Last Updated on September 7, 2023 by Rebecca Lake
Love saving money? Who doesn’t, right?
One of the simplest ways to save money on shopping is to create a Rakuten account. With Rakuten, you can earn up to 40% back at your favorite online stores and on in-store purchases.
But how does Rakuten make money? And do you have to pay to use it?
Rakuten makes money through a form of affiliate marketing. When you shop at a specific store to take advantage of a cashback rewards deal, Rakuten earns a commission and passes some of it on to you.
Keep reading to learn how Rakuten makes money and how you can use the app to earn cash back when you shop.
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Table of Contents
What Is Rakuten?
Rakuten, formerly Ebates, is a free cashback site and mobile app that pays out real money to its users when they shop at partner retailers.
Founded as Ebates in 1997 by Alessandro Isolani and Paul Wasserman, the company changed its name to Rakuten after being acquired by the Rakuten Group, Inc. in 2014. (And in case you’re wondering, Rakuten is Japanese for “optimism”.)
Is Rakuten legit? Yes! Rakuten is accredited by the Better Business Bureau and has over 17 million users in the United States, who’ve collected an estimated $3.7 billion in cash back.
Want to Get Cash Back When You Shop?
Making extra money is easy with Rakuten!
Rakuten is a free app and browser extension that helps you find coupons and discounts when you shop online or in stores. You can earn up to 40% cashback when you shop at hundreds of partner retailers, plus get a $10 sign-up bonus and up to $30 in bonus cash for each person you refer!
How Does Rakuten Work?
Rakuten members earn cash back for online purchases and in-store purchases at participating stores. More than 3,500 stores partner with Rakuten and it’s likely that some of your favorite stores are on the list.
There are three ways to earn cash back with Rakuten:
- Shopping offers through the Rakuten website
- Activating offers in the Rakuten mobile app (available for Apple and Android devices)
- Letting the Rakuten browser extension find deals for you when you shop online
The Rakuten browser extension, called the Rakuten Cash Back Button, is free to download and install. The extension is compatible with multiple browsers, including Chrome, Firefox, Safari, and Microsoft Edge.
When you enable the Rakuten browser extension, Raktuen will let you know if there are any cash-back offers or coupon codes available as you visit different websites to shop. Some retailers will let you claim both cash-back rewards and discounts on the same purchase, multiplying your savings.
Linking a credit card or debit card to your Rakuten account allows you to take advantage of cashback deals through the Rakuten mobile app. You just need to activate offers through the app, then shop with your linked card in-store at participating retailers and restaurants.
Rakuten new member bonus and referral rewards
It’s free to join Rakuten and once you’re a registered member, you have a chance to earn an introductory bonus. New members receive a $10 welcome bonus after making their first qualifying purchase of $25 or more within the first 90 days of membership.
On top of that, you can earn more bonus cash back when you refer friends and family to the Rakuten app. You’ll have a unique referral link that you can share with friends and family members via email, text, or social media.
For each person who clicks your affiliate links and signs up for a Rakuten account, you can earn up to $30!
How much money can you earn with Rakuten?
Rakuten features retailers that offer up to 40% cashback on qualifying purchases. Certain retailers are double cash back stores, meaning you can get twice the cash back when you shop, while others offer a flat cashback rate.
In addition to earning cash back at retailers, you can also use Rakuten to get back some of what you spend when booking travel and vacations through partner airlines and hotels.
In terms of how much money you can make, it depends largely on how often you shop and which deals you’re taking advantage of. I’ve personally made close to $1,500 as a Rakuten user over the years and I don’t shop online that often.
How does Rakuten pay out cash-back rewards?
The minimum cash back rewards balance to receive a payout is $5.01. You can get a Big Fat Check once you reach that threshold. There are three options for getting paid with Rakuten:
- Paper check
- PayPal deposit
- Turn cash back earnings into American Express Membership Rewards points
Linking your PayPal account is the fastest way to get paid, as it can take time for a physical check to arrive in the mail. But you do have that option if you don’t have a PayPal account.
Rakuten pays out quarterly on February 15th, May 15th, August 15th and November 15th of each year.
Rakuten always pays cash, unless you’d prefer to trade it in for Membership Rewards points. The fact that you can get real money for free and the payout threshold is low makes it one of the best cash back websites around.
How Does Rakuten Make Money?
Rakuten’s business model is based largely on affiliate marketing. Affiliate marketing means promoting products or services, then earning a commission if someone makes a purchase. That’s something you might be familiar with if you run a blog.
So how does Rakuten make money if it’s free for shoppers to use?
Rakuten makes money when you shop
One way Rakuten makes money is through clicks and purchases. There are three ways Rakuten makes money as an affiliate.
