Saving money every month is a challenge for many people, especially when it seems like every expense is necessary. The rising costs of living, rent, utilities, groceries, and daily needs can make it feel impossible to put money aside without sacrificing your current lifestyle. However, there’s an often overlooked solution that lets you save money on the things you already buy—without needing to cut back on your spending: cashback apps.

Cashback apps have grown in popularity over recent years as they provide consumers with a unique way to earn money while shopping. Rather than offering discounts upfront, these apps allow you to make purchases as usual and receive a percentage of the total spent back in the form of cashback. The premise is simple, but the potential savings can be significant if you use these tools effectively.

What Is a Cashback App?

A cashback app is a mobile application or browser extension that rewards users for making purchases through the app or its affiliated retailers. When you make a purchase through the app, a portion of the money you spend is returned to you, typically in the form of a cashback percentage. This can range anywhere from 1% to as high as 30% depending on the app and the retailer.

Some of the most popular cashback apps include Rakuten, Honey, and Ibotta, each offering a slightly different approach to earning rewards. Rakuten partners with thousands of retailers and provides cashback on both online and in-store purchases. Honey, known primarily as a coupon-finding browser extension, also offers a cashback program called Honey Gold. Ibotta focuses on grocery stores and everyday shopping, providing cashback on specific items that users can redeem after purchase by scanning their receipts.

While each app works slightly differently, the general concept remains the same: you buy the products you would already be buying, and in return, you get a portion of your money back. Over time, this can add up to substantial savings without the need for budgeting cuts or lifestyle changes.

How Do Cashback Apps Work?

The process of earning cashback is straightforward. Once you’ve downloaded a cashback app, you typically need to create an account and start shopping through the app or its affiliate links. Here’s a breakdown of how cashback apps generally work:

Sign Up: You download the app and create an account.

Browse Deals: Most cashback apps will list retailers and deals on their platforms. You can browse through these to find stores where you want to shop. Some apps offer higher cashback percentages during promotions or on specific products.

Make a Purchase: Once you’ve selected the retailer or product, you make your purchase either through the app or by visiting the store after activating the deal in the app.

Earn Cashback: After completing the purchase, the app tracks your transaction and credits your account with a cashback percentage.

Cash Out: Once your cashback earnings reach a certain threshold (often $10 or $20), you can withdraw the funds to your bank account, PayPal, or redeem them for gift cards.

The revenue for cashback apps comes from affiliate marketing. When you buy something through their platform, the retailer pays the cashback app a commission. The app then shares a portion of this commission with you in the form of cashback, creating a win-win situation for both the app and the user.

The Efficiency of Cashback Apps

The biggest advantage of cashback apps is that they allow you to save money on purchases you were already planning to make. Unlike traditional discounts or coupons, you don’t need to go out of your way to find deals or change your shopping habits to benefit from cashback apps.

Additionally, most cashback apps are free to use, making them a cost-efficient way to save money. Users can simply install the app or browser extension, set up their accounts, and begin shopping. For consumers who shop online frequently, using them regularly can result in significant savings over time.

For example, let’s say you spend an average of $500 per month on online shopping and everyday essentials like groceries, clothes, and electronics. Using an app that offers an average of 5% cashback on these purchases could earn you $25 per month or $300 per year. This is money you would not have had otherwise, and it requires no additional effort other than using the app when shopping.

Another important efficiency of cashback apps is that they often combine with other savings methods. For example, if you have a cashback credit card, you can stack the rewards from your card with the cashback from the app, maximizing your savings. Similarly, cashback apps can sometimes be used in conjunction with coupon codes, allowing you to benefit from both discounts and cashback.

Different Types of Cashback Apps

There are various types of cashback apps that cater to different shopping habits and preferences. Understanding the different categories can help you choose the right one for your needs.

General Cashback Apps: Apps like Rakuten and TopCashback offer cashback on a wide range of retailers, from big-box stores to niche online boutiques. These apps are best for those who do most of their shopping online across various retailers.

Grocery Cashback Apps: Apps like Ibotta and Fetch Rewards focus on grocery stores and everyday shopping needs. With these apps, you can browse specific deals, such as getting $1 back for purchasing a certain brand of cereal or 10% back on a beverage purchase. These apps are great for families or individuals who want to save on food and household items.

Retailer-Specific Cashback: Some stores and brands have their own cashback programs or partner with apps to offer exclusive rewards. For example, stores like Walmart, Target, and Amazon have partnerships with cashback apps, offering extra rewards to users who shop with them.

Coupon and Cashback Hybrids: Apps like Honey and Capital One Shopping primarily focus on finding coupon codes and deals but also offer cashback opportunities. These are ideal for users who want the convenience of automatic savings in addition to cashback.

Bank and Card-Based Cashback: Some cashback programs are tied to specific banks or credit cards. These programs reward you with cashback on every purchase made using their card, and sometimes they offer extra cashback if you shop with their partner merchants.

How Much Can You Really Save?

The amount of money you can save through these apps depends largely on how often you use them and where you shop. Some people report earning a few dollars a month, while others who shop frequently or make large purchases can save hundreds of dollars annually.

For instance, users of Rakuten have reported earning hundreds in cashback over the course of a year, especially during major sales events like Black Friday or holiday shopping. The app frequently offers increased cashback percentages during these times, allowing shoppers to save more than usual.

Grocery cashback apps like Ibotta offer smaller, more incremental savings—often ranging from 25 cents to $2 per item—but these savings can add up quickly if used consistently on weekly grocery runs. Some Ibotta users have reported saving upwards of $300 a year just by taking a few extra minutes to scan their receipts after each grocery trip.

Are There Any Downsides?

While cashback apps are a great tool for saving money, they do come with some limitations. One potential downside is that they may encourage unnecessary spending. When browsing cashback deals, you might be tempted to buy things simply because of the cashback reward, even if you didn’t originally plan to purchase the item. It’s important to stay disciplined and use cashback apps only for items you genuinely need.

Another limitation is that not all stores or brands offer cashback, so you won’t always be able to save on every purchase. Additionally, the time it takes for cashback rewards to appear in your account can vary. Some apps may credit your account within a few days, while others may take weeks or even months, especially for large purchases or travel-related bookings.

Conclusion: A Hassle-Free Way to Save

This world where saving money often seems synonymous with cutting costs, these apps provide a refreshing alternative. By simply shopping as you normally would and using these apps, you can effortlessly earn money back on your purchases. Whether you’re stocking up on groceries, buying new clothes, or even booking a vacation, cashback apps offer an easy and efficient way to save each month without having to make any drastic lifestyle changes.

The key is to use these apps strategically, ensuring that you’re not overspending or making unnecessary purchases just for the sake of earning rewards. But with discipline and consistency, these apps can become a powerful tool in your financial arsenal, helping you keep more of your hard-earned money without the need for sacrifices.