Rakuten, formerly known as Ebates, is an online platform that helps people bag huge discounts on apparel, electronics, furniture, and more. Besides discounts, Ebates offers cashback almost with every purchase using the provided link. The Ebates app is completely free to use.
Then, how does Ebates make money? We have the answer ready for you. Typically, Ebates or Rakuten features an affiliate revenue-sharing program for users. So, customers can find out the best deals on different e-commerce stores through Ebates. Thus, users can earn the anticipated cashback or reap the benefit of discounts.
Let’s check out in detail how Ebates makes money.
A Quick Overview of Ebates (Rakuten)
How does Rakuten work? Before answering this, we should check out what Ebates or Rakuten is. As you already know, Rakuten or Ebates is a web platform and mobile app that can save you money on your everyday expenses.
Originally established in 1997 in California by Paul Wasserman and Alessandro Isolani, Ebates was renamed by the Japan-based e-commerce giant Rakuten Group Inc. in 2014. Over 15 million prefer purchases through Ebates or Rakuten to earn cashback.
In addition, Ebates has paid its members around $2.2 billion in cashback rewards since 1999. So, Rakuten or Ebates can be rewarding for its users and members.
Working Mechanism of Ebates
If you are new to Ebates or Rakuten, you can download the app from the App Store or Google Play Store. Otherwise, you can sign into your Rakuten account from the Rakuten website. That’s how the Ebates or Rakuten app works on your end.
However, you can also add Rakuten’s free browser extension, named Rakuten Cash Back Button. Web browsers like Mozilla Firefox, Google Chrome, Microsoft Edge, and Safari support the free browser extension of Rakuten.
How does Rakuten work, then? The Rakuten app or browser extension will inform you about available coupons on shopping websites you frequently shop from. Unlock more cashback offers by adding your credit card to your Rakuten account. Linking a credit card to your Rakuten account will benefit you from cashback deals when you use the card for paying at participating restaurants and retailers.
If you are a beginner, you can sign up for a Rakuten membership, which is free and available. Simply, provide your email address and name. Rakuten or Ebates will reward you with a $10 welcome bonus once you make the first purchase, worth a minimum of $25 within 90 days of signing up.
Apart from such thrilling welcome bonuses, you can use Ebates for shopping from over 3,500 stores, both online and offline. How much cashback can you expect while shopping through Ebates? Well, the amount of cashback varies from one participating business to another.
Typically, you can see a range from 1% to 40% in cashback through Rakuten. For instance, you can unlock deals like 15% while shopping from Lands’ End, 1.5% from H&M, etc.
How Does Ebates Make Money?
Since Rakuten or Ebates lets you know about such amazing offers on your daily purchases for free, you might be thinking about how it makes a profit. Surprisingly, Rakuten members can quarterly earn a big fat check. The company itself earned a revenue of $13 billion in 2021.
Then, how does Ebates make money? After researching a bit, sources of Rakuten or Ebates were clear to us. Here are possible ways Ebates earn money:
1. Referral Charges
Typically, Rakuten or Ebates earns a commission for every purchase done by its users with its business partners. So, Ebates decides on a specific percentage of commission with its partner retailers. However, the commission percentage depends on the sales the business receives from the Ebates referral traffic and its volume.
Interestingly, Rakuten doesn’t make money from its business partners in only one way. Instead, the site makes money from its partners in the 3 following ways:
- You visit an Ebates partner’s site through Ebates and browse items. Here, Rakuten or Ebates earns through PPC or Pay-Per-Click.
- If a user purchases anything from a business partner site through a link posted on Rakuten, the company receives a commission percentage of the sale (Pay-Per-Sale).
- On the other hand, businesses might lure users through future discounts and compel them to share their contact details. So, specific businesses can pay Rakuten a commission for every lead the site creates. Rakuten or Ebates earns a commission as a part of the Pay-Per-Lead campaign.
However, Ebates helps users earn some commission as cashback rewards from their profit from partnered businesses. Here’s how Ebates or Rakuten stands out from other affiliate marketers.
2. Data Sales
Does Rakuten sell your information? Previously, the company faced a huge controversy in disclosing how it manages and sells data. However, the company claimed that it never trades in users’ data.
Still, Ebates provides anonymized and aggregated data to different marketing companies based on transaction activities. What Ebates or Rakuten does is to track every transaction activity with its retail partners. Then, the company sells the data to marketing firms, and they can use it in advertising campaigns.
Hence, you can be assured that Ebates doesn’t sell your personal data to any other business.
3. In-Store Shopping
Fortunately, Ebates users can shop in-store with its partners and get cashback on purchases. To facilitate the feature, you must access their in-store offers from Rakuten’s mobile app.
Ensure you link your credit card or bank account to your Rakuten account to be eligible for in-store shopping benefits. Just like earning commissions from partnered e-commerce sites, Rakuten gets a percentage of commission from its offline retailers.
Tricks to Make Money on Ebates
So far, you have learned how Ebates makes money. The best part of Ebates or Rakuten is that you can make money using Rakuten. Here’s how you can earn a great cashback reward from Rakuten, formerly known as Ebates:
- Visit your regular shopping websites through Rakuten and check if there are discounts and cashback rewards on daily purchases.
- In addition, you can refer Rakuten to your friends and family. Ebates offers a unique link to send to your friends or post on your social media handles. Every time anyone uses that link, you receive a bonus from Ebates.
- Claim your free $10 gift card to shop from Macy’s, Walmart, Kohl’s, or any other qualified shopping site through Ebates.
Moreover, find out exciting promotions and discounts through Rakuten’s browser extension.
Link your bank or credit card account to get huge discounts while shopping from brick-and-mortar stores.
Do Users Have to Pay Taxes on Ebates Rewards?
Depending on your area’s local, state, or federal tax regulations, you may have to pay taxes on the rewards received from Ebates or Rakuten. According to Rakuten users, rewards earned from the site are typically free from tax regulations because the IRS considers Ebates cashback rewards more like discounts than income.
Moreover, discounts are non-taxable. How does Ebates make money? Hopefully, the guide clearly explains that. After all, Ebates or Rakuten is a legitimate online service that assists you in getting discounts and cashback rewards for everyday shopping.
