What are referral programs and how do they work?

Like lots of consumers, you probably have certain brands you purchase online and maybe you even have apps you use to shop with as well. But did you know that those brands and sites and apps typically have referral programs that will reward you for suggesting your friends, family members, and/or colleagues shop there as well? They do. Simply by sharing a “referral link” or “referral code,” you can earn extra money, discounts, and even freebies that really add up.

The definition of “Referral Program”

A referral program is a process whereby consumers of a particular product or service or brand are rewarded for encouraging others to use or buy that particular product or service or brand. Essentially, the company involved is asking you to become a brand ambassador for it and for doing so, they’ll reward you with gift cards, discounts, real money, and sometimes free gifts for those who act on your referral.  

For example, the mattress company Casper rewards customers with a $10 gift card to Amazon when a friend they refer purchases a mattress for the first time, and active wear brand Girlfriend Collective gives the referring customer $10 off of their next purchase, and the referred friend gets a free pair of leggings. A great gift if a) you like the brand and b) you like keeping your legs warm in the winter. Live someplace warm? Gift the leggings to a friend who lives in New Hampshire!

Referral programs are an easy way to make a little “mad” money

We know a woman who makes around $150 a month using her referral link from Rakuten (a site and program we’ll talk about in just a moment). As she says, “I use it to pay for manicures or a little something special for myself or someone else I otherwise wouldn’t be able to buy. I call it my ‘mad’ money.”

Mad money is one way to describe it. Passive extra income is another. There’s almost no work involved and because you really like the product or brand you’re referring your friends to, it can be a lot of fun.

The nuts and bolts

It’s very simple. All you need to do is distribute the referral link or referral code provided to you through your account from whatever brand, site, or app you’re using.

Here’s how:

If the referral code or referral link is sent to you via text or email, you can forward it to friends, family, colleagues, neighbors, you name it. Then, when the recipient of your link uses it to create their own account, you receive whatever reward the program offers.

For example, let’s say you share a referral link you received from Uber with a friend and your friend signs up for an account. In that case, both of you are rewarded with a free ride the next time you need one. It’s not money back, but it is money you don’t have to spend the next time you need to go from point A to point B. (And your friend doesn’t have to spend money either!)

You can also share your referral links or referral codes in your email signature. If you do this, add some text that says, “Start saving with Rakuten! Use my referral link to get $10 just for joining and get cash back on your purchases all year long!” Then of course provide your referral link.

You can also share your referral codes or links on social media. Facebook, Instagram, Twitter, and Pinterest are all excellent platforms for reaching your connections and increasing your rewards. And, if what you’re sharing is a business-related referral program, like web host service Hostinger offers, don’t forget to share it on LinkedIn.

Wondering which websites and apps will pay you for referring your friends and family?

Following are a few websites and apps you can consider joining. Please note that in all instances, you need to open a new account, so if you already have an account, you will not receive the sign up rewards. In addition, anyone you refer has to be new to the site or app as well.

Rakuten: Rakuten touts itself as the “#1 Cashback Shopping Companion.” It has more than 15 million members and has paid them more than $2 billion in cash back. The company gives you a $10 bonus for joining (after you make a $25 purchase within the first 90-days) and it offers cash back at more than 3,500 stores including Target, Sam’s Club, Ulta, Saks Fifth Avenue, Old Navy, Lowe’s, Macy’s and more.

To accrue your cashback:

1. Shop any of the retailers on the Rakuten site by going first to Rakuten.com.

2. At Rakuten.com, click on the link to the retailer’s site. This allows Rakuten to track your purchase(s) and credit them to your account. You can also do this by using the Rakuten App.

3. With regard to getting the money you’ve saved by shopping through Rakuten, you can request to receive your money via check or PayPal.

Overall: Easy to use and a great selection of retailers to shop from.

Swagbucks: Swagbucks gives you free gift cards for shopping online, playing video games, watching videos, answering surveys, and more. You can redeem Swagbucks points (called SB) for cash via PayPal or gift cards to stores like Amazon and Starbucks. Plus, refer a friend to Swagbucks and get $5 for each one who signs up.

Overall: A little cumbersome to use, but teens and young adults like it. And it’s not a bad way for them to earn a little income.

