Honey vs Rakuten (ebates): Cashback Rewards Compared

If you are a fan of rewards and like to save money, you probably live for extra cash back. Miles are great for flying, but sometimes it's hard to beat cold hard cash.

Given that retail shopping has shifted online, cash back credit cards and loyalty cards are no longer the only game in town. With the help of a browser extension, cashback giants Rakuten(formerly Ebates) and Honey provide rebates or coupons on shopping you probably were going to do anyway. How's that for a dopamine hit?

Unfortunately the programs can't be layered on top of each other, meaning you can't use both at the same time. You can't have your cake and eat it too! Here's a look at the Honey vs Rakuten showdown.

What is Rakuten? (formerly eBates)

Rakuten is a popular shopping portal that provides cashback on all your purchases. It has over 2,500 partner stores that pay Rakuten a commission fee to bring users to their websites. In turn, Rakuten shares cashback with you.

Signup is simple, and you can receive $25 by signing up with our referral link(after you use the site on $25 worth of purchases). Major retailers like Macy's and even subscription services like Birchbox are partners. Some of my most commonly used rewards are the Target 1% and Walmart 5% cashback opportunities.

Cash back on each product is transferred to your Rakuten balance within seven days. For instance, if you buy something from Lululemon, Rakuten will take a look at the value and give you cash back accordingly. If you purchased $100 worth of clothes and a 6% reward, your account will get a $6 cash back in few hours or days. You can choose to have physical checks sent to you or the money transferred via Paypal every three months.

Alternatively, you can shop around on other websites and activate the browser extension. It comes with a magic button that finds and applies coupons automatically during check out and sends the cashback right back to your account, on all eligible products. I use this exclusively and can shop directly on a retailer site, while being automatically notified of cash back.

What is Honey?

Honey is a browser extension that installs in just a couple clicks. It sits quietly on your browser and automatically works for you when you are shopping. The browser plugin is available on Chrome, Firefox and Opera browsers. The plugin follows users and applies coupon codes with the maximum savings at the time of checkout. Whenever users are browsing on any eligible online store, they will see a Honey popup during checkout.

Honey works with over 3,700 online stores and provides you coupon codes. It also has a reward program which gives users “Honey Gold” points. Accumulate these points, and you can redeem them for free gift cards. The process of shopping with Honey is also exceedingly simple. You just need to setup a honey account.

Sign up, install the plugin, and browse your favorite stores. At the time of checkout, the Honey plugin will quickly scan all available coupons and apply the one with maximum savings, which instantly reduces your total payable amount on the website.

Honey Droplist

One of the most convenient features we found is the droplist. When you're on e-commerce sites like Amazon, you'll see pop-ups that check to see if this price looks like the best deal among sellers. You can also add the product to your droplist and get email notifications when pricing drops. Another perk is that you can see price history up to a few months ago to get a sense of whether you're getting a deal. Honey is one of our favorite price history tools to use while shopping on Amazon.

Honey Vs Rakuten: What's The Difference?

Let's start with the similarities. Both are available as browser extensions, removing unnecessary steps in shopping for the users. Both websites are free to use and take minimal effort to signup. Both offer referral bonuses.

Cash Back Vs Coupon Codes

While both Rakuten and Honey are cashback programs, they approach cashback differently in the way users are rewarded.

If using Rakuten, browse the home page for stores offering discounts, or search for a specific store if you have a purchase in mind. You can goto the store site from the Rakuten page.

Alternatively, if you've downloaded and installed the browser extension, it will automatically alert you when a store you're visiting online is eligible for cash back. Let's say you goto Walmart.com, and the extension finds that it offers 5% cashback.

You can click on “Activate 5% Cash back” to ensure that any purchase made will receive rewards. After checkout is completed you should also see a notification that the rewards have been added. These rewards continue to add up until you reach a payout threshold.

A free honey account works by testing and offering coupon codes for your purchases. You must install the browser extension and let it work in the background. Before checkout, the extension will ask if you want to try their coupon codes.

If one of their coupons is chosen, you accumulate Honey gold reward points. With this reward point system you earn Honey Gold points as you shop. Accumulate points and trade them for the gift cards of your choice.

In a sense, Honey offers you coupon discounts upfront, and then sweetens the deal with rewards that can be cashed out later. In contrast, Rakuten provides its rewards in cashback terms upfront.

Honey offers a droplist which you can use to watch for price changes.

In our tests we found Rakuten to suit our shopping style with plenty of rewards even at big box retailers like Target and Walmart.

Referral Bonuses

You'll earn $25 if you join Rakuten here and then spend at least $25 within 90 days. (Don't spend the money just to get cash back though, make sure you were going to make those purchases anyway!). And yes I'll get the referral bonus if you use my link.

But that also means when you refer others, and they start using the extension or website for their purchases, you'll also get $25.

The Honey referral program is less generous, though it looks like your referred friend can spend any amount. If your friend signs up through your link and then earns Honey Gold (usually 60 days after purchase), you and your referred friend will receive a honey sign up bonus in the form of 500 Honey Gold points.

You can refer up to 200 friends for a maximum of 100,000 Honey Gold (the equivalent of $1,000). That means each referral is worth about $5, and you'll get it in the form of a gift card. Just make sure you share your honey referral link.

User reviews and BBB accreditation of the sites

The user reviews and BBB (Better Business Bureau) accreditation status of the websites you are working with indicates trust on a company’s operations and their work ethics.

Ebates had been in business for a good part of the past two decades with an A+ rating by the BBB with about 250 user complaints. This was before being purchased by Rakuten.

Honey is accredited with an A+ rating from the BBB with zero complaints, even though it is comparatively new in the business. It's since been purchased by Paypal.

Who wins the Honey vs. Rakuten battle?

Overall, both the services offer easy ways to get discounts and cashback.

We find using the browser extensions to be easiest. The usefulness of each program comes down to which has stores that you typically shop from. Even as you are shopping, you can test both services to see which one makes more sense.

Honey offers immediate coupons and then relies on a point system for additional rewards, whereas Rakuten provides an immediate calculation of cashback offered.

Both try to make the experience seamless for customers and earn you back a little pocket money. For the best of both worlds, install both plugins to test them out.