Mighty Bargain Hunter

Click-through rebate sites — how do they work?

August 19th, 2005 | by mbhunter |

Maybe you’ve run across sites that give you a percentage off of your purchases for shopping through them. Or you get points or credits, which you can redeem for goodies like gift certificates and other stuff.

If you don’t know how these sites can make money — after all, they’re giving you discounts and gift cards and you don’t pay a dime to them! — then I’ll explain.

Most advertising that you see on websites is “pay for performance,” meaning that commissions are paid only when a sale is made. These are called affiliate programs. The merchant runs the affiliate program, and other webmasters (affiliates) that attract visitors that might buy the merchant’s products display text ads, banners, etc., that direct the visitors to the merchant’s site. If the visitor makes a purchase, the affiliate gets paid. Easy enough.

Websites can attract visitors with content (like I do) or additionally with the possibility of prizes (like iWon.com) or with the offer of rebates. ButterflyMall.com is an example of a rebate site. ButterflyMall is an affiliate of all of the stores on the website (several hundred of them!) and ButterflyMall gets a commission every time someone purchases something through one of their affiliate links. They give most of what they get back to the members, but keep some of it for themselves. So they’re counting on transaction volume to pay their bills.

The key here: In order to get the rebate, you have to sign up and click through to the store through their link. If they don’t get the commission, you don’t get the rebate. That’s the way it has to work.

Why am I hammering on this point? Because I think that people don’t understand this.

I’ve signed up 26 people for ButterflyMall.com already. Why do I encourage people to sign up? First and foremost, I believe that it’s a good way to save a little more money if you’ve already done your comparison shopping. I use this site myself. They have very competitive payouts — they usually give back over 90% of what they take in. Secondly, I do get a commission equal to 10% of your rebates if you sign up under me. That’s part of what makes it MightyBargainHunter.COM instead of .NET. (This is the “viral marketing” model at work — build the customer base by rewarding those who bring referrals.) In essence, ButterflyMall has its own affiliate program to bring in new members! (The same works for you if you sign up — you’ll get 10% of your referrals’ rebates!)

But so far, not one of the 26 people who’ve signed up under me has earned any rebates in the year or so I’ve been in the program! This puzzles me. Maybe no one wants to use it, which is unfortunate, because it’s so daggone easy. What I’d like to believe — and what I hope is true — is that my referrals just don’t understand that they need to click on the links in ButterflyMall to “trigger” their rebates.

I’m certainly not pressuring people to spend money just to get rebates — that’s dumb. But if people do want to buy things online and want to get the rebates through ButterflyMall, then they need to understand how ButterflyMall makes its money so that they can make theirs.

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