How Does Rakuten Make Money if They Pay You to Shop?

Saving money today is something most people not only want to do, but must do. Today’s higher cost of living makes me look at every possible way to save money, and using Rakuten is one of my favorites.

With Rakuten, you can get up to 40% back on your purchases from thousands of stores. The web platform and its mobile app grew in popularity over the past years and have helped its users get cash back on many purchases.

But how does Rakuten make money when its app is entirely free to use? I explore the answer to this question before diving into making your own money on the platform.

What is Rakuten?

Rakuten is a shopping rewards company offering a mobile app and a web platform that could help you save money on everyday purchases by paying you cash back or rebates on your in-store or online purchases.

The good news is that Rakuten isn’t new; they’ve been around since 1997 when it launched as Ebates. The company was renamed in 2014 to Rakuten and today has over 20 million members and has paid $3.2 billion in cash back.

I use Rakuten as often as I can when I shop and find it incredibly easy to save money or earn cash back on my purchases.

Learn more about the company in our Rakuten review.

Companies similar to Rakuten

How does Rakuten work?

The Rakuten app or website is easy to use, and only requires one extra step from me when shopping. Instead of going directly to the store I want to purchase something at, I must log into my Rakuten app or online portal and find the store I want and then shop. This is how Rakuten tracks what I buy and pays me cash back for eligible purchases.

The stores I visit through the Rakuten app pay Rakuten a commission for each purchase made. Rakuten then shares the commission with shoppers like me. I’ve been a member since 2018 and my lifetime earnings are $919.39.

It takes only a few seconds to sign up for a membership and you can immediately use Rakuten to shop at more than 3,500 stores. The amount of cash back you receive through the platform differs depending on the participating business and might range from 1-40%. For example, right now they’re offering 4% back at Petsmart, 10% at Under Armour, and 4% back at Ruggable.

Rakuten also offers special deals at select stores. You can use the offers to get both discounts and cashback on your purchases. For example, at Petsmart there are various departmental coupons plus you can earn 10% cash back on your entire purchase.

How does Rakuten make money?

Rakuten primarily makes money through a type of marketing known as affiliate marketing. Affiliate marketing is a legitimate business practice where one company, or affiliate, earns a commission for promoting the products or services of another company.

Don’t worry, this isn’t a scam; it’s a common method companies use to boost sales. Think of it like a salesperson’s commission except the retailers pay it to Rakuten versus a single person. Rakuten then shares a percentage of that commission with shoppers like you and me.

Here are the top ways Rakuten makes money.

Clicks and purchases

Rakuten operates as an affiliate of 3,500+ retailers. When a shopper clicks a link to visit a store through the Rakuten online portal or mobile app, Rakuten earns a commission in one of three ways:

• Pay-per-click (PPC): When you visit the website of a Rakuten partner through the Rakuten website or Rakuten app, Rakuten earns a small commission by you clicking through to the partner website.
• Pay-per-sale (PPS): If you buy something from a Rakuten partner, Rakuten earns a commission percentage of the sale. Rakuten earns the most money through this method because it results in a sale.
• Pay-per-lead (PPL): Businesses are as interested in getting your contact information as they are in selling you something. That’s why some Rakuten partners pay the company a commission when members sign up for future promotions.

Unlike most affiliate marketers who keep that commission, Rakuten shares some of the earnings with its members.

Selling marketing data

Rakuten won’t ever sell your personal data to another company. However, Rakuten does keep track of all the transactions with its partner businesses. Marketing agencies buy that data from the platform and use it to help build advertising campaigns for their clients.

How much money does Rakuten make?

Rakuten’s parent company, the Rakuten Group, reported a revenue of $14.1 billion in 2023. This means that the company made $38 million a day in revenue on average last year, which is 7.8% growth over the previous year.

The publicly traded Japanese company operates several business models in internet services, fintech, and mobile applications. All three segments saw significant growth in 2023.

How to make money on Rakuten

Now that you know how Rakuten makes money and that it’s legit, you likely want to know how you can make money on Rakuten.

Fortunately, Rakuten offers several ways to make money, such as cashback rewards, discounts, and promotions. These benefits might help you determine how to manage your money and make your cash go further.

Here’s how to get the most out of your Rakuten membership:

• Get cashback rewards. Instead of purchasing directly from Macy's, Walmart, Nordstrom, Target, or Kohl’s, first check if your favorite stores are among Rakuten’s thousands of partners. If they are, you could activate the cashback offers by visiting their websites through the Rakuten online portal or mobile app.
• Use discounts and promotions. Some Rakuten partners offer special discounts or promotions to Rakuten members. These discounts might be for a limited time or only for first-time users, so double-check the fine print.
• Use the cash back button. If you do most of your online shopping from your computer, you might benefit from downloading the Rakuten browser extension. This extension automatically applies the available coupons at checkout.
• Link your credit card. You don’t have to be an online shopper to get rewards. You could also earn store cash back when you shop in brick-and-mortar locations of some businesses by linking a credit card to your Rakuten account.
• Earn referral bonuses. If you enjoy using Rakuten, you could earn more money by referring friends to sign up. Rakuten makes it easy to refer friends by providing a unique link you could send to friends or post on social media.
• Apply for the Rakuten Cash Back Visa: If you check out using your Rakuten Cash Back Visa, you can earn an additional 3% back on purchases made through Rakuten (in addition to any cash back earned in the app or online), or 1% on all other purchases.

How does Rakuten pay rewards?

Here’s the downside of Rakuten that I’ve found. You only get paid once per quarter. While it’s not the end of the world and I kind of like it because it forces me to save my rewards, it’s different from most other cashback apps that let you cash out whenever you want.

You can choose whether you receive the payout as a paper check — called the Big Fat Check — or as a deposit in your PayPal account. To get paid via PayPal, you need a PayPal account associated with the email address you used to sign up for Rakuten.

FAQs

Bottom line

Rakuten is a legitimate business that enables you to earn cash back when shopping at online stores through its marketplace portal or by linking your credit card for in-person purchases.

Rakuten uses an affiliate marketing business model to make money whenever you visit or buy from one of its partners. As a thank you, Rakuten gives a portion of its earnings to members in the form of cashback rewards.

Although using Rakuten might not make you rich, it could help you figure out how to save money on everyday purchases to improve your personal finance and budgeting skills.