In this article, we will see How does Rakuten make money?
About Rakuten
Rakuten is a Japanese e-commerce platform where people can earn cashback by shopping. It is quite a popular cashback site, used and trusted by many. Rakuten is part of the Rakuten group’s business range of multiple services. It provides various financial and communication services to its members.
It is simple. You shop, stream or pay through Rakuten; you earn points based on that, which you later use to enjoy other services. Moreover, it has a loyal membership program with over 1.5 billion users registered as members who use Rakuten’s services to avail benefits.
Company profile
| HEAD OFFICE | TOKYO, JAPAN |
| CEO AND FOUNDER | HIROSHI MIKITANI (56 years old) |
| FOUNDING DATE | FEB 7,1977 |
How does it work?
People often have doubts while using cashback sites like Rakuten because they don’t understand how it works or earns their money. So here’s a simple explanation to show how the company earns its commission.
Rakuten has its ties with various stores and shops globally. Rakuten encourages you to purchase from those stores in return for various benefits and cashback. Like any other cashback site, Rakuten has a negotiated profit margin for every customer it refers to the stores. Since technically, Rakuten had pushed you towards those stores, the shops, in return, pay commission to them, which Rakuten shares with you in the form of the cashback.
This way, the retailer you bought from gets a customer and profits from the purchase you made from them. Rakuten, in turn for helping the retailer find their customer gets a commission. And the customer gets a share of the commission for using Rakuten. So it is a process where all three parties profit from the purchase made.
The cashback percentage varies according to the store, products being bought, offer period, etc. For instance, the stores may be providing more deals and discounts on a particular event timeline like a festival and then drop back to the normal rates on other days. Also, purchase on some selected products earns you more points than others. It also differs according to the amount or number of products the customer has purchased from the store.
 |  |  | |
| CUSTOMER | RAKUTEN | RETAILER | |
| What does it do? | PURCHASESPRODUCTS FROM RETAILERS. | REFERS THE CUSTOMER TO THE STORE. | SELLS PRODUCTS TO CUSTOMER, PAYS RAKUTEN. |
| What does it get? | EARNS CASHBACK, EXTRA BENEFITS. | EARNS COMMISSION. | EARNS PROFITS, NEW CUSTOMERS. |
Stores Pay Us. We Pay You.
–Rakuten
Another question that might pop into your head is how the stores confirm that the purchase has been made through Rakuten?
Answer: Rakuten uses ‘cookies’ (data collected by your computer, which it sends without making any changes to it) to confirm the purchase is made through the site. Hence many customers often have privacy concerns while using sites like Rakuten. However, that might not be a futile concern since cashback sites do track the customers’ activity.
How to earn cashback?
It’s simple. The goods you would have otherwise bought independently, you have to buy the same through Rakuten.
Rakuten provides many opportunities to earn cashback. For example, you can use the Rakuten App or add the browser extension. Even if you choose to go offline shopping, you can earn cashback from in-store shopping too.
Rakuten extends its services to both online and offline markets. Apart from shopping, you can earn cashback by referring a friend to Rakuten and adding a valuable customer to their network.
It is essential to enable ‘cookies’ for the website since, as mentioned above, it helps the company track your purchase and improves your chances of earning more cashback.
Adding a browser extension also makes things simpler for us. You’ll be notified of new cashback opportunities and discounts and won’t have to go to the website to check and compare their time and time again. It saves up a lot of time and is very efficient.
Is Rakuten secure?
Rakuten puts a lot of effort into protecting your privacy since the main concerns that arise amongst the customers are privacy and security concerns. For a company like Rakuten who depends mainly on online sales and transactions, providing safety on their site to their users becomes their top-most priority.
Due to the increased networking hacks and information leakages, Rakuten has constantly updated its security policies.
Their policy states that all the information that they collect directly from us remains secured with them. These include our details, i.e., Name, Birth Place, Birth Year, Contact details, etc., financial information- Credit card number or bank details and IP address.
Rakuten uses this information to authenticate our identity and send us marketing emails and updates. And only shares them with their business partners.
Conclusion
Rakuten, despite being a free website, provides users with multiple benefits. As we have understood, there is no loss upon undertaking your purchases through Rakuten.
It is free- you needn’t pay anything to make an account to join Rakuten.
It is user-friendly- combined with excellent customer service and a vast global support network for all its members.
And you are eligible for exclusive deals, which you get notified by them even when you don’t keep track of them manually.
The main advantage of shopping through Rakuten, of course, is its cash-back facility. In addition, it provides a safe and secured platform to make your payments through.
There will also be extra benefits by joining the team or proving yourself as a loyal customer.
However, not to mention, there are quite a few concerns and complaints circulating its usage as well. Therefore, it ultimately depends on the user to weigh its needs and use Rakuten accordingly.
It does have its laggings. For example, many complain about receiving their points days after they make the payment. This makes the entire point system slow. It happens because the stores take time to confirm your purchase through the site. Hence it is suggested that you accept all the cookies so that the stores have more information to verify your purchase.