Ibotta: Similar to Rakuten, Ibotta is a shopping app that offers real cashback on everyday purchases from grocery stores and top retailers like Walmart, Target, CVS, and more. To shop from your computer, first download the Ibotta browser extension. Then shop the retailer of your choice through the extension so Ibotta can track your purchase(s) and credit them to your account. You get $10 for signing up and $5 for every verified referral, plus another $5 when you spend $15.

Overall: Like Swagbucks, a little cumbersome as you need to download the Ibotta browser extension which can be a little confusing. However, if you have access to a teen or young adult it can be done in and you can be earning rewards 30 seconds!

Cash App: Cash App doesn’t reward you for signing up, but you do earn a bonus when your referral uses your referral code to send at least $5 to someone. To receive the bonus, your referral needs to be a new Cash App user, they must enter your referral code when they create their Cash App account, they need to link a debit card or bank account to their Cash App account, and they have to send $5 within 14 days of entering your referral code.

Overall: Straightforward and easy to use. The woman we mentioned earlier uses Cash App to send money to her son who’s a senior in college. She reports that it’s made life a lot easier!

Getaround: Getaround is a car-sharing app. Car owners enroll their vehicles and make money renting them out to other Getaround users. When you join the app and refer a friend who also joins, you  receive a $20 credit. Should your referral end up listing his or her car with the app, you receive $200.

Overall: Easy to use, and the company has good protections and rules in place for protecting the cars enrolled and those who use them.

Tesla: The company’s electric cars do not have a referral program but its clean-energy solar products do. Simply make a purchase of Tesla’s Solar Roof or Solar Panels and you will receive a unique referral link. Those who order through your referral link will earn $500 for Tesla’s Solar Roof and $300 for its Solar Panels. You earn $500 for each Solar Roof referral and $300 for each Solar Panels referral.

Overall: Tesla’s referral program is touted as one of the best around. If you’re embracing clean-energy, it’s worth looking into.

PureTalk: When you join PureTalk, you’re given a unique referral link you can share with friends and family. For each friend who signs up through your unique link, you will receive a $20 bill credit applied to your account, and your friend will receive a $20 credit applied to their account. Best of all, there are no limits. You can refer as many friends as you want, and you will get a $20 credit for every single one of them.

More about PureTalk:

At PureTalk we’re proud to offer you phone plans starting as low as $20 a month for unlimited talk and text and 2GB of data, and tablet plans starting at just $10 a month with 2GB of data. We’re on the same 5G network – the most reliable network in the country – as the pricey wireless companies and, among families of four who switch to PureTalk? They save $75 a month for an average of $900 a year.

Everything you need to know about the PureTalk Customer Referral Program:

1.Each customer has a unique referral link to share with friends. For each friend who signs up through your unique link, you will receive a $20 bill credit applied to your account, and your friend will receive a $20 credit applied to their account.

2. There are no limits to how many friends you can refer with PureTalk's Customer Referral Program. Refer all of your friends and get a $20 credit for every single one of them.

3. Your $20 credit will post to your account after your friend completes their second active month of service.

4. To see which of your friends you have referred to PureTalk, log in to MY ACCOUNT and click the "Referrals" tab at the top of the page. You will see all of your referrals listed in the "Referral Credits" table at the bottom of the page.

5. You can post your referral link anywhere you want. On your social media channels, your blog, in emails, etc. You can grab your unique referral link by logging in to MY ACCOUNT and clicking the REFERRALS tab. You can also easily directly share to your social channels and email via the REFFERALS page in MY ACCOUNT.

6. What about friends who sign up for PureTalk but forget to use my referral link? Can I still get credit? There are two ways you can earn referral credits. Your friend could have used the unique referral link, but he or she also had the option to enter your phone number at checkout when asked if a friend referred him. Unfortunately, if your friend did not use your referral link and did not enter your phone number at checkout, we are unable to apply a referral credit. The bottom line: Remind those you are referring to PureTalk to enter your phone number at checkout IF they’ve forgotten to sign up through your referral link.

Remember, families of four who switch to PureTalk save $75 a month for an average of $900 a year and, with our Customer Referral Program, you can earn as many credits as you have friends. We’re committed to helping you save so pick the PureTalk plan that works for you!

Posted 4 weeks ago