Online retailers only offered a 2 or 3 per cent cashback on purchases and it took several weeks for the cashback to be confirmed before she could even withdraw it from the app into her bank account.
The most popular cashback apps in Australia, ShopBack and Cashrewards, boast more than 2 million users, according to their websites.This is how they typically work: a user makes a purchase via the app, the app earns a commission on the sale from the retailer, then the app shares some of that commission with the consumer — or gives the user cash back.
"Because they also feel rewarded for spending money, that could also help them to internally justify an expensive — or unnecessary — purchase."But Professor Melnyk warns, "the only free cheese is in the mousetrap".Some of The Iconic's customers have been caught out by the aftershocks of a "credential stuffing" attack, but a cybersecurity expert says common shortcuts have put shoppers at greater risk without them knowing.
Senior campaigns and policy adviser at consumer advocacy group CHOICE, Rafi Alam, understands the appeal of cashback apps with Australians contending with cost-of-living pressures. "Cashback sites are able to collect a great deal of data about customers," he says, "from personal information – what you enter when you sign up to social media behaviour, contact information, shopping behaviour and insights into that."
"We think it's urgent that regulations are put in place so that the amount of data collected is minimised — so that we can slow down or stop the rate of data collection," he explains.Finance content creator Michael Ko describes himself as an "avid user" of cashback apps — his lifetime earnings are in the thousands across the two biggest apps in Australia.