Cashback Apps: Be Sure You Know What You’re Getting Into!

BBB Consumer Alerts

Scanning a QR code from a receipt. Smartphone app for online expense tracking. Budget and Personal Finance App. Frugal living, saving money

(BBB) – If you are looking for new ways to save money on daily purchases, the latest trend isn’t clipping coupons; it’s cashback apps.

By using apps such as Rakuten and Ibotta, shoppers can earn rewards, such as cash or gift cards, after making a purchase.  But before you sign up for one or more of these apps, be sure to do your research.

How do Cashback Apps work?

Some cashback companies build relationships with stores and brands and receive a commission for purchases made through their apps and extensions. Then, they pass on a portion of the commission to the consumer. Other companies offer payouts based on accumulated points, which consumers can earn uploading receipts, purchasing specific products, or scanning products in store.

Many such apps and browser extensions are legitimate, but, as always, exercise caution when any company promises big rewards for minimal effort.

To find and use cashback apps safely, BBB recommends the following tips:

  • Get to know the company behind the app or browser extension. Before you install a cashback program on your phone or browser, find out more about the company that runs it. Look the company up on to see its business rating and read consumer reviews and complaints.
  • Choose an app that fits your shopping patterns. The way apps reward consumers can vary. Some offer coupons or price comparisons to help you find the best deal. Passive cashback apps simply run in the background on your phone and track your purchases, giving you rebates when you shop at partner locations. Other apps reward you for shopping at specific retailers. Think about your shopping habits as you chose an app or extension to score the most savings.
  • Never pay a membership fee. You should never have to pay a fee to receive “free” money. Be wary of any app that claims to be free but asks you to pay a fee to receive a payout. Don’t agree – it could be a scam.
  • Read the fine print. Most apps require you sign up for a free membership before you can receive rebates. Read the fine print before you commit to make sure you understand what personal information you will need to share, how the app works, and how it tallies your purchases and rewards.

Protect your privacy. Keep in mind that since many cashback apps ask you to connect your credit card, debit card or bank account to receive rebates and make purchases, keeping your data safe is critical. Before sharing your sensitive information with any company, FTC suggests reviewing the company’s privacy policy.

Find out how payouts work. Nerd Wallet reminds consumers that payout methods can vary from company to company. Do a little research to find out what the company’s payout frequency and threshold is, as well as their payout method and qualifications.

Avoid unnecessary spending. Take advantage of good deals on the products you need but remember that making unnecessary purchases just because you’ll receive points or modest cashback bonuses will not save you money in the long run. In addition, when taking advantage of a product-specific deal, The Penny Hoarder advises, “Read the offer’s fine print. Make sure you’re purchasing the correct brand and quantity.” If you purchase the wrong size or flavor product for example, the offer may not be valid.


To find a business you can trust, check out To report a scam, go to

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