While making a transaction by cash, or UPI is always a hassle, the lure of getting a cashback in turn makes the decision straightforward. But if they give away, what do they hold back?
Worshipping to Goddess of wealth, or wearing money magnet bracelet, or keeping something in your locker or wallet, or keeping a laughing Buddha on your office desk, or a crystal tortoise floating in water, or a fish aquarium – for ages people have listed so many things to attract wealth, but does it come that way? You cannot just go to a river, and wish from the angel of water to give you a golden axe! It’s not that easy. But earning a cashback is, in a stroke of luck!
Few days back I was ranting, and asked Google pay, to not give me MyGlamm coupons, or a discount on Fastrack sunglasses, or a Flat 72% off on Skullcandy headphones and earbuds, or a Flat 60% off on tees by fastrack sunglasses, or a Re 300 – Re 5000 off on Ixigo flights. What would I gain by that, if I don’t actually need it? But a Re 2 cashback, or a bumper lucky draw with a Re 100 cashback would work wonders.
Anything that is free works, especially in India. But there are no free lunches in this world, unless otherwise it is poisoned! Consider the positive side, we are redirecting you towards the way cashback apps earn. If they give away a part of someone’s earnings, they must be earning something too. Let’s understand where it comes from.
How do reward shopping apps operate?
Cashback apps earn money by partnering with retailers and receiving a commission, typically a percentage of the purchase price, for each sale generated through their app when users shop through their platform and link their payment methods; essentially, they act as an affiliate marketing platform, earning a cut of the sale from the merchant for directing customers to them. They earn via affiliate marketing where cashback apps promote products or services from other companies (retailers) and earn a commission for each successful sale made through their app’s link.
Such businesses negotiate higher commission rates with merchants/retailers in exchange for driving a large volume of customers to their stores. They incentivize users to shop more frequently by offering attractive cashback rates and rewards, leading to increased sales for merchants. Some cashback apps may also collect user data and use it for targeted advertising, generating additional revenue streams.
How does it happen in sequence?
Users typically need to link their credit card or other payment methods to the cashback app to track purchases. The app displays deals and cashback rates offered by various retailers. To earn cashback, users must click on the provided link within the app to access the retailer’s website. The app uses tracking cookies or codes to monitor which purchases are made through their links. Once a purchase is verified, the corresponding cashback amount is credited to the user’s account within the app. Users can typically cash out their accumulated cash back once it reaches a certain threshold, either through direct deposit to their bank account, gift cards, or other options.
Upside Scenario
Indicating a specific set of conditions, Upside app allows users to earn cash back on everyday purchases like gas, groceries, and dining at participating restaurants by essentially acting as a middleman between customers and businesses. How does upside make money then? It receives a commission from the merchants for each transaction generated through their platform; essentially, businesses pay Upside a percentage of the sale made through the app. Users browse deals on the app, select offers, make their purchase at the participating store, and then upload their receipt to claim their cash back. Upside generates revenue by partnering with various businesses like gas stations, grocery stores, and restaurants who pay a commission for each customer brought in through the app. It uses data to provide users with tailored deals based on their location and spending habits. The app is free to download and use, with users receiving cash back directly into their accounts.
Earning a Cashback is Not Easy. But Then Why Does an App Development Company Exist?
If you watch carefully, the apps earn in traditional ways, maybe via affiliate marketing, In-app advertising, loyalty programs, product partnerships, cross-platform promotions, referral programs, premium memberships, sponsored offers, and merchant partnerships.
Indulging into the nuances suggests that cashback apps primarily earn money through affiliate marketing, where they receive a commission from retailers for each sale generated through their platform when users purchase items using their provided links; essentially, they act as a middleman, promoting products from other companies in exchange for a cut of the sale price. (2) They establish relationships with various stores, offering users incentives to shop through their platform by providing cashback on purchases. (3) When a user clicks on a retailer’s link within the app and makes a purchase, the app uses tracking codes and cookies to accurately attribute the sale to their platform. (4) For each successful sale generated through their link, the cashback app receives a percentage of the purchase price as a commission from the retailer. (5) To entice users, cashback apps often offer higher cashback percentages on specific items or categories, which can further increase their potential earnings. (5) Some apps might earn additional revenue by running sponsored promotions or exclusive deals for brands within their platform. (6) By gathering user purchase data, cashback apps could potentially sell aggregated insights to retailers for marketing purposes. (7) Some app cashback apps may offer premium features with additional benefits (like higher cashback rates) for a subscription fee.
Situations Depending Upon the Context
- Candy Crush mobile game displays banner ads or full-screen interstitial ads while the user plays, earning revenue from advertisers. This is an example of in-app advertising. Starbucks Rewards offers points for every purchase, which can be redeemed for free drinks and other rewards as an example of loyalty programs.
- Many bloggers promote Amazon products with unique referral links earning a commission for every sale made through their link, for affiliate marketing. Nike collaborates with Apple to integrate Apple Watch fitness tracking with Nike’s running app, benefiting both brands. This sort of product partnership between two brands amplifies their visibility and accentuates the need.
- Spotify offers free trials of Hulu to its premium subscribers, promoting both services to each other’s audiences. Promoting another platform’s services on its platform leverages both and also increases community.
- Cashback apps like Rakuten offer users a referral link to invite friends. It allow users to earn a percentage of money back on purchases they make online at participating retailers, essentially giving them a small refund on their shopping by acting as an intermediary between the customer and the store, with the retailer paying a commission to the app for each sale generated through it; users can then withdraw their accumulated cashback as a payment to their bank account or through services like PayPal. Both the referrer and the referred user earn a reward, while Rakuten earns a commission from merchants.
- Netflix offers a paid subscription for ad-free streaming with access to exclusive content. They call it premium membership. Instagram influencers promote brands’ products (fashion or beauty) in exchange for payment or other compensation (sponsored offers).
- Uber Eats, Zomato, Swiggy partners with local restaurants, offering delivery services in exchange for a commission on the orders. This is called merchant partnerships.
- Facebook collects user data and sells targeted advertising opportunities to businesses based on users’ interests and behaviors. This is for monetizing data.
Essential Message
Mobile App development company that designs cashback apps, and employs monetization models such as affiliate marketing, referral programs, and sponsored offers to generate revenue. As discussed earlier, how Upside makes money Upside makes money by partnering with gas stations and retailers, earning a commission from each purchase made through the app while offering users cashback incentives.