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Are cash-back apps like Ibotta and Rakuten worth it?

With everything so expensive these days, it would sure be nice to get some cash back on your purchases.
Posted at 8:01 AM, Mar 18, 2024

With the cost of almost everything higher than ever, wouldn't it be nice to get some money back when you shop? You can, if you download some cash-back apps on your phone.

But they do come with some downsides, and some are better than others, depending on where you shop.

Gary Bookbinder recently signed up with Rakuten, one of the most popular cash-back apps, and says he started getting 1% to 10% cash back with many of his purchases.

"Rakuten pays you every three months," he said, "So I would probably get paid $300 or $400 every three months. So that's real money."

Cash-back sites allow you to earn a percentage of cash back on your purchases, and some even run price comparisons for you.

As Bookbinder learned, big purchases can mean big savings.

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Shopping expert shares pros and cons

Smart shopping expert Trae Bodge has several on her phone.

"I am a huge fan of cash-back apps. I use them all the time," she said.

But Bodge says you have to get in the habit of checking the apps, especially if you're in-store. The savings are not necessarily automatic.

"If you're not looking, you're leaving money on the table," she said.

Some cash-back sites are better in certain categories than others.

Bankrate.com compared them and said:

Rakuten is best for overall shopping.

Ibotta is best for groceries (though make sure your store participates).

Dosh is best for travel.

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Interested? You'll find these in the app store. Once you've downloaded the app on your phone, you just click on it and choose from dozens of popular stores, and start shopping.

But these apps come with downsides.  Bodge says there are cases where the deals you find don’t necessarily work

"But one may be 100% effective and then you'll be really excited that you've saved that money," she said.

Bookbinder says he had to appeal to get some promised rebates.

"You'll click through, you'll make the purchase, you'll cross all the t's and dot all the i's," he said. "But then you'll find in your records they don't have money for you."

For the greatest possible savings, Bodge recommends seeing how other shoppers rated an app before downloading, install a site’s browser extension so you’re notified about promo codes in real-time, and stack cash-back savings with rewards you already get from your credit card.

"Cash-back is stackable in most cases," she said.

Best of all, signing up is free, so there is no expense to giving them a try.