- Pay-per-click (PPC): Rakuten links to partner stores on its website and the Rakuten mobile app. When you click through to one of those partner websites, Rakuten earns a commission from the partner.
- Pay-per-sale (PPS): When you shop through Rakuten partners, Rakuten gets a piece of the sale for referring you.
- Pay-per-lead (PPL): Rakuten also makes money by promoting offers for partner companies. When someone shares their contact information to opt into the partner’s email list, Rakuten earns money for providing the lead.
How does Rakuten make money if it’s paying cashback to its members? Unlike other affiliates, which may keep all of an earned commission, Rakuten shares some of its commission with its members.
Rakuten also makes money from selling marketing data
Rakuten earns a second income stream by selling its marketing data to third parties. The company never sells your personal data, but Rakuten shares information about its transactions with partner businesses.
Marketing agencies then buy that information and use it to fine-tune their marketing and advertising campaigns for the client businesses they work with.
How much money does Rakuten make?
For the 2022 fiscal year, the Rakuten Group reported consolidated revenues of 1.9 trillion across all of its income-producing channels. That’s approximately $13.1 billion USD.
As more people shop online and look for simple ways to save money, Rakuten’s revenues are likely to continue their steady pattern of growth.
How to Make Money With Rakuten
Using Rakuten can be an easy way to earn extra cash regularly, whether you’re making everyday purchases or shopping for a special occasion. Rakuten offers several different ways to earn cash back.
Note: To earn cash back for online shopping, you’ll need to disable any ad blockers you’re using.
We’ve got a complete guide to making money with Rakuten that you can dive into, but for now, here’s a quick roundup of the best ways to start earning cashback with the app.
- Get cashback on the Rakuten website. A quick visit to the Rakuten website can tell you which retailers are offering top deals, including double cash back stores and For You offers that are tailored to your spending preferences.
- Download the Rakuten browser extension. If you don’t have time to visit the Rakuten website to look for deals, you can let the Rakuten cash back button do it for you. When you see a deal that looks appealing, you can click the button to activate the offer automatically and earn cash back.
- Scan for special promotions. Some Rakuten partners offer special discounts and other promotions to members. They can include limited time only offers and deals that are just for first-time users.
- Download the Rakuten mobile app. The Rakuten mobile app lets you take cash-back offers on the go when shopping in stores. You’ll just need to link your credit card to your Rakuten account first to take advantage of mobile app deals.
- Get the welcome bonus. With such a low minimum purchase threshold, it’s fairly easy to get the $10 welcome bonus Rakuten offers, even if you don’t shop online that much.
- Earn referral bonuses. Referring friends and family is another easy way to make money with Rakuten, and you don’t even need to shop! Remember, you can get up to $30 in cash back for each person you refer using your unique affiliate link.
Pro tip: Enabling push notifications in the Rakuten app ensures that you never miss out on great deals for in-store cash back.
Want to Get Cash Back When You Shop?
Making extra money is easy with Rakuten!
Rakuten is a free app and browser extension that helps you find coupons and discounts when you shop online or in stores. You can earn up to 40% cashback when you shop at hundreds of partner retailers, plus get a $10 sign-up bonus and up to $30 in bonus cash for each person you refer!
How Does Rakuten Make Money FAQs
Can you earn cash back at Amazon with Rakuten?
Amazon used to offer deals on Rakuten but unfortunately, that partnership has ended. If you’re looking for ways to save money when shopping at Amazon, you might try the Honey browser extension instead. Honey scans Amazon listings to help you find the best deals and it can also track prices for you to send notifications when an item’s price drops.
Is there a downside to Rakuten?
Rakuten’s biggest downside is the payment schedule since you can only collect a payout every three months. Critics of Rakuten have said the cashback earnings rate isn’t great either, but from my own experience shopping with the app, I’ve seen rewards rates that are much higher than what some top credit cards offer. Like anything else, Rakuten has some pros and cons.
Do you have to pay taxes on Rakuten cashback earnings?
Generally, the IRS views cashback rewards as a discount, not income. Since discounts are not taxable, you shouldn’t have to pay taxes on Rakuten cash back. But you may want to consult a tax expert to make sure you won’t owe any federal, state, or local taxes on the cash back you earn.
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Final Thoughts
This Rakuten review is designed to give you a better idea of how the company makes money. You could potentially earn quite a bit of cash back if you shop Rakuten partners regularly and you’re diligent about applying cashback offers and applying promo codes or coupons. Of course, be sure to read the fine print to understand exactly what you’re getting when you sign up with Rakuten.
Ready to get started? Join Rakuten and get a $10 welcome bonus!
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