Americans turn to digital coupons, cash-back savings as inflation soars

As consumer prices climb, millions of Americans are trying to stretch their dollars further – and some are saving big online.

The world of digital deals has steadily grown in response to rising prices and increased at-home shopping.

That shift drove the use of digital coupons as demand from traditional paper coupons fell. Digital coupons are "clipped" virtually when a customer selects them in an app, the savings is applied to a future purchase.

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Amid the pandemic, the redemption of digital app-based coupons surpassed the redemption of newspaper inserts for the first time, according to Inmar Intelligence.

"So the digital coupon takes that guesswork out of it, you just scan a product and it pops up … I’ve saved hundreds of dollars," said Christina H., who runs a YouTube channel dedicated to finding deals. "I make sure to plan out my purchases before I go to the store so I know how to navigate the store and find what I need."

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In 2019, less than 25% of coupon redemptions were digital. Now, 33% of coupon redemptions are digital while only 24% of redemptions come from paper inserts.

Beyond digital coupons, other online savings methods, like cash rebate platforms have surged in popularity. While coupons reduce the price a customer would pay, cash-back apps can use a picture of the purchase receipt to refund money to the user after a transaction.

"As soon as I get to my car I scan that receipt, by the time I get home the cash back is usually in my account," said Krystal Sharp, who runs a blog about maximizing deals. "It saves a lot of time in my opinion because there’s no clipping or sorting, and it’s deeper than just free things at the grocery store; I can use the money I save to make my life better."

Bryan Leach, CEO of cash-back platform Ibotta, told FOX Business rebate apps are the fastest growing form of online promotion. The company has "given away" $1.1 billion in cash back in the decade since the app launched. Leach likened the app to a second source of income for the people who use it and feel they are being "paid to shop."

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"We believe it’s important to cut the consumer in on the deal," Leach said. "If they [consumers] are going to spend time, energy, attention, share information about what they like to buy, what do they get in return, we can say concretely you’ll earn hundreds of dollars a year."

While Ibotta works with multiple retailers, Leach explained the company will soon launch a new cash-back platform for Walmart.