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Thank you to FreeShipping.com for sponsoring this post. FreeShipping.com is a rewards program where members earn 10% cash back at over 1,000 retailers every day. 

Get paid to shop. Earn money on purchases you were going to make anyway. These are the promises of cash back and online shopping rewards programs. Do they deliver? Yes. Are the payouts enough to warrant changing your shopping habits? Yes, if you work the system right. 

Cash back and online shopping rewards programs pay you cash, gift cards, shopping credits, or free product in return for purchases you make. Based on personal experience, the value of these rewards is commonly 1% or 2% of your purchase totals. But you can earn far more with the right programs and strategies. 

Source: Canva.

1% cash back  may not be motivating, especially if you must shop differently to get it. But how about a 10% or 12% payback on your purchases? That’s a more compelling number. So let’s explore how cash back programs work, which types pay the best, and strategies to maximize rewards and earn 10% or more every time you shop online. 

Understanding cash back programs 

Cash back programs reward you for buying things. Often, the reward is calculated as a percentage of your shopping total. When you complete a qualifying purchase, your rewards account is credited according to the program’s terms. 

Some programs use reward points which can be redeemed for cash, store credit, account credit, gift cards, or merchandise. Other programs reward you directly in cash, which can be sent to you as a check, PayPal payment, or bank transfer. 

Types of cash back programs 

The type of cash back program often dictates what purchases qualify for rewards, how much you can earn, and how fast you can redeem your rewards. Five primary types are online shopping portals, data apps, credit card programs, store loyalty programs, and hybrid programs. 

Pro-tip: Understanding the types of rewards programs helps you identify opportunities to earn multiple rewards on the same purchase. 

Additionally, online shopping rewards can be paid memberships or free to join. Paid memberships typically have richer benefits than free programs. Amazon Prime, Walmart+, and FreeShipping.com are popular paid programs.

The table below summarizes how different types of cash back programs work. A more detailed discussion of each follows. 

Program Type How to Earn  Typical Earnings Online shopping portal Make purchases with partner retailers through the portal to earn a percentage-based cash back. 1% to 15% cash back on purchases made through portal. Paid memberships offer higher, more consistent rewards. Data apps Share purchase data to earn small rewards. Up to $0.01 to $0.025 per purchase. Cash back credit cards Use the credit card to earn rebates of 1% to 5%. Some cards offer a flat percentage on all purchases, while others have higher percentages for certain types of purchases, such as hotel stays. 1% to 5% of purchases made with the card Store loyalty programs Shop in a specific store to earn rebates on your purchases.  Varies. Some programs offer perks like free shipping and gifts. Others have a point system with earnings usually amounting to 1% to 2% of purchases.Hybrid Hybrid programs may require you to shop a specific retailer while using a specific credit card. 1% to 5% of purchase value, often along with other perks.  Online shopping portals 

Online shopping portals reward you for making purchases with their network retailers. To earn rewards, you must access the portal’s application before completing the transaction. This usually involves visiting the portal’s website and clicking through to the retailer or using a browser extension to link your transaction to your account with the portal. 

FreeShipping.com is an online shopping portal featuring 10% cash back and rebates at more than 1,000 retailers, including budget shopping favorites Asos, Chico’s Off the Rack, and J. Crew Factory.

What to consider when evaluating free and paid online shopping portals: 

Speed and timing of rewards payouts. Paid memberships will offer faster purchase approvals and quicker payouts. FreeShipping.com pays rewards monthly via check or PayPal. Free programs can wait 45 days or more before approving rewards. Some sent payouts automatically each quarter. Others make no automatic payments, but instead require you to redeem rewards.  

Reward type. You can earn cash payments or points redeemable for gift cards. Cash is the more versatile option. 

Quantity and quality of retailers. You can maximize your earnings with a portal that partners with your favorite stores.

 Process for reporting missed transactions. Sometimes transactions made through the portal don’t appear in your account or are declined for rewards. This is problematic if you made a purchase decision because you expected a big reward. Before joining an online portal, verify there is a process for reporting missed purchases. 

Consistency and value of rewards. FreeShipping.com pays a minimum 10% cash back on all qualified purchases – sometimes up to 20% cash back during seasonal shopping holidays! Free providers typically have fluctuating rewards of 1% or more.

Data apps 

Data apps reward you for sharing your purchase data. They collect the data by connecting to your bank accounts or accepting receipt uploads. Some offer other earning opportunities, such as shopping portals and rewards-based games. 

What to consider when evaluating data apps: 

Ease of use. Look for apps that make earning easy. Your time is too valuable to spend three hours playing a game or watching ads to earn $0.01.

Minimum payout and redemption fees. Payouts should be low — say, $10. And you should not pay redemption fees. 

Data privacy. Data apps collect a lot of information from you. They might encourage you to link your bank accounts and your shopping accounts. Some offer to maximize your earnings by tracking your location. Consider how much information you want to share and if the earnings are worth it. 

