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Key partners including eBay, Barnes & Noble.com, Overstock.com, Sears, Zappos.com and WPP have announced their participation in the scheme.
The initiative is designed to help Microsoft gain ground on Google and Yahoo when it comes to generating search-based advertising revenues - they are well ahead of Redmond in the market.
The complete Live Search cashback product portfolio includes more than 10 million product offers from more than 700 merchants, including more than 13 of the top 40 US retailers, said Microsoft.
The company has also announced it has delivered a new Live Search travel destination platform, Live Search Farecast, making it easier for searchers to find the best travel deals on the web.
"We believe search can offer much more value to consumers and advertisers than it does today, and we see Live Search cashback as an important opportunity to deliver additional value," said Microsoft chairman, Bill Gates.
"Our goal is to make Live Search the most rewarding commercial search destination on the web. Live Search cashback will help advertisers drive more online sales while giving consumers a new way to stretch their dollars."