Coupon App Development: How to Make a Cash-Back App

Cashback market size

The 2020 Global Cashback report, published in July 2020, highlighted the following trends in the global market:

• The industry size stood at $108 billion;
• There were about 450 global industry leaders;
• The report noted strong growth of the industry since the initial report published in 2015;
• During the onset of the Covid-19 pandemic, the research team discovered that a third of cashback companies in the US experienced increases in their website traffic;
• Cashback offers increase the conversions by much as 3.4 times. They grow the average order size by up to 46%.

Cashback app types and market players

If you’re figuring out how to make a cashback mobile app, it’s essential to be aware of the possible types you can build. The options include:

Pre-purchase coupons and discounts + cashback

This app offers customers promo codes and discounts before the purchase. To further motivate the users, it can have a cashback program, and users can earn redeemable reward points.

The Honey Smart Shopping Assistant finds and automatically applies coupons during checkout. Users can earn Gold Points on qualifying items. If they have over 1000 coins, they can redeem them for cashback.

Building an app like Honey Smart requires coupon cashback app development to offer customers multiple ways to save.

Post-purchase cashback apps

A post-purchase cashback app provides refunds on qualifying products. It eliminates couponing by offering real cash-backs.

Rather than points, users may see their accumulated earnings in terms of fiat currency. They make withdrawals to their bank accounts, buy gift cards, or withdraw amounts to e-wallets.

Why do platforms get money to offer cash backs? They simply split the commission they receive from affiliate partners.

If Amazon offers an affiliate commission of 20% on games, you earn the full commission if the customer purchases through your link. But you may choose to split it 50-50, offering the user a cashback of 10% on their purchase. It may encourage them to use your app to shop again.

Top markets players with a post-purchase rewards system include:

• Ibotta — It’s a cashback on groceries app with over 1500 partners. Users receive rebates on in-store and online shopping purchases.
• Rakuten — The platform has offered rebates for over 10 years. It claims to have paid over $1 billion in cashback to its members.
• Fetch Rewards — Customers love the app for its ease of use, and it now serves over 13 million users.

Niche cashback apps

Niche cash-back apps simply focus on specific categories. Focusing on a niche may make sense when breaking into a highly competitive market or as a unique value proposition.

GetUpside became famous for offering cash-backs on gas purchases, thanks to their partnership with Shell and BP.

Task-based cashback apps

A task-based cash-back app rewards users for their everyday actions on the web. There is a clear need for such platforms as retailers and brands may want users’ opinions on certain products.

Swagbucks rewards users with gift cards and cash for shopping online, watching videos, searching the web, and answering surveys.

Receipt-scan cashback app

With most platforms, users must add deals to their list and scan receipts before shopping for offers to kick in.

A receipt scanning app reduces this hassle by automatically finding deals based on items added to the receipt.

CoinOut implements this very same model, offering a randomized reward for every receipt the user scans.

How does a Cash-back app work?

Assuming you want to make an app like Fetch Rewards, here is how it may work:

1. Create an account: The user downloads the app and creates a free account.
2. Add offers: Users search for a supported store and add items on offer to their list. To shop online, they use links provided by the app.
3. Shop & upload receipts: Following in-store purchases, customers take pictures of receipts or bar codes and upload them for verification. Some platforms allow customers to link their store loyalty cards and use them during checkout. This allows them to earn cashback automatically without uploading receipts. A platform may provide a browser extension that displays offers and records purchases on supported retailer websites.
4. Reconcile purchases to offers: Once the app records and verifies the purchase, it sends rewards to the customer’s account.
5. Making a withdrawal: The last step entails withdrawing the earnings. Standard withdrawal methods used by cash back apps include bank transfers, PayPal, and gift cards. Withdrawals are subject to waiting periods and minimum amounts.

*Something to think about as you embark on developing a cashback coupon app is how to ensure that you are indeed reconciling payments on purchases that actually originated from your offers. Currently, customers can redeem the same item several times across different apps. If your platform pays out more money to users than it generates from commissions, it may negatively impact your earnings.

Why cashback apps are useful

A cashback app is helpful for all the parties involved.

