COLORADO SPRINGS, Colorado (KKTV) – Many people try to save money wherever possible, and cash back apps are one way to do that.
Cashback apps are exactly what they sound like. Many of them are geared toward routine purchases like gas and groceries. Some Colorado Springs-area shoppers are excited about them, like Heather Brookman.
“Over time, it adds up. It’s just free money left over if you don’t use it,” Brookman said.
Other buyers, however, wonder whether there is a catch to the seemingly free money.
“I avoid them,” said Jaqueline, a shopper in the Colorado Springs area. “I think it’s a ploy to get people to spend more.”
Among the most popular cashback apps is Rakuten, which has 1.8 billion members, according to its website. Another popular app is Ibotta, which has 50 million registered users, according to the company’s website. After downloading an app, if you take advantage of the promotions in that app, you will receive your kickback.
The apps are generally free to download with no membership fees, which has left some users wondering if there’s a catch. Experts say there isn’t one at the moment.
“We don’t get a lot of scam reports related to this. But that doesn’t mean it won’t happen,” said Jonathan Liebert, CEO of the Better Business Bureau of Southern Colorado. “Many of them are legitimate, and it’s kind of a win-win situation… Rakuten and Ibotta are both accredited with us. We’ve actually dug in and reviewed these companies.”
Some apps will send the money directly to your bank account. Others will offer the refund in the form of a gift card. Some apps work on a points system, meaning you get your refund after you reach a certain number of points. Other apps will give refunds on a time basis, for example every four months.
But how do app companies work? Liebert explains the business model like this: “These companies build relationships with stores and brands and then get a commission on purchases made through their apps… The whole idea is that they close a deal and then pass on some of the commission they get to the customer.”
Although the BBB is not aware of any current fraud cases involving cashback apps, experts say it is only a matter of time before such scams occur.
“Cashback apps are becoming more and more popular and successful. So you can be absolutely sure that there will be scams in the future. So I think consumers should be on their guard,” said Liebert.
He added that people should look out for red flags, such as having to enter payment information. “You should never have to pay a membership fee for free money. Be wary of apps that tell you they’re free but then charge you a fee.”
As with opening an account with any other company, be aware that you may be agreeing to the sale of your information.
“For some consumers, this is a big problem. For others, it’s not… Of course, the more information that’s out there, the easier it is for scammers and other people to steal your data and use it against you.”
Liebert recommends reading the app’s privacy policy before creating an account.
All rights reserved.
