Earning discounts and cash back just for shopping online might sound too good to be true. But cashback websites such as Rakuten, BeFrugal, Swagbucks, Ibotta and Mr. Rebates can actually work. And as long as you go through them for purchases you need to make anyway, using these sites can be more lucrative than shopping with a rewards credit card.
Rakuten is one of the largest and most commonly used cashback sites. For many years, the company was known as Ebates. However, after Rakuten acquired Ebates in 2014, it decided to officially change the name in 2019.
The original Ebates was founded in 1999, and the site has more than 10 million users and has paid out more than $1 billion in cashback rewards. And numerous personal finance bloggers told HuffPost they felt it offered the best deals compared to other similar sites.
Kate Horrell, a personal financial educator for military families, started using Rakuten nearly 20 years ago. At the time, she had a new baby and was on a tight budget, and retailers were offering huge rebates through the site. “It was a good way to get some of those things we needed at very low prices,” she said.
Horrell has received a total of $2,355.93 in rebates since she signed up, according to a screenshot of her account that she shared with HuffPost.
Marc Andre, a personal finance blogger at VitalDollar.com, is also a regular Rakuten user. “Just a few days ago, I made a $50 purchase and [Rakuten] saved me $10,” he told HuffPost. “All I had to do to get that $10 was click once on the browser alert to activate [Rakuten], and click a second time to let [Rakuten] try the coupon code that it was suggesting. I didn’t even know that site participated with [Rakuten], so without the browser extension I would have paid an extra $10 for the same purchase.”
Is Rakuten A Scam?
Some people wonder if sites like Rakuten are a scam. How can they pay out all that cash? According to Chelsea Hudson, senior public relations officer for Rakuten competitor TopCashback, the misconception occurs largely because people don’t understand how these types of companies make money.
Hudson said cashback sites work with affiliate networks that represent online retailers. The cashback sites receive a negotiated percentage of the purchase price for referring new consumers. Some of that cut goes to the shopper and the site keeps the rest.
However, Hudson said that once the retailer confirms the referral was made by a cashback site, it can take several additional weeks to receive the money from the network. “Cashback process speeds vary between retailers,” she said. “For example, a major online retailer like Walmart has a quicker payout speed than a travel merchant, since the majority of travel merchants make cashback payable after your stay.”
In fact, cashback sites can take anywhere from a couple weeks to several months to pay members their rewards, due to the affiliate networks’ process for confirming purchases. That can seem like a red flag to members who assume they’ll be paid out instantly.
“The number one complaint made by users of popular cashback sites ... is ‘I never received my cash back,’” she said.
How Rakuten Works
You can sign up for Rakuten using your email address, Google or Facebook account. The easiest way to use Rakuten is when shopping online, but it’s also possible to earn rewards in-store as well.
There are a few ways to save money while shopping online. The first is to search on Rakuten.com for a product across all of the site’s participating retailers and find the best cashback deal. Once you do, click through to the retailer’s site and proceed with your purchase as you normally would.
To test it out, I headed over to Target.com. Immediately, the Rakuten extension began flashing to notify me that a deal was available. When I clicked the extension icon, a dropdown indicated I could activate up to 1 percent cash back, with the exception of a few categories. By clicking the red button, the cashback deal would automatically be applied to my purchases through the site.
Finally, you can take advantage of Rakuten through online search results when the extension is activated. For example, when I searched Google for “coffee mugs,” Rakuten listed the cashback rewards opportunities right in the search results. I could then click through to the retailer’s website and activate the cashback offer to secure it.
In addition to earning cash back, Rakuten also finds online coupons and promo codes you can try out to earn additional discounts. This feature is similar to tools such as Honey and Wikibuy, which might do a better job of aggregating these types of deals. Even so, it doesn’t hurt to have one more tool scouring the web for added deals.
Rakuten will pay out our cash back every three months as long as your balance is at least $5. You can choose to be paid via check or PayPal.
Cashback Sites Do Have A Few Drawbacks
Even though Rakuten is not a scam, the service has some downsides you should know about before you sign up:
Privacy concerns: Though you don’t have to use a Facebook account to log into Rakuten, that is an option. However, you might find that Facebook’s platform is too invasive when it comes to gathering and sharing data. Plus, as Hudson mentioned, cashback sites like Rakuten need to use tracking cookies to work, which follow your activity online.
Unpredictable rewards: Another somewhat annoying feature of Rakuten and similar sites is that the cashback offerings can vary day to day. That means you might make a purchase today that awards you 2 percent cash back, only to find out a week later that you can make the same purchase for 5 percent back. If you can wait a bit and scout out the higher cashback rewards, using Rakuten is worth it. But if you need to make an immediate purchase, you might miss out on some savings.
Some products don’t qualify: You might also be disappointed to find that even though Rakuten offers lucrative cashback on a certain site, not all the products necessarily qualify. Take the Target example from above ― though the site was offering 1 percent back, those rewards didn’t apply to items such as electronics, toys or books.
Delay between purchase and payout: As Hudson also mentioned, one of the biggest complaints about Rakuten and other cashback sites is the amount of time it takes to get the money. With Rakuten, you can expect a check four times a year at most ― and only if you’ve accumulated at least $5 ― so you can’t really rely on consistent income by using it.
How To Maximize Your Savings
Using cashback sites on their own can net you some pretty valuable rewards. But if you want to increase those savings, there are a few best practices and tricks you can employ.
Enable cookies. Since tracking cookies are necessary for cashback sites to work, you’ll need to ensure you’re being tracked properly. Hudson said you should clear your cookies before you use a cashback site to ensure any previous retailer visits are wiped from your history, and then make sure cookies are enabled. “Don’t open any additional tabs or deviate from the journey by browsing other sites,” she said. Also be sure to turn off any ad blockers or firewalls that could prevent cookies from working.
Check competitors. Ben Luthi, a money and travel writer, said that if you really want to maximize your return, you should check the site Cashback Monitor first. “It has just about every cashback website, points and miles portal and more,” he said. All you have to do is enter the online retailer in the search bar and you’ll get the current cashback rate among all companies so you can go with the best deal. In fact, Luthi said he likes to use Rakuten on occasion, but personally prefers the deals he finds on TopCashback and Swagbucks.
Add the browser extension. Luthi also said it’s important to add the Chrome or Firefox extension to your browser, which will give you a pop up if you’re on a website with a deal. It’ll also display cashback opportunities in Google search results. “I’m a lazy online shopper, and that eliminates the step of visiting the cashback website and clicking through to the retailer from there,” Luthi said.
Stack it with other rewards. “What I really love about [Rakuten] is that you can combine it with other cash back and rewards,” Andre said. By stacking a few levels of rewards, you’ll save even more. For example, Andre will buy discounted gift cards at Raise.com.
“I might pay $45 for a $50 restaurant gift card at Raise ― a savings of 10 [percent],” he said. Then Rakuten will offer an additional 1 percent cash back for purchases at Raise.
“And if I purchase with my Citi Double Cash credit card, I’ll get another 2 percent cash back,” Andre added. In that scenario, he earns a total of 13 percent cash back. Not too shabby.
This story has been updated throughout to reflect that Ebates changed its name to Rakuten.