Use of advertising. Data apps have a heavy advertising component, which can be mind-numbing. For example, you may need to watch an ad to upload a receipt or request a payout. 

Credit card cash back 

Cash back credit cards rebate a percentage of your purchases. Some cards offer a flat percentage, such as 1% or 2%, on every purchase. Others have a tiered structure. For example, you might earn 1% on grocery purchases, but 3% on gas. 

What to consider when evaluating cash back credit cards: 

Annual fees. Opt for cards with no annual fee. 

Cash back percentage and structure. Flat-rate reward structures tend to produce the highest earnings, especially when the rate is 2% or 2.5%. 

Ease and speed of redemption. Ideally, the card will allow you to apply your earnings as statement credits. Some also allow you to deposit your earnings as cash in a linked bank account. If the card offers other redemption methods, check the conversion rate before you proceed. As an example, Citi will prompt you to use your rewards for purchases at Walgreens and certain gas stations. However, the value assigned to the points in this application is less than if you redeemed for a statement credit.  

Store loyalty programs 

Store loyalty programs offer rewards based on your shopping activity with that store. Some programs offer flat-rate rewards, while others give you perks without disclosing an earnings formula. 

• The loyalty program for athleisure brand Athleta earns 1%. You get 1 point for every $1 you spend, and each point is worth $0.01. The rewards are shopping credits, redeemable at Athleta and sister stores Gap, Banana Republic, and Old Navy. 
• The rewards program for bakery chain Panera offers occasional free bagels or beverage discounts, without telling you exactly how you earn them. Once you meet some unknown threshold, the rewards appear in your account. 

What to consider when evaluating store loyalty programs: 

How often you shop at that store. You cannot accumulate measurable rewards at stores you only shop occasionally.  

Earnings structure. Clear earnings formulas help you make better purchase and budgeting decisions. On the other hand, the Panera model can be more fun because each reward is a new surprise. 

Rewards expiration. Rewards should be active for an extended period, so you have time to use them. 

Hybrid 

Hybrid shopping rewards programs have broader rewards and redemption opportunities. They are usually paid memberships or require you to use a specific credit card. Examples include Amazon Prime, Walmart+, and Macy’s Star Rewards Silver, Gold, or Platinum. 

What to consider when evaluating hybrid rewards programs: 

Cost vs. value. Amazon Prime gives you free shipping and streaming content — but these are only valuable to the extent you use them. If the program has a membership fee, evaluate the fee next to the value you expect to receive. 

Ease of redemption. Cash, statement credits, and gift card rewards are the easiest to redeem. Avoid programs that require you to buy something to redeem rewards.

How to maximize your online shopping rewards 

Three strategies can maximize your online shopping rewards: consolidate purchases, stack rewards, and optimize your payouts. 

Consolidate purchases 

Prioritize your rewards memberships as you shop. For example, if you are a FreeShipping.com member, use that membership for every online purchase you can. 

Stack rewards 

You can earn rewards from your online shopping portal, credit card, and store loyalty program at the same time. For example, you can shop Athleta via FreeShipping.com and pay for the purchase with your Citi Double Cash Card. Here are the numbers on a $500 purchase: 

You may earn $50 from FreeShipping.com or 10%. 

You earn 500 points, worth $5, from Athleta. 

You earn $10 cash back from your Citi card or 2%. 

Your cash rewards from FreeShipping.com and Citi total $60 or 12%. The $5 Athleta credit is only valuable if you use it on something you would have bought anyway. Include that and your total earnings are $65 or 13% of the original $500 purchase. One risk to note is that stacking certain coupons or multiple cash back programs may cause one or more of your rewards not to track. 

Optimize payouts 

The way you collect cash back rewards can affect how much value you get. Some strategies to maximize your reward value include: 

If you have a choice, opt for cash rewards or credit card statement credits. You can use cash and statement credits to reduce the cost of your purchases. 

Redeem for gift cards cautiously. Some retailers don’t allow you to combine a gift card payment and a credit card payment for the same purchase. That means you can only use a gift card when its balance covers your entire purchase. Worse, you often up with a small, random balance on the card that never gets used.  

Don’t redeem to buy. Rewards that require you to make another purchase are less valuable. Old Navy Super Cash is an example. 

Save 10% on online purchases 

Routinely saving 10% or more on your online purchases is one way to manage inflation and a slowing economy. To do it, join the right programs, consolidate your purchases, stack your rewards, and choose cash redemptions whenever possible. 

As a last step, track your rewards across programs. It’s surprising and motivating to see how much you can earn over time. 

About FreeShipping.com 

FreeShipping.com is a paid membership program that pays consistent 10% cash back on purchases made through the FreeShipping.com network of 1,000-plus merchants. During special seasonal promotions, members can even earn as much as 20% cash back on their purchases.  FreeShipping.com members also have built-in price protection on their network purchases and earn cash rebates on their costs for shipping, return shipping, and food delivery.

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