Cashback deals -- also known as chequeback deals, creditback deals, or moneyback deals -- sound like a great idea up front.
You sign up for your contract price plan and enjoy a healthy discount via rebates throughout the term of the contract.
Too good to be true right? Maybe.
Cashback deals can be a bit of a mixed bag...
Mainly because there aren't many protections for you as a buyer.
If the cashback deal turns sour, you're often left on the hook for your mobile contract and won't see any savings.
That said if you're looking for savings on your next contract, finding a solid cashback deal can pay off -- as long as you know what to look for.
In this guide, we'll tackle everything you need to know and red flags to look out for to improve your chances of success with these popular -- and often tricky -- deals.
So, How Does A Cashback Deal Typically Work?
You choose a tariff and agree to a term contract from a shop advertising "12 months free line rental."
After signing up you pay for service like any other plan and then depending on the cashback terms, you post a copy of your monthly bill to the retailer offering the deal and they give you money back.
That is, IF you follow the terms of the deal to the letter and the retailer offering the promotion is legitimate...
In most cases, you'll receive a cheque within a few weeks of your claim being received and validated.
What is Automatic Mobile Cashback?
These deals work a little differently -- and are often much safer.
But as a trade-off, you'll often see much lower discounts.
They work in a similar fashion to normal mobile cashback deals. You sign up to a pay monthly contract plan, and the mobile shop will send you a single cheque (typically 60+ days later).
In some cases, there is no need to send in claim forms via the post.
Others take a more hybrid approach offering a small lump sum automatically upfront and additional savings -- which they hope you'll forget to claim -- spread out over additional payments throughout your term.
Automatic cashback is often used as a time-limited promotion on selected deals -- typically with contracts of 18 months or more and high-end monthly fees.
Is There a Catch?
The trick to these deals is that you'll only receive some or your money back if:
a) It's not a scam to being with
b) You follow the series of hoops the mobile company wants to you jump through perfectly
Every retailer, mobile shop, or online market has "terms and conditions" for claiming cash back.
In most cases, if you fail to follow every step of their claims process, you won't receive any cash back -- and the terms are designed to make keeping your end of the agreement a pain.
Meanwhile, the company behind the deal is raking in the dough.
Popular ways mobile shops make it a hassle to get your full reimbursement include:
Multiple Claim Requirements
In most cases, you'll have to send in between 3 and 5 claims over the span of your contract. Each claim must be sent in the specified time window (EG within 20 days of the 120 days into your contract).
Keeping track of all of these dates is crucial. We recommend putting everything into your calendar app or writing down important dates as soon as you get your schedule so you don't have to worry about remembering all the details -- and possibly missing a claim -- later.
How likely are you to remember some random date like the 14 month anniversary of signing up for your deal? Life is too busy for that -- use the tools available to help you keep track and claim your money.
Missing a single claim could leave you unable to claim the rest and stuck paying for an expensive tariff for the rest of your contract.
Requiring You to Send in Specific, Original Bills
Some terms and conditions require you to send in your original bill -- no photocopies. Should your claim magically "get lost," you have no way to submit an additional claim and there go your savings.
To make matters worse, they often require a very specific set of information on each bill and a particular month's bill.
Post the wrong month? Is your bill missing some obscure information? Did your address or name change since signing for your cashback deal? What if it actually gets lost in the post?
Too bad... you won't be able to claim. Or if you can post a copy later, then it'll arrive too late to be valid anyhow.
In any case, it's recommended to post all bills by recorded delivery to help back up your claims should something go wrong.
Complicated Claim Forms
Yeah, more work for you -- and more opportunities to mess something up and hand over your savings.
Some plans will now let you submit claims digitally. However, the majority require you to sit down and fill out the forms manually.
If you can post digitally, be sure to double check everything before hitting the submit button.
Cashback Claim Codes
Some shops require you to write your cashback claim code on your mobile phone bill, verify dates of activation, or find other obscure information to include with each claim.
In other words, they make you jump through as many hoops as they can get away with and hope you miss something, giving them a chance to claim you didn't follow terms and then pocket your money.
Even if you do follow their terms precisely, it can still be difficult to get your money back.
Common scams include:
- "Lost" cheques and claim forms
- Computer system "malfunctions"
- Long delays for reimbursement
- Requiring you to phone premium numbers for customer support
It can be one big hassle... while Ofcom has tried to help improve regulations to provide more protection from dodgy cashback deals -- and you could try to take them to small claims court -- the mobile shops and online groups offering cashback deals definitely have the advantage here.
4 Tips to Help Avoid Cashback Deal Scams
1. If the deal sounds too good to be true it probably is.
In most cases, the best cashback deals require you to choose a pricey tariff, submit multiple claims, and sign up for an extended contract.
If the total cashback exceeds the overall price of the contract or they promise a substantial sum up front without requiring a hefty plan, there's a good chance you are dealing with a scam.
Use your common sense.
Have a look at the cashback deals being offered at top stores and compare them to the deal you've found.
Most shops have access to a similar list of deals, if one is head and shoulders above the rest, be suspicious.
With that main rule out of the way, here's 3 more things to consider and ways you can verify if a cashback deal is legit or not...
2. Only deal with well-established companies.
High street shops, major chain retailers, and proven online marketplaces all have a reputation to uphold and are more likely to be a reliable source of cashback mobile deals.
3. Consider the worst-case scenario before signing up.
Cashback deals are risky -- even with a reputable company. One wrong move and you might not be able to claim the money back. Can you really afford to pay the full amount for your contract?
This is amplified by the fact that most of the best cashback mobile deals involve tariffs with huge data allotments and other expensive features. So if things don't work out, you're not only left footing the entire bill but possibly locked into a contract that is way more than what you actually use or need.
Considering the worst case scenario, you can be sure you're able to meet the terms of the contract without added stress.
4. Read the terms and conditions.
We've said this already, but it's critical. Even with legitimate deals, there's a good chance the terms will contain little steps and details designed to trip you up or help ensure you don't see all of your money.
Again, read the terms and conditions carefully before agreeing to anything.
So Who Can You Trust?
While cashback might seem like a dirty dirty word, you can find a legitimate deal with a little research.
Not sure where to start? Consider these sites:
Of course, you can also check your local mobile phone shops and high street stores for deals as well.
Regardless of the service you choose to use, read the terms and services thoroughly.
Yes... we've said that a lot. But it's that important.
When it comes to finding a good mobile cashback deal, it's all about the little details.
Most cashback deals -- even good ones -- are designed to benefit the retailer or service
If the deal seems too good, it probably is
Always read the terms of service
Never choose a deal with a tariff you can't afford should the deal not work out
Note any important dates on your calendar in advance to avoid missing out later
Post any required bills and claims using recorded delivery for proof of meeting terms and conditions
Research cashback providers and compare deals to weed out potential scams
P.S. If you're looking to save money over the long-term, but don't want to risk your savings with a mobile cashback deal, we recommend going for an unlocked mobile and a SIM-only deal. You'll spend a bit more upfront, but save significantly over time. Better still, your savings are guaranteed.