it. However he is contributing to the growing number of people devaluing the cashback sector… but there again this is something he’s been doing for years.
on November 2, 2007 at 4:43 pm David Fiske wrote:
Firstly, it should be down to merchants and cashback sites to monitor the quality of leads. I see a handful of commissions cancelled each year because the user ghas changed their mind or the item is out of stock. This should be the case for leads for bank accounts.
Free trials are exactly that - trials of a service. If affiliates are rewarded for a free trial signup, then it doesn’t matter whether they continue to use the service or not as the merchant would have factored that into the commission payout.
Loopholes (e.g. profiting from opening and closing a bank account) is poor management by the merchant. There should be a minimum term that the account has to be open for or a minimum balance for a minimum period before the reward is released.
Merchants should be reversing affiliate transactions where a loophole has been exploited or the quality of the lead is sub-standard and in turn the cashback site should penalise the user. If i ran a cashback site, that’s how I would do it and that’s what I would encourage the merchants to do.
As for Martin Lewis setting up a cashback site, unless it was free to use and offered 100% commission (beating MSE’s favoured Quidco), it probably wouldn’t do all that well. MoneySavingExpert is full of affiliate links so t’s probably not worth his while as he’s bound to be making a wad of cash from that anyway.
on November 2, 2007 at 6:21 pm hero wrote:
you cannot blame the customer for taking advantage of a loophole nor for an affiliate promoting it. If there’s anyone to blame, it should be the merchants who allow room for these loopholes in the first place. Ts & Cs are needed in order to avoid these nasty situations.
Vikki, I appreciate where you’re coming from, but you cannot say that you are sceptical of the quality of players from cashback sites. The quality is exactly what you allow it to be: people who have no intention of becoming regular players, they just sign up to get the cashback.
on November 2, 2007 at 7:27 pm Jesse wrote:
Personally I think that if loopholes exist some people will exploit them - all Martin is doing is informing his users where the loopholes exist. In a way it should help the merchants identify the loopholes and decide if they should be closed.
As David says, free trials are free trials - they are trials of a service. If the commission is being paid for the free trial then it should already have been factored in.
With regards to gaming merchants, I expect most people can plainly see the loophole and personally I think if gaming merchants are so worried about it then they should close the loophole by tightening their terms and conditions.
on November 6, 2007 at 12:14 pm Kaybard Blog » Blog Archive » Martin Lewis is NOT Ruining Cashback Sites! wrote:
[…] on something but over the last few days i’ve seen a few discussion that seem to suggest that Martin Lewis may ruin cashback sites. I think that this issue was arrised due to the number of radio and tv programmes that Martin has […]
on November 6, 2007 at 8:18 pm Alexander wrote:
I generally like the service that Martin Lewis offers via his site but does anyone else think that he perhaps loves himself just a little bit too much?
on November 12, 2007 at 4:18 pm marshall wrote:
I don’t think Martin done anything wrong, after all he is all along advising people saving as well as making money if possible. it’s upto the merchant to monitor and change their policy.
on November 12, 2007 at 9:40 pm Gavin wrote:
Moneysavingexpert has been an excellent impartial un-affiliated resource over the last couple of years I felt I could trust due to the site being a non profit site.
Unfortunately it seems that Martin has started down the path of affiliation i.e. (he gets paid for products / links he recommends).
All sites need some form of income and running a site the size of his obviously costs a few quid.
I’m sure his sites advice is more independent/impartial/trust worthy than the average, but it doesn’t feel the same when you click on an affiliate link to get a quote for a loan.
on May 27, 2008 at 9:51 am Alan wrote:
On the other hand, it could also be argued that cashback sites are killing the wider internet.
People often launch sites related to their experiences/knowledge in the hope that by putting a few adverts on there, and a few links to related sites, that they will make enough money for the site to pay for itself (and to perhaps make a little more, if the site is good enough). If everyone uses cashback sites, then it may not be worthwhile for people to do this any more.
I’m also growing slightly sceptical of Martin Lewis’s “impartiality” - Although I do agree he does generally suggest good solid ways for people to save money.
(e.g. Home Phone calls - Martin recommends going for Primus Talk 1, via Uswitch as the cheapest standalone phone option (and he gets a referral fee from uswitch). But a cheaper option that he doesn’t even mention anywhere is to go for Madasafish Talk - Cheaper calls, cheaper line rental… …).
I don’t know how many other examples of this exist, maybe many, maybe none…
on May 27, 2008 at 10:10 am jdmobile wrote:
I think no matter how much research you do to offer someone the “best deal” then inevitably there’s always one that gets overlooked.
Another thing to consider is that some sites play “by the rules” whilst others flaunt them. Voucher codes are a good example. As an affiliate we have access to certain codes, we can use them to promote someone… yet other sites will promote codes they’re not supposed to promote AND offer a cashback route too. That’s a double whammy on the merchant involved.
It’s all well and good “getting one over” on say Tesco, but when it’s a small business that perhaps has missed a loophole it could be quite damaging to them.
What annoys me re: 100% cashback is that no one is told what it actually means to the rest of the internet. If you visit Site X who offers you a free service and their site is based on earning from affiliate marketing, imo you should support it… by going via 100% cashback you’re often taking revenue away from a site offering you a service.
If you put that in real terms, it’s like Tesco setting up a hypermarket next door to a village store… whether Martin Lewis realises this I don’t know?
Now you could say “why not compete”? In our position we run a free service, develop tools for our users, and have a whoppingly big server bill and wages to pay… we can’t offer 100% cashback - it’s not viable for us to do or manage.
We can (and are about too) launch a normal cashback site (not offering 100%) - but competition is fierce in the sector and let’s face it, if you can get £100 off insurance vs £50 off insurance… what would you do?
I’d personally like to see Martin and other promoters of 100% cashback qualify how exactly it effects websites - because if people don’t start to realise, then good quality independent sites will fall, new sites (like in the late 90s) starting up from people in their bedrooms won’t be able to become established, and the internet will be awash with corporate based stuff.
Cashback will always exist, but support for your “favourite sites” shouldn’t be overlooked.