From Ebates to Rebates: An online mall with a difference

Online shopping can be fun and convenient – but what if you got paid to do it? That’s the idea behind Ebates, a U.S.-based online shopping portal that rewards purchases with cash back. Every three months, users get a check or PayPal transfer in return for shopping at their favorite stores through Ebates. Let’s say you bought a $1,000-laptop through the site. Depending on the brand, the purchase could return to you over $100 in cash back. The model has been wildly successful, with over 10 million active buyers, more than 2,000 participating retailers and over $300 million in cash returned to users since Ebates was established in 1999.

Acquired by Rakuten in 2014, Ebates has expanded at home and embarked on an overseas expansion campaign including launching in Japan with a mall dubbed Rebates, a combination of Rakuten and Ebates. Mitchell Gibbs, formerly VP of Network and Merchant Operations at Ebates Performance Marketing and now General Manager of Rebates in Rakuten, played a central role in bringing Ebates to Japanese shoppers. He recently sat down with Rakuten Today to explain the overall strategy.

“A lot of times, when you’re clicking around on the internet, someone’s getting paid,” says Gibbs. “We partner with retailers and they pay us a commission when we drive a sale to their site. The simple and innovative idea of Ebates back in the late 1990s was to share some of that commission with the consumer. We’ve been successful because we’ve seen the new customers that we acquire every year stay with the site and spend more in the following years.”

That has driven growth at Ebates to 40 to 50% every year since 2008. The company notched over $5 billion in GMS over all its properties in 2015, up from $400 million in 2008. Gibbs attributed the success to having good data, a good customer service experience and robust marketing capabilities. Ebates’ customer base skews affluent, he says, with at least 10% having a net worth of over $1 million; many users are interested in fashion and luxury items.

Apart from the U.S., Ebates also operates in Canada, China, South Korea, Singapore and now Japan. As many foreign businesses have discovered over the years, Japan can be a unique and tricky market to crack.

“You’ve got to build trust with the consumer here – the barrier for our sites is that it’s too good to be true,” says Gibbs. “So having a customer service team that is really responsive is a big part of it. We want to make the consumer feel smart for coming to Rebates to shop.”

A unique feature of Rebates compared to other Ebates operations is that instead of cash back, Rebates returns Rakuten Super Points to users in exchange for shopping through the portal. Fashion and electronics feature prominently. Popular brands on Rebates include Apple, Fujitsu, Dell, Clinique, Isetan, Suntory, Belle Maison and Nissen, with some points-back offers representing 20% of the purchase price. The more customers buy, the more points they accumulate, and those points can be used shopping at numerous retailers, restaurants and other shops throughout Japan.

“Rakuten Points are recognizable to the consumer, and the Rakuten brand name gives us a big head start in reaching the consumer here,” says Gibbs. Another advantage is that users can buy products from overseas sellers – Rebates can also provide customers with advice about cost-effective shipping and sales tax options for international transactions. Above all, though, Rebates is focused on helping both buyers and sellers.

“We want to be a mall where we expose our customer brands, we celebrate their brands, and we help consumers discover the brands that they’re going to be interested in,” says Gibbs. “The shopping behavior data that we have access to can help a retailer market to an audience they haven’t been exposed to before.”