What are cash back apps?

For many U.S. adults, cash back rewards are one of their favorite perks.¹ And with cash back apps, shoppers can search for specific cash back opportunities to match their needs.

Whether shopping for paper towels or the latest electronic gadgets, using cash back apps can potentially help people increase their savings and earn cash back rewards on a range of eligible purchases.

How cash back apps work

Cash back apps aim to incentivize people to shop through their platform, allowing them to earn a small amount of cash back for every eligible purchase they make.

Here’s how cash back apps typically work:

• Pick a cash back app: Download and install a cash back app. Some apps are solely focused on cash back deals, while others may offer it as part of their suite of products. For example, payment providers or platforms may offer cash back capabilities. Alternatively, some apps may have websites that are available for use instead of or in addition to a mobile app.
• Create an account: Open the app and create an account. This will usually involve general personal information, such as name, email, and address.
• Browse possible offers: Browse the app to discover cash back offers and discounts from partner retailers. These offers may be sorted by category or store.
• Select an offer: Choose an offer. It could be a specific product, store, or category with a cash back percentage clearly mentioned.
• Shop through the app: Click on the offer to be redirected to the retailer's website or app.
• Complete purchase: Add items to the cart, enter payment information, and check out.
• Earn cash back: After a purchase is confirmed, the cash back amount — which is typically a small percentage or amount of the total cost — should be credited to the person’s account. This amount may not be immediately available — timing may vary depending on the provider, amount purchased, and more.
• Redeem or withdraw: People can typically choose how to use their earned cash back. Options may include transferring it to a bank account, redeeming it for gift cards, or using it for future purchases through the app.

Types of cash back apps

There are several types of cash back apps. Some may cover a range of categories, stores, and products, while others may be more focused on specific types of purchases. Here are some examples:

• Cash back grocery apps offer cash back on eligible grocery purchases or products.
• Travel cash back apps let users earn cash back or rewards for booking flights, hotels, car rentals, and other travel-related expenses.
• Cash back restaurant apps focus on offering rewards when ordering from certain restaurants, cafes, or food delivery services.
• Cash back gas apps aim to give users the ability to save money on purchases made at specific gas stations.
• Cash back retail apps may compile offers for various retail stores, from clothing to technology to everyday household items.
• Digital wallets: Digital payment platforms may offer cash back or rewards — such as PayPal Rewards — for using their services at partner merchants.
• Browser extensions: Browser extensions like the PayPal Honey shopping extension may automatically apply cash back offers and discounts when users shop online.

Potential pros and cons of cash back apps

Before downloading cash back apps for shopping, consider some potential pros and cons.

Here are some possible benefits of apps that give cash back:

• Savings and discounts: Cash back apps generally provide a way to save money on eligible purchases. Sometimes cash back apps also offer additional discounts when shopping through their platform specifically.
• Easy to use: These apps may offer a convenient way to access deals and rewards, often encompassing numerous offers from different retailers in one place.
• No extra costs: Using these apps is typically free, and fees are normally not involved when redeeming cash back. Be sure to review the app or provider’s terms to be aware of any potential fees.
• Cash or gift cards: Individuals can often choose how they want to redeem their earnings, whether as cash deposited into their bank account or as gift cards to available stores.

Potential disadvantages of cash back apps may include:

• Privacy: Some cash back apps may collect and share personal data and purchase history with third parties. It's important to review an app’s privacy policy before shopping.
• Limited retailers: While major retailers often participate in cash back apps, some apps may not include every type of store.
• Expiration dates: Offers and cash back rewards may have expiration dates. Additionally, it’s possible that expiration dates could create urgency to spend. Shoppers should avoid making a purchase just to use an offer before expiration. It’s key to only spend within one’s means and keep personal budgets in mind when shopping.