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If you’ve done any sort of research into how to save money on your groceries, then you’re almost guaranteed to have heard of Ibotta. But for many of us, getting cash back on what you’re buying anyway seems too good to be true.

This is why it can be worth clarifying questions like how does Ibotta work, as well as how does Ibotta make money. By understanding things like this, you’ll be able to see exactly why you should be using this app to save yourself a ton of cash.

And getting that pretty incredible free $20 welcome bonus from Ibotta is a great place to start. Sign up for Ibotta here to grab that while you can.

How does Ibotta work?

Ibotta works by getting its users cash back on literally thousands of items. By purchasing things you’d already be buying at more than 1,500 brands and retailers, you will automatically get a portion of what you spend back as cash.

This includes:

  • Groceries
  • Alcohol (yes, really)
  • Medicine and other pharmaceutical products
  • Clothes
  • Beauty and wellness items
  • Travel 
  • Electronics

Getting started is also crazy simple.

Ibotta app cash back example from shopping


Free sign-up bonus: $20

Ibotta’s a completely free app that gives you cash back on what you’re buying already – groceries, medicine, clothes and more.

In fact, users make $150 per year on average – not including your free $20 welcome bonus – with over $682 million having been paid out, so you know Ibotta is definitely legit.

1. Sign up for Ibotta (and get your $20 bonus)

The first step is to sign up for Ibotta, which will only take you less than a minute.

The best part of this is that if you sign up through this link, you’ll get $20 for free.

2. Download the Ibotta app

The Ibotta app is where the real action happens. It lets you easily see what deals are on offer at your favorite stores, which you can also select to make it simpler for you to find these in future.

For example, if you know you need to go buy some vitamins from Walgreens, check the Ibotta app before you go to the store to see which brands have cash back offers this week. That way, you can make sure you keep an eye out for that brand when you get to the store to take advantage of the offers, instead of paying full price.

3. Add the Ibotta Chrome extension

You can also use Ibotta to save money with online shopping, which is made super straightforward by installing the Ibotta Chrome extension. A link to this can be found on the Ibotta home page

Once you’ve installed it, you simply login to your account through the extension. Then, whenever you’re on a site that’s an Ibotta partner, like Amazon, you’ll receive an alert that there are deals available for you.

screenshot showing how does Ibotta work on your computer and phone

All you do then is press “Activate” in the box that will appear if you’re interested. Then, if you purchase something through that page, Ibotta will automatically send the cash back that you earn to your account.

Related: 13 Sites Where You Can Test Websites for Money

4. Link any store loyalty cards you have

By linking any loyalty cards you have with Ibotta’s partner retailers, your account will automatically be credited with your cash back whenever you shop at those stores and swipe your loyalty card.

5. Scan and upload the receipt when you shop in-store

If you shop anywhere that doesn’t have a loyalty program, you absolutely won’t miss out on getting money back.

Instead, all you have to do in those cases is use the Ibotta app to scan your receipt. Make sure you do this as soon as possible after you go shopping as you only have a week to claim the cash back after the date on the receipt (but also so you don’t lose it!)

After a few days, check your account and your cash back will be there.

(And if you’d like step-by-step instructions on how to do this, check the Ibotta website for these.)

And seeing as you’ll be walking around the store, why not check out: 17 Legit Ways to Get Paid to Walk

6. Cash out your Ibotta earnings

Ibotta is extremely flexible in how to cash out your earnings. Simply put, there are two ways to get this:

  1. Withdraw your earnings and send them to your PayPal account
  2. Use the app to purchase a gift card

The first option is essentially the same as getting straight up cash, as you’re then able to transfer this to your bank account if you want.

With the second option, there are over 50 different retailers with which you can buy a gift card using your Ibotta earnings, including:

  • Amazon
  • Walmart
  • Starbucks (those lattes won’t buy themselves, after all)
  • BestBuy
  • eBay
  • iTunes

Related: Is Ibotta Legit? The Ultimate Ibotta Review

How does Ibotta make money?

Ibotta makes money through affiliate commissions, by receiving a portion of each offer that its users redeem with its partner retailers. In addition, Ibotta encourages its users to watch short videos or answer surveys in exchange for rewards from certain retailers, which pay Ibotta for this.

More information on how Ibotta makes money in these ways can be seen below.

How does Ibotta make money with affiliate commissions?

Affiliate commissions are where an individual or a company receives a small commission if someone else buys or signs up for something based on their recommendation.

For example, at the time of writing this, Walmart is offering $1.00 back for every box of Cheerios people buy through Ibotta. As seen here, this product costs around $3.30 for its full price, meaning you as the Ibotta user would only pay $2.30 for this. Bargain!

screenshot of Ibotta app showing how does Ibotta work

And assuming that the commission rate is 10% of the full product price, Ibotta would receive $0.33 from Walmart for every box of cereal that you buy. This is because Ibotta is basically encouraging you to buy this type of cereal by making this offer available, so Walmart is paying Ibotta for promoting its product.

This means that based on your use of Ibotta, you save money, Ibotta gets paid and Walmart still earns just under $2 – minus the product cost and its other operating fees.

