Promo code sites have become big business, with digital coupons surpassing paper for the first time in 2020. Major deal sites make millions based almost entirely on commissions from each sale. They don’t sell shopper data and it’s not a scam. In fact, big companies like PayPal and Rakuten are buying up deal sites for billions. From Honey to Slickdeals, Rakuten Rewards to Brad’s Deals, CNBC asked the major sites what it takes to find deals that are real and why the business model works.
With the huge boost in online shopping during the pandemic, deal-finding sites have become a major business. In 2020, Inmar Intelligence found that digital coupons surpassed printed coupons for the first time ever.
Also in recent years, behemoths like Goldman Sachs and PayPal have paid hundreds of millions – or even billions – for sites like Slickdeals and Honey that automatically curate coupon codes or offer shoppers cash back for making purchases through their sites. Even banks like Capital One are getting into the game.
The business model is not a scam. All major deal sites say they don’t sell shopper data. Instead, each sale generates a commission for the deal site and for the middleman known as the affiliate marketer – a company that connects the vast world of retailers with deal sites.
With nearly 2,000 businesses in the daily deal site space, it’s a crowded industry filled with legitimate businesses as well as plenty of sites that are riddled with ads and expired coupon codes. That’s because regardless of whether a coupon code works, the site that provided the code will get commission for that sale.
When the deals are legitimate, however, it can mean big money for shoppers, retailers, and the deal sites. From Honey to Slickdeals, Rakuten Rewards to Brad’s Deals, CNBC asked the major deal sites, and shoppers, what it takes to find deals that are real and why the business model works.
Watch the video to learn how saving consumers’ money makes big bucks for companies in the vast world of online deal hunting.
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How Coupon Code Sites Make Millions .
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40 comments
Sometimes I wish I was into couponing but that also costs time
Rakuten are scammers, they will close your account without reason and their customer service is very rude
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Think your also getting free shipping? Nope! Its included in the inflated price!
Wasn't impressed with honey. Microsoft edge browser has a built-in feature that's better
Coupons are rare in Europe. Here you get a loyalty card and most deals are automatic. Sometimes there are coupons that you need to activate to use via the app.
1% target?? REI gives 10%
Rerailmenot hadn't had a working coupon in the last decade
It shouldn't take 17 minutes to explain… next.
I downloaded honey on my computer not believing it will give me cash back but wanted to give it a shot, and I was so surprised it actually gave me cash back!! This is amazing for people like me who only do Online shopping.
Some people in the comments are saying “coupons are made to make you spend more” that’s not true in all cases. I buy what I want to buy only and it gives me money back.
So far it’s given me $80 total
"Success is liking yourself, liking what you do, and liking how you do it. – Maya Angelou",
Paid for by Brad's Deals
If a coupon makes you buy something, then you are wasting money. If you needed something and a coupon happens to exist, then you legit saved some cash. End of story.
Where do I start
A successful man is one who can lay a firm foundation with the bricks others have thrown at him. ~David Brinkley
I rather spend the time making overtime pay at work, then searching for coupons.
Rakuten is straight up cheeks. They never give me my money back.
Our greatest fear should not be of failure but of succeeding at things in life that don't really matter. ~Francis Chan
There is no chance, no destiny, no fate, that can hinder or control the firm resolve of a determined soul. ~Ella Wheeler Wilcox
Yeah, the big companies want regulations because it will stifle competition. Right now the coupon industry is going great, but if you introduce more regulations, it will lower competition and ultimately force people to have fewer choices
Take up one idea. Make that one idea your life — think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success. ~Swami Vivekananda
Except Rakuten does have high end brands like saks, Bergdorf and many brands they sell.
Saving over $8000 a year on spending means she spent way more then that amount. That's a lot of junk buying for a family. She needs some financial education.
Back up and look at the reality of the situation: People are willingly consuming advertising so that they can spend more money.
You can save a lot more than a few % by just not buying that thing you don't need in the first place.
My mother has spent thousands on crappy Groupons which she then justifies buying.
Best ad video ever.
I tried finding a coupon the other to buy a 1-5 yr VPN provider. It took me too long but i eventually got $10 off than i search a bit more and find one for $12. I was happy but i wasted a lot more time than i though i would've/should've.
Honey is Great
When the rich and their stock market crashes to -0- then and only then World War 3 begins
I've tried using coupons on a lot of sites,, they almost always fail so I don't bother anymore,,, 99% of the time that code has expired or is no longer valid…these sites are just getting ad revenue and clicks for there failed coupons
gimmick AMERICA GLORIFY CONSUMERISM
Why does this feel like an advertisement for all the mentioned companies?
So basically the shops raise the prices, some people profit from it (people who heavily use these cashback apps) while 90% of the customers do not (they pay a lot more in the long run).
Did I just watch a 17 min ad for Brads Deal? I’ve never heard of them.
Love these!!!!
This is why everyone is in debt. Put a $1,000 purchase on a 24% interest credit card to get 8% back
No wealth can ever make a bad man at peace with himself. –Plato
eBates was such a better name than Rakuten
People who give up in life are people who lose in life, my first experience happens to be a failure but I never gave up cause I knew it was going to work out for me trying continuously, fortunately I'm smiling today by getting involved in crypto investment.
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