Cashback giant Quidco has revamped its charges, placing some customers into a free service and others into a £5-a-year "premium" version.

All users previously had to hand over their first £5 of cashback each year as an annual membership fee, although there was no charge if they didn't earn any cashback (see our Top Cashback Sites guide for the best deals).

Now the company has created a two-tier system, with customers automatically split into two groups:

  • Those who have paid the £5 membership fee in the past 12 months will join the premium service, but won't have the £5 fee taken from their cashback until the anniversary of their last payment. As before, the fee is not charged if no cashback is earned.
  • Those who have NOT paid the £5 membership fee in the past 12 months, or at all, will switch to a free basic service.

Quidco says its premium accounts give quicker cashback, better service and loyalty bonuses, while its free accounts provide same service as before.

Users can switch between the two new services. Customers should have recieved emails yesterday telling them about the changes.

Cashback sites work by giving you a chunk of the commission they receive if you spend money at a retailer after clicking through to it via the cashback site. See our Top Cashback Sites guide for more information on how they work.