Why cash back is better than Clubcard and Nectar points

Tesco Clubcard points and Sainsbury’s Nectar points are fantastic. I’ve used both for years. I’ve always casually shopped at Tesco and have done the main shopping at Sainsbury’s. But a recent conversation with a colleague at work changed this, when I found out that Clubcard points are worth twice as much as Nectar points (and up to four times as much with partners). As I’ve continued to dig deeper into this area, I asked myself the question: how does cash back stack up vs loyalty points? Read on to find out what I discovered after comparing them…

Am I a shopping snob?

For many years, I’ve done my main shopping at Sainsbury’s. That’s because in my town, a new Sainsbury’s superstore was opened about 4 years ago. And in a town dominated by Tesco, the customer base was quite small for a long time (although it’s starting to grow now). I was willing to sacrifice a 5% premium in price (vs Tesco) for a quieter and more relaxing shopping experience. Lidl and Aldi are (by quite a long way) the cheapest supermarkets in the UK – but I forgo these supermarkets for a few reasons:

• I dislike the shopping experience. The stores are small and often packed full of shoppers. The aisles are narrow and there is often only one till open so the queues are very long. I once had to queue for 20 minutes. My time is precious to me, and I don’t want to queue for that long (if at all).
• They don’t stock everything I need. While they may stock 95% of what I want, certain things like specific spices or unusual ingredients are often not available. In the past, I’ve found myself having to drive to another supermarket to buy these ingredients.
• The infamous middle aisle annoys me. I’m sorry, but I didn’t go to the supermarket to buy a chainsaw and a catalytic converter. Instead of filling this aisle with things a supermarket should actually have, they chase after revenue by appealing to the greedy eyes of the unsuspecting shopper. Oh well, I guess this is what helps to keep the prices so low.

A conversation with a colleague

A couple of months ago, I was talking to a colleague who mentioned that she (and her partner) had managed to book an all-inclusive package holiday to the Canary Islands on the cheap using Tesco Clubcard points. I was shocked. How the hell did you save up so many points? I recalled how I recently spent all my points in-store on a bottle of mayonnaise.

She explained to me how Clubcard points are worth twice as much with partners (of which EasyJet was one), and how her and her partner had taken advantage of exclusive points offers when buying certain products. They’d stock up on, for example cat food and toilet roll when there was a points offer on for those products, gaining thousands of clubcard points in this way. They’d also buy fuel at Tesco. Then, at the end of the year, they’d use all the clubcard points to subsidise an EasyJet package holiday. I’m in I thought – I wanted a piece of the pie too.

Is there a better alternative to Clubcard and Nectar points?

So, recently, I’ve started shopping at Tesco to accumulate Clubcard points. I wanted a cheap all-inclusive package holiday. But first, some quick maths:

• With both Sainsbury’s and Tesco, you get 1 point for every £1 spent.

• Sainsbury’s Nectar points are worth 0.5p each. Tesco Clubcard points are worth 1p each.

• In addition, Tesco Clubcard points are worth twice as much with their partners (so 2p). This makes Clubcard worth 4x Nectar.

• To accumulate enough to subsidise a package holiday (say £500 worth of points), I’d need to spend £25,000 (£25,000*£0.02 = £500). With our average shopping bill at ~£4000 per year, it would take six years and three months to accumulate the points.

This assumes no exclusive points offers. Even so, it seemed like a long time to me. Surely there must be a better way to save money on my shopping? Well, yes.

Introducing cash back

Cash back is a rewards program that returns back a percentage of the purchase amount to the cardholder. It’s not free money – you have to make a purchase to qualify for cash back. It works like this:

• In order to generate revenue, many online retailers have affiliate partnerships with other websites to promote their business.
• Now, my two favourite cash back websites are Cheddar and Topcashback. By clicking on the Topcashback link, you’re taken to my referral page for the website. Whenever someone sets up an account, I get a small referral fee (and you also get a reward).
• This is essentially how cash back sites work, but on a much larger scale. Topcashback and Cheddar both have affiliate partnerships with thousands of online retailers. They are paid a fee by the retailer every time a customer buys something from one of their affiliate links.
• The magic of cash back is that they share their fee with you. This appears to you as a percentage return on your purchase (usually somewhere between 1-5%), which is added to your cash back wallet. You can then choose to pay this into your bank account.

