Ibotta and Ebates (now Rakuten Rewards) are two very popular sites for earning cash-back on purchases you already make. How do they work? Which is better?
What’s a Cash-Back Site?
A cash-back site allows you to do your normal shopping and earn cash-back. You can think of it as an online mall that will pay you a small portion for going through their portal.
How do Cash-Back Sites Make Money?
Since they’re the “middle-man” between a consumer and the retailer, the get a commission for referring people to the store. Here’s an example of how it works:
The customer goes to the cash-back site, such as Ibotta or Ebates. Then they find a store that they were going to shop at anyways and purchases a product. The customer gets the product at the same price they would if they went to the store without the middle-man.
Since the store received traffic from the cash-back site, they give the site a percentage, essentially they receive a commission for the referral. Finally, you also get a percentage for going through the cash-back site to shop.
In the end, everyone is happy – the store sold an item, the cash-back site made a cut, and you get cash-back.
What is Ibotta?
Ibotta is a Denver-based company that was founded in 2011 by Bryan Leach. It allows you to earn cash-back when shopping in-store, online or through an app.
How They Pay: To withdraw the funds, you can use Venmo, PayPal, or get gifts cards for more than 30 stores and restaurants. Ibotta boasts high ratings on the Apple app store and Google Play.
How to Use Ibotta
There are three ways to use Ibotta: shopping in-store, connecting a loyalty account, and shopping online.
Shopping In-Store: In the app, click find offers, and it’ll show you all of the stores/items offering cash-back. Once, you purchase the item or shop at the store, take a photo of your receipt with the app to earn your cash-back.
Connecting a Loyalty Account: You can link loyalty accounts to Ibotta an enter your loyalty account number when checking out. Ibotta will automatically find offers for you and give you cash-back when there’s a match.
Online Shopping: Click “find offers” and you’ll see a list of all of the stores you can shop at online to earn cash-back. There are more than 140 stores! The great thing about shopping online with Ibotta is that it’s secure and you don’t need to upload a receipt to get your cash-back.
What is Ebates?
Ebates, which is now Rakuten Rewards, is a cash-back and rewards website based in San Francisco, California. They were founded in 1997 and have over 2,500 stores in their network. Rakuten is simply an affiliate link, meaning the store will pay them when you shop through their link.
How They Pay: PayPal or a check for the cash that you earned. However, you only get paid four times per year: May 15, August 15, November 15, and February 15.
How to Use Ebates (Rakuten Rewards)
To earn cash-back for using Rakuten, you can shop online or in-store. Rakuten also offers a credit card that earns cash-back that doesn’t have an annual fee.
Online Shopping: Click on a Rakuten link and shop.
In-Store: To earn cash-back for shopping in-store, you have to choose one of their offers and link it to your card. Then, you’ll pay with your linked card. Rakuten states that you need to use a credit or debit card. When you’re paying with debit, you need to run it as a credit transaction.
Rakuten Credit Card: The no-annual-fee Rakuten Cash Back Visa® Credit Card earns an extra 3% cash-back on Rakuten and Ebates purchases, and 1% on everything else.
Ibotta vs. Ebates
Now which is better, Ibotta or Ebates? Here are the winners for each category.
Number of Stores: Ebates
Ways to Pay: Ibotta
Cash-Back Percentage: Ebates
Redeeming Cash-Back: Ibotta
Time in Business: Ebates
Coupons & Referrals
Rakuten: You get a $10 bonus after you spend $25 or more within the first 90 days of membership. By referring a friend, you can also earn $25 or more. Be sure to check out their website for current promotions.
Ibotta: The welcome bonus can change and you also get a referral bonus for referring friends. Check their site to see what the current promotions are.
Both of these sites offer ways to save and earn money for shopping at places you already shop. If you’re looking for just one cash-back site to use, Ebates (Rakuten Rewards) will earn you the most money back. To maximize every purchase, it’s a good idea to use both of these sites to maximize savings and earnings.
Additional Money-Saving Resources
Want to learn how to save more or about different savings accounts? Here are a few more resources:
Featured photo by Clay Banks/Unsplash