How do 100% cashback sites like topcashback/quidco ect make money?

[londonninja]

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How do 100% cashback sites like topcashback/quidco ect make money? I just dont get it? What kind of business model do they have?

Thanks in advance ;-)

[Fitness Coupons]

They'll provide cashback on a % of their commissions. So they might make £20 on a sale and give £5 cashback meaning they make a £15 profit.

[keano]

Some offer 100% of their commissions (or near to it) back as cashback to customers. They'll likely be making money from tenancies and contextual advertising.

[lowndsy]

• Not everyone withdraws their cash - things like "daily clicks" and "easy cashback" are wildly popular, but very few members have the stamina to keep using them every day, and end up abandoning an account with a few pounds in. The mainstream cashback sites encourage this with the language they use and the impression of "money for nothing". Good niche sites often have a higher withdrawal rate, which makes 100% cashback less attractive as a business model.
  
• They usually pay the base commission to their members and keep any extra from performance tiers, bonuses etc. They are often assisted by network and agency representatives who guarantee enhanced commissions.
  
• When fraudulent members are discovered they are (or at least, should be) ejected from the cashback site, but any funds that were already paid are rarely clawed back to the berchant / network that was targeted. They don't really encourage this, but the sheer size of the biggest sites means they are more accessible to people who want to try being dodgy - trying to earn cashback from orders they cancel, for example, or manipulating affiliate tracking to trigger false sales.
  
• They receive payments from some networks, who share their own overrides to keep the biggest affiliates happy and not using their competitors.
  
• A surprising amount of people just use the "don't bother logging me in, I'm not worried about getting cashback" option. While it may seem odd to computer savvy and shopping people like us, a lot of Internet users really aren't that bothered about cashback, or are rubbish at Internet searching and end up at cashback sites without really understanding what they are.
  
• Some charge a fee if you withdraw funds from your account, either paid once annually, or every time. This is one of the differences TCB highlight between themselves and Quidco - they call themselves the top "free" cashback site, because Quidco has a £5 annual charge.
  
• They don't all always pay 100% cashback. Sometimes because the merchant won't allow them to, and sometimes by choice for a specific deal, prooduct or merchant.
  
• Another little trick that I'm not going to tell you.

Plus, of course, activity outside the affiliate channel - tenancies, listing fees, paid placements, banners etc. They also sometimes list merchants who do not allow cashback to be paid, and keep all of the CPA from that.

(updated to include the annual charge)

[aotagain]

Don't some of them charge an annual membership fee and then give 100% cashback ?

[fiftyonesix]

Don't the big boys also take the first £5 earned each year by members as a fee or is that old hat?

[lowndsy]

Don't the big boys also take the first £5 earned each year by members as a fee or is that old hat?

Don't some of them charge an annual membership fee and then give 100% cashback ?

Sorry, yes they do - didn't want to make it too Quidco specific, but I suppose that is an important part of it - I have updated my post above.