What is Ebates and How Does It Work?

Day in and day out, we are surrounded by advertisements for so many things.  Cars, food, clothing, entertainment... the list goes on and on.  Wouldn't it be nice if advertisers compensated you for your time and energy spent consuming ads and buying stuff?  Well, that's exactly what Ebates.com does!

So what exactly is Ebates?

Ebates (www.ebates.com) is a website that features promotional codes and discounts for online stores.  It also features an affiliate revenue-sharing plan for its users.  It allows its users who visit online stores through Ebates to earn cash back on their purchases, which Ebates then pays out to its users quarterly.

"Cash back" basically means that Ebates takes the advertising money that they earn from referring you to a shopping website, and they pay you a portion of it equal to a percentage of how much you spent while shopping.  This makes Ebates different from other coupon and discount websites, such as Groupon.com, Woot.com, and WagJag.com. They point you towards sales, discount coupons, and deals-of-the-day, but they keep all of the advertising revenue from you using them to find what you're looking to buy.  Ebates, on the other hand, shares the wealth. Some of their popular competitors are: Swagbucks.com, MrRebates.com, and Quidco.com

How does Ebates make money?

In a nutshell, Ebates makes money by referring people to shopping websites in order to buy things, thereby earning advertising revenue.  They also offer to pay some of their advertising revenue back to site users, which encourages them to keep shopping through Ebates, which makes Ebates more advertising money.

To explain further, we'll briefly discuss affiliate advertising and affiliate revenue-sharing.

What is affiliate advertising?

Affiliate advertising is when a non-store website provides special hyperlinks to another website that's running a store.  These hyperlinks tell the store website that they are coming from the non-store website.  So, when a person clicks on those hyperlinks and makes a purchase on the store website, the store website pays a commission to the non-store website for bringing in customers for them.

To illustrate, imagine two websites: website X and website Y.  Website X runs a store, and website Y does not.  However, website Y contains hyperlinks that lead to website X.  A person comes to website Y and clicks on the hyperlinks that lead to website X, and then buys something at website X.  Website X then pays a percentage of how much the person spent to website Y as an advertising fee, since it was because of website Y that the person found and spent money on website X.

Another visualization of it looks something like this, from a shopping website's perspective:

Ebates affiliate marketing model example
(Image source: Lotus Digital Consultants)

Click here to learn more about affiliate advertising and how it works.

What is affiliate revenue-sharing?

Affiliate revenue-sharing is a strategy that some websites use in order to make their advertising more valuable, and thus earn more money off of it.  Basically, they do this by offering to share some of the affiliate advertising revenue that they earn with people who are using the website.  The idea is to get people to come back to a particular website and use it to find other websites to shop on.  With more people being funneled through a particular website in order to find shopping websites and buy things, that particular website becomes a more lucrative advertising partner, and thus ends up earning more advertising revenue.

A slightly more technical explanation of revenue sharing, and how it applies in both business and beyond, can be found here.

How Ebates works: 4 steps to earning cash back on online shopping

1. Set up your free Ebates account

Getting started with your Ebates account is free, and it takes very little time at all.  You can sign up through your Facebook or Google account, or you can simply enter an email address and password.  It's up to you!

Signing up for Ebates in various ways

2. Choose how you want to get paid through Ebates

Once your Ebates account is set up, you'll need to enter your address so that Ebates knows where to send all that cash back that you've earned!  After you do, you can choose whether to get a cheque in the mail, or have your money sent to your PayPal account!

Payment options from Ebates

3. Select a store (and deal) on Ebates that you want to shop

Ebates is affiliated with over 1500 different online retailers, so you're bound to find one that you like to shop at AND can earn cash back with!  Plus, Ebates often lists other promotions that are going on at the website, so you're sure to save even more money!

Choosing an Ebates affiliated store or deal

4. Shop through Ebates and save!

Once you're redirected to a shopping website through Ebates, just shop as you normally would.  When you check out, a percentage of what you spent will be added to your Ebates account within a week.  Then, four times every year, you'll get a cheque in the mail or on your PayPal account.  That's all there is to it!

Starting your shopping through Ebates

What stores can I get cash back for with Ebates?

Ebates has over 1500 stores at which you can earn cash back when you shop through them!  Here is a sample of some of the most popular stores on Ebates per category:

CLOTHING: Macy's, Kohl's, Nordstrom, Ralph Lauren, Calvin Klein, Saks Fifth Avenue, Land's End

HEALTH AND BEAUTY: Philosophy, Bobbi Brown Cosmetics, Sephora, MAC Cosmetics, Estee Lauder

HOME AND GARDEN: Wal-Mart, Pier 1 Imports, J.C. Penny, iRobot

SPORTING GOODS: Eastbay, Finish Line, Golfsmith, MyProtein, Columbia Sportswear

BOOKS AND MEDIA: Kobo, Magazines.com, Rosetta Stone, Better World Books, Textbook Underground

For a full list of stores that you can find deals and cash back for through Ebates, click here.

When do I get my money from Ebates?

Ebates sends out cheques quarterly, so if the following information will show you when you get your cheque based on when you've shopped.  Note that if you haven't earned at least $5.01, your cash back will be carried over to the next period until you earn at least that much.

January 1st - March 31st: paid on May 15th

April 1st - June 30th: paid on August 15th

July 1st - September 30th: paid on November 15th

October 1st - December 31st: paid on February 15th

 

That's a brief introduction to Ebates and how it works!  We've also explained what affiliate marketing and revenue sharing is, and given you an overview of some of the stores that you can get cash back at with Ebates.  Next, we'll review the pros, cons, and legitimacy of eBates.

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