With thousands of financial products catering for all our needs, from insurance to mortgages, finding the right one used to be a daunting task. Then along came the price-comparison sites offering to do all the legwork and find us the best deal; life, it seemed, had become a whole lot easier. But now cashback sites are also big business, and a fight for revenue could be threatening the best interests of consumers.
The comparison and cashback sites, which both receive commission from retailers and financial product providers for introducing business, are engaged in a bitter war to protect their income.
The comparison sites claim some of the cashback sites are charging higher prices to offset the money they pay out, while cashback sites say that revenue-protection measures put in place by the comparison sites often prevent customers from obtaining the cashback they expect.
A recent report by consumer group Which? was highly critical of comparison sites, saying they often failed to provide users with the best-value financial products. Which? urged consumers to obtain quotes from more than one comparison site, or to buy direct from the retailer.
Comparison sites have rushed to deny that it is possible to find a cheaper deal by going direct. Jason Wyer-Smith, spokesman for Gocompare.com, says: "In its report, Which? only managed to identify one deal that was cheaper by buying direct. This is a rogue exception. Our relationship agreements prevent pro-viders offering products more cheaply direct."
The situation with cashback sites is even less clear, but Paul Nikkel, co-founder of Quidco, says his affiliate contracts also stop pro-viders selling their products at lower prices direct. He adds that the cashback offered by Quidco is a genuine discount. The site makes its revenue from a £5 joining fee.
Neil Durrant, co-founder of cashback site Greasy Palm, describes the allegation that higher prices are charged to offset the cashback as "unfair".
Separately, however, customers don't always get the rebate they expect when they visit a cashback site, and this is partly down to how purchases are monitored. The simplest form of tracking is the "cookie", a piece of software that is sent to customers' computers to identify them if they return. Sales will be tracked from the customer to the introducing website as long as the cookie stays on that computer. However, new cookies will often overwrite old ones before they expire.
Additionally, comparison sites now often demand commission where they are the first site that takes a customer as far as a full quote. This means that a further application from a customer via a cashback site to obtain a discount on the sale will be fruitless.
Cashback sites claim these demands by the comparison sites for "first touch" commission are unfair. They even suggest that "consumer champion" websites, which offer advice on the best deals but are not sales channels, may actually be colluding with the comparison sites. They claim consumer sites that encourage us to use a comparison site before going on to a cashback site do so to benefit their own interests as much as the consumers themselves.
One website advertising expert says that making sales introductions via a third party allows the consumer champion sites to be editorially critical of certain retailers without fear of losing ad revenue from them, which might happen if they had a direct commercial relationship.
Now advertisers are trying to placate websites with which they have relationships by developing "mul-tiple referrer payment" tracking systems that will be able to identify more clearly the point of sales "conversion", and whether the "first touch" or "last touch" was the more significant in making the sale.
However, all this could become irrelevant if the comparison sites move into the cashback field. The shopping site Kelkoo has announced that it plans to do exactly this, and at least two UK comparison engines, one of them a financial site, are considering offering cashback.
Meanwhile, Mr Durrant at Greasy Palm says he has been looking into introducing a comparison search engine to his site for most retail products. He explains: "We already get several million product feeds from our retailers, which could allow us to provide price comparison and rewards."
Mr Nikkel at Quidco recommends that anyone using his cashback site clears all their cookies before logging in, and preferably chooses a separate brow-ser for Quidco shopping.
"Even better, research the best deals elsewhere rather than going via a comparison site first," he says. "Or, if you want to use a comparison site, never proceed as far as a full quote or receiving a reference number [to be sure of receiving a cashback payment]."Reuse content