And while $0.33 may not seem like much, keep in mind that more than 35 million people have downloaded the Ibotta app. As you can probably see, those few cents can quickly add up.

Related: How to Make $100 a Day: 41 Ways That Actually Work

How does Ibotta make money with videos and surveys?

The other way that Ibotta makes money is by occasionally having offers where its users can watch a short video or complete a survey that relates to a certain brand or product.

man making money with Ibotta by watching video on his laptop on his couch

Once you’ve done the activity, you’ll then be able to access bonus offers – that, coincidentally, relate to the same brand or product.

This means that these activities are essentially advertisements, with the company offering the particular brand or product paying Ibotta for running these.

And, of course, if users end up buying whatever is being advertised, Ibotta will receive an affiliate commission for that, meaning it’s a double gain for Ibotta.

This doesn’t mean that it’s bad for you as the user though. If you get to save money based on what Ibotta is being paid to promote, then it’s a win for everyone.

Related: 11 Legit Ways to Get Paid to Advertise For Companies

How do you get $20 on Ibotta?

You can get $20 as a welcome bonus through Ibotta by signing up using an eligible link. From there, you have to make sure you redeem an offer within 14 days of registration and the money is yours.

And you can find an eligible link to claim this right here.

Related: How This Unique Ibotta Referral Code Can Get You $20 For Free

How does Ibotta work to make you money?

How Ibotta works to make you money is by giving you money back on things you’d already be buying.

For example, you probably need staples such as bread, milk and flour, meaning that these are things you’d be buying during your supermarket visit anyway. Even things that you don’t strictly need but that you were going to buy at some point – like, say, wine (…just me?) – can offer a great chance for you to save money with Ibotta.

In brief: By using Ibotta to get cash back on these items, you can reduce your grocery bill by a few dollars each time, simply by doing exactly what you would have been doing even if you didn’t have this app.

The one thing to be careful of though is if you’re tempted to buy extra things you don’t really need simply because they have a cash back offer listed in Ibotta. 

screenshot of Ibotta app showing how does Ibotta work

For example, getting $0.50 back on mayonnaise is great. But when the product on offer, like this one, costs more than $7.00 and you didn’t actually need it, that’s not $0.50 you’re saving. Instead, that’s $6.50 you’re adding to your supermarket bill.

And as these additions can really add up, it’s best to make sure that your use of the app is only for what you actually need to buy.

Other ways Ibotta works to make you money

While making money from buying things is the main way to get cash back through Ibotta, there are also occasionally other bonuses.

One of the most lucrative ones is the bonus you get if any of your friends sign up through your personal Ibotta link. In doing that, they’ll get the $20 welcome bonus plus you’ll receive cash for getting them on board.

To access this, simply sign-in to your Ibotta account and your profile will have your unique referral code for you to share with your friends.

Related: How to Get Paid To Be a Virtual Friend

How does the Ibotta shopping list work?

The Ibotta shopping list is a nifty little feature in the app that makes it much easier to keep track of the offers you want to redeem.

All you do is scroll through the retailer where you plan to shop. Then, when you see an offer that you’re interested in, tap the pink plus icon to add the item to “Your List”. You can access this at the end of the gallery.

woman using ibotta app while shopping

There’s also an option to add “Any Item” and “Any Brand” offers to your Ibotta shopping list. For any brand, this means that you can, say, buy a carton of milk from the relevant retailer and you’ll get cash back no matter which brand of milk you buy.

“Any Item” is even more flexible. All you have to do is buy literally anything at the store and you’ll get money back on this. It’s a great way to get blanket savings on your entire shopping trip rather than only focusing on the individual items that have cash back offers.

Is it legit how Ibotta makes money?

While it’s fair to be a bit suspicious of Ibotta making money based on what you buy through them, it’s actually a completely legitimate money making strategy. 

After all, they have to make money in some way and by promoting certain products (thousands of them!) for which you’ll get cash back, it’s very similar to companies that offer you a unique discount if you buy a product they recommend.

And in the end, you get to benefit by getting money back!

You’ll actually find that a lot of apps where you can make money and even other sites where you can make money online will earn their own money the same ways: through affiliate commissions and advertising.

This means that while it’s definitely justified to look at things with a critical eye, in this case, you’re still benefitting while they do too.

Related: 37 of the Highest Paying Online Jobs

Final thoughts on how Ibotta works

There’s a reason that over 35 million people have earned over $680 million with Ibotta over the years. Simply put, it’s a great app that helps you make money doing something you’d be doing anyway.

We all need milk and butter and (the occasional piece of) clothing and medicine. So when you can get cash back on these items, letting you save money in the process, there’s really no down side.

It may take a little bit of planning to use Ibotta properly, in that it’s a good idea to always check the retailer on your app before going to the store so you know exactly what’s on offer.

But once you’ve figured out how to do this as efficiently as possible, you’ll find that it takes practically no extra time at all in order to get this money back with Ibotta.

And if you can earn this cash by doing basically nothing extra compared to what you’re doing now, then that’s definitely an ideal money making strategy.

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