Last Updated on November 12, 2022 by Rebecca Lake
Using the Rakuten app is one of the best ways to put money back in your pocket every time you shop. When you create a Rakuten account, you can earn up to 40% back at your favorite online stores and on in-store purchases.
But how does Rakuten make money?
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.
Is Rakuten legit? And how does Rakuten work?
Today, we’re breaking down how Rakuten makes money and how you can use the app to earn cash back for online shopping.
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What Is Rakuten?
Rakuten, formerly Ebates, is a 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”.)
Today, Rakuten is one of the best-known cashback websites in the United States. It’s accredited by the Better Business Bureau and since 1999, the company has paid out over $2 billion in cash back to Rakuten members.
So if you’re wondering, is Rakuten legit? the answer is yes, it’s a 100% legitimate company.
Make money while you shop!
Rakuten pays you real cash back when you shop partner stores in person or online. Join now for a $10 welcome bonus!
How Does Rakuten Work?
Rakuten works by giving its members multiple ways to earn cash back for online purchases and in-store purchases. Currently, more than 3,500 stores partner with Rakuten so it’s likely that some of your favorite stores are on the list.
Certain retailers are double cash back stores, meaning you can get twice the cash back when you shop. You can also use Rakuten to earn cash back when booking travel and vacations through partner airlines and hotels.
The minimum cash back rewards balance to receive a payout is $5.01. You can have a physical check mailed to you or get cash deposited to your PayPal account.
Rakuten always pays cash; you’re not earning points that you can redeem for free gift cards. The fact that you can get real money 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 with affiliates? There are several ways Rakuten makes money through its network of partners.
- Clicks. 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.
- Purchases. When you shop through Rakuten partners, Rakuten gets a piece of the sale for referring you.
- Leads. 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.
So how is Rakuten able to pay its members cashback? The simple answer is through the various commissions it earns from affiliate link clicks, promoting deals and providing leads.
Rakuten also makes money by selling its marketing data. 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? The Rakuten Group reported revenues of over $15 billion in 2021. More than 15 million people use Rakuten to earn cash back and members have been paid out over $2 billion to date.
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.
Rakuten mobile app
The Rakuten mobile app makes it convenient to earn cash back and take advantage of special offers from virtually anywhere. You’ll just need to download the Rakuten app and create an account with your personal information to get started.
You can enter your name and email address to create a Rakuten account. You can also use your Facebook account or Google account to sign up.
Once you’ve installed the app, you can activate a Rakuten Shopping Trip by clicking a Rakuten link.
A window will open inside the app letting you know that a cashback offer has been activated. You’ll then be redirected to the store’s website so you can start shopping and earn cash rewards on online purchases.
You can get the Rakuten mobile app free in the App Store and the Google Play Store.
Rakuten Cash Back Button
The Rakuten Cash Back Button is a browser extension that allows you to shop and activate cashback offers at online stores. This might be the easiest way to earn cashback with Rakuten if you prefer to shop from your desktop versus your phone.
You can get the Rakuten browser extension free through the Rakuten website or your browser’s store. When you visit Rakuten partners online, you’ll receive a drop-down notification telling you about cash-back offers and coupon codes available for that particular store.
All you need to do to activate offers or promo codes is click the drop-down bar. You can also activate cashback by clicking on the Rakuten button icon that shows up in your browser.
That’s another great way to earn cash back at your favorite online retailer without a lot of hassle.
Earn cash back in stores
Rakuten is great for any online shopper who wants to take advantage of hot deals and earn cashback. But you can also use it to earn in-store cashback at brick-and-mortar stores.
You’ll just need to link your credit or debit card to your Rakuten account to apply a cash-back offer in person at a store. When you find an in-store cashback offer that looks good in the Rakuten mobile app, you can activate it and shop with your linked card.
Pro tip: Enabling push notifications in the Rakuten app ensures that you never miss out on great deals for in-store cash back.
Make money while you shop!