You are being rewarded for spending money with these businesses. Who wouldn’t want that?

My cash back website of choice is Topcashback, while Quidco is their main rival in the UK. However, as of January 2026, the range of cash back offered by Topcashback on Tesco purchases is quite underwhelming:

Fortunately, there is an easy solution to this…

Save money on your shopping with… gift cards

You can bag more cash back by purchasing a gift card, and pre-loading it with however much money you want. These are treated as cash by the retailer, and often have no expiry (or sometimes five years).

Topcashback sells gift cards at: https://top-giftcards.topcashback.co.uk. For Tesco gift cards, they offer 2.6% cash back (note that I have a Plus account, which, for £5 per year, gives me access to better cash back deals). This is immediately a better return than Clubcard points, even when they’re used with Tesco partners (benefiting from the full 2p/point value). A quick check reveals the Sainsbury’s gift card comes with 2% cash back, which is 4x better than the normal return you’d get on Nectar points (they are worth 0.5p/point). As far as I can tell, Aldi and Lidl don’t offer gift cards (at least not ones you can get cash back on).

Cheddar

A potentially more lucrative solution is to use Cheddar, which solely offers cash back on gift card purchases. I recently saved over £57 buying Airbnb gift cards on Cheddar (to pay for a two-week holiday in Scotland later this year). They currently offer 3.5% cash back on Tesco gift card purchases, and 2.5% cash back on Sainsbury’s gift cards. (Note that Sainsbury’s gift cards can be used online and in-store, but Tesco’s can only be used in-store.) Even higher cash back can be achieved through buying (or topping up), gift cards over consecutive weeks. You can increase Tesco cash back to 4% through these bonuses, for example.

You won’t collect Clubcard or Nectar points when paying with a gift card, but you will still get access to the Clubcard/Nectar prices these schemes offer – assuming you scan your membership card when shopping.

You will save more money on your shopping this way than you ever would collecting points. Of course, there’s a psychological balance here too. If you like to collect points, and enjoy watching your balance grow towards a discounted holiday or day out, then great. Keep doing it if that’s what you enjoy. But then again, you can probably get the same enjoyment out of watching your cash back wallet fill with (even more) money every time you shop.

Which other retailers is cash back offered for?

Cash back is offered for hundreds of retailers. If you’re buying anything online, you should check to see if there is cash back offered before purchasing. For example, a quick look on the Cheddar app shows that they offer:

• 3% cash back on M&S gift cards.
• 3.5% on Boots (online only).
• 4% at Waterstones.
• 6% at Nike.
• 2.5% at Apple.
• 8.5% at HelloFresh.
• 11% at Adidas.

Cash back isn’t necessarily instant money (although with Cheddar, the payments are instant upon your purchase being made). Topcashback and Quidco can take several days to pay the money into your online wallets.

Bonus – stack your cash back!

In some cases, you can get cash back multiple times on the same purchase. You can get one layer of cash back through buying gift cards from Cheddar or TopGiftCards. But wait, there’s more! You can then get a second layer of cash back by using these gifts cards to make purchases online through affiliate links provided by Topcashback or Quidco (for example). So, all in all:

• First layer of cash back from buying gift cards.
• Second layer of cash back from using these gift cards to make purchases through affiliate links on a cash back website.

Just make sure you load the gift cards with only the money you need (and no more), as many retailers don’t offer cash refunds on their gift cards.

So, what’s the takeaway? If you want to truly save money on your shopping, the answer isn’t obsessively collecting Clubcard or Nectar points – it’s using cash back vs loyalty points strategically. By stacking gift cards with cash back sites like Topcashback and Cheddar, you can beat rewards points at their own game. Sure, collecting points can be fun, but seeing real cash appear in your account? That’s what it’s all about.

FAQ

I hope you found this article interesting, and thanks for reading! If you enjoyed this, here are some other posts you might like:

• Simple ways to save money.
• Save money by running your personal finances like a business.
• Stuff I recommend.
• 14 Simple Ways to Live a Slower, Easier Life
• Stories on the power of building wealth

You can follow me on X, and find me on Pinterest, Instagram and Facebook.