Here are some benefits for customers:

1. Easier time finding and using coupons to shop at their favorite stores.
2. The chance to earn money post-purchase from everyday expenditure.
3. An opportunity to earn rewards from special offers or participate in sweepstakes offered by individual platforms.

Brands and stores that work with cashback companies enjoy the following benefits:

1. No need to discount products
2. Increased reach and visibility through exposure by third-party platforms
3. Costs less than offering rewards
4. Incentivizes people to make more purchases
5. Attract customers to the stores and boosts royalty

There are huge benefits for individual stores that may develop a cashback app for exclusive use by the customers:

1. Rewards loyal customers
2. Encourages repeat purchases
3. Boosts brand engagement
4. Draws more people to the store

1. Market and competitor research

It’s not enough to have an idea of how to create a cashback website. Extensive market research should be undertaken to establish if there are:

• Sufficient demand for the solution
• An undercapitalized opportunity in the market (an unexploited niche, a new innovative and time-saving feature, lack of coverage in a geographic area).

Competitor research can help identify direct competitors. It can focus on their features, limitations, and how to outperform them.

For instance, review user reviews on competing apps and discover the problems they’re struggling with. On Rakuten, some customers have complained about not receiving their payouts.

Dosh users have not like the account maintenance fee. Users didn’t appreciate the recent Ibotta update. It removed the scrolling category banner at the top of the app, making navigation harder.

If you work with Attract Group, we will first analyze the market and formulate the main idea and app features in comparison with competitors.

2. Find developers

The software development team structure should include the following specialists:

• Software Engineers
• Project/Product Manager
• Quality Assurance Engineer
• UI/UX Designer
• DevOps
• Business Analyst

Such a serious undertaking requires the backing of an experienced app development company. You can find the expertise using sites such as Clutch.co or GoodFirms.com.

If you’re working with a limited budget, you can save by hiring a freelancer, but it will generally depend on where you look.

Hiring developers from some regions may cost more than if you hired a dedicated software development team from leading outsourcing markets such as Ukraine.

For instance, hiring a developer in the US may cost as much as $100 to $180. In Ukraine, developers charge between $30 to $55, with highly experienced developers charging $80.

For creative designers at the design stage, you can find freelances on sites such as Dribble and Behance. To hire experts for the coding stage, you can check Upwork or Fiverr.

Note that it’s important for a freelancer or app development company to have relevant development experience in coupon website development or integrating payout systems in apps.

3. Prototype and design

The design stage begins after specifying the idea clearly. You can start by forming user stories. They explain the app’s features from a user’s perspective.

Next, the design team can sketch and create wireframes to offer a rough visual representation of the idea.

If the team agrees on the direction to take, they can build a prototype, a preliminary version of the app that will be used to develop the MVP or final product.

It’s important to start with a low-fidelity prototype with very basic functionality before moving to a high-fidelity prototype that closely resembles the final product. This eliminates mistakes.

4. Build an MVP

Building a minimal viable product brings your idea to life quickly and offers users a usable app at minimal costs. The success of the MVP can justify further investments.

We recommend using a cross-platform framework such as Flutter to build an MVP. You can release initial versions for iOS and Android with nearly the same investment and time it would take to build a native solution. Learn how to hire flutter app developers and what’s involved.

Which features should the MVP have? We consider insights from the market analytics to select features to include. For instance, if all platforms have e-receipt scanning, it may make sense to support the feature straight away. Other cashback app features to consider for the MVP include:

• Sign-in and sign-up options
• Shopping page with product categories and current offers
• Search function to find partners or products
• User portal for viewing and tracking cashback earnings
• Receipt reconciliation and verification
• Withdrawal button

5. Release and improve

The last step on how to develop a cashback app is to release the MPV version.

Now, this is not the end. At Attract Group, we continue collecting the data and analytics from the first users. The analysis focuses on engagement metrics and issues that may impact the user experience.

Acting on facts rather than assumptions will allow the cashback services development team to add new features and make intelligent changes to keep customers coming back.

As mentioned earlier, you can start looking for partners even before undertaking the design and development process. It may entail joining various affiliate networks or reaching out to stores in your selected niche.