Rakuten pays you real cash back when you shop partner stores in person or online. Join now for a $10 welcome bonus!
Rakuten Cash Back Visa Rewards Credit Card
Rakuten offers a cash-back rewards Visa credit card. If you open a Rakuten credit card account, you can earn unlimited additional cash back rewards on every eligible purchase made with the card.
Here’s how it works:
- Earn 3% cash back for online shopping through Rakuten
- Earn 1% cash back on all other purchases
There’s no annual fee so this could be a great way to get even more cash back on qualifying purchases. The only thing to keep in mind is that interest accrues when you carry a balance, which could eat into the value of your cash-back rewards.
Note: Applications for the Rakuten Cash Back Visa are currently closed.
Rakuten routinely sends out emails which could be a simple way to pick up some extra money for your bank account. You can click on the email links to open a new window and activate cash back.
From there, you would shop the same as you normally would. It’s a simple way to get free money.
Shop Rakuten.com
You can also activate cashback offers through the Rakuten website. You can activate a Rakuten shopping trip by clicking banners or store links. And you can also check out coupons to save money at partner retailers.
You’ll also want to visit the Hot Deals section to browse coupons, promo codes and daily deals at partner stores. This is where you can find special limited-time offers and deals on everything from electronics to health and beauty products to travel.
All you need to do to find daily deals is type in the name of the store you’re planning to shop at in the search bar. You’ll get instant search results showing you whether there are any special offers available.
New member welcome bonus
All new members have the chance to earn a $10 Welcome Bonus. It’s not a lot of money but it is a nice incentive to create a Rakuten account.
To qualify, you just need to be a new Rakuten member and place a qualifying order of $25 or more within 90 days of joining. So if you’re planning to make a purchase online, that’s a great incentive to join Rakuten and make your first purchase.
Refer a friend
If you have friends or family members that you think would like Rakuten, you can refer them to the app to earn a little money.
Rakuten’s Refer A Friend program pays $30 each time someone you refer signs up and makes a qualifying purchase. Once you create a Rakuten account, you’ll get a special referral link that you can share via email or social media.
This is one of my favorite ways to earn cash back with Rakuten because you can get unlimited referral bonuses just for encouraging people to sign up.
How Does Rakuten Make Money FAQs
How does Rakuten pay me?
Rakuten offers two ways to get paid the cash back you’ve earned: a paper check (Big Fat Check) or a deposit to your PayPal account. If you opt to get paid via check, you’ll want to make sure your mailing address is correct under your account settings. Rakuten pays out cash back every three months and there’s a low $5 minimum to receive a payout.
Does Rakuten offer price matching?
Price matching can work in your favor if you find a better price on something you bought else. Unfortunately, Rakuten does not offer any price matching. But it’s still possible to get the best deal on shopping with Rakuten if you’re applying cash back offers, activating coupons or taking advantage of daily deals.
Does Rakuten offer Black Friday deals?
Rakuten works with its partner stores to promote Black Friday deals and coupons so you can get the most cash back and savings possible on everything you buy. It’s a good idea to comparison shop the various deals available to find the best price on Black Friday shopping.
How much cash back can you earn with Rakuten?
The amount of cashback you can earn with Rakuten will depend on the deal. Generally, you can earn up to 40% cash back, depending on where you shop. It’s not uncommon to see individual deals ranging from 2% cash back to 15% cash back. So you could net some decent money back on purchases when you shop with Rakuten.
Do you have to pay taxes on Rakuten cash back?
Generally, the IRS views cash back 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.
Is there a downside to using Rakuten?
If there’s one part of Rakuten that’s a drawback, it’s the payment schedule. You’ll have to wait every three months to get paid. If you’re earning a lot of cash back through purchases or referrals, having to wait to get the money can be a little frustrating.
Final thoughts on how does Rakuten make money
This Rakuten review is designed to give you a better idea of how Rakuten makes money and how you can make money with Rakuten. The great thing about this form of cash back app is that you’re earning real cash, not points the way you will with other apps.
And 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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