Ebates.com links shoppers, store sites

Google answers your questions in a fraction of a second. Facebook easily connects you with friends across the country. But shoppers hunting for bargains have had trouble finding what they want online. Until now.

Ebates.com is coupon clipping for the 21st century, a Web site that combines rebates and coupons with the ease and access of the Internet.

With only an e-mail address and a password, registered users of Ebates.com are connected to savings at more than 1,200 online stores. Bargains are available on clothing and computers, medicine and travel.

“We’re trying to give shoppers what we think is the best deal possible for shopping online,” said Kevin Johnson, chief executive officer of Ebates. Business is booming. He adds: “Frugality is the new chic.”

After logging onto Ebates, a shopper can search for a product or choose from a selection of online stores. After the customer chooses a store’s Web site and makes an online purchase, Ebates automatically credits the user’s account for a cash-back rebate, which is a percentage of the sales price. At the end of each month, Ebates sends the shoppers a check for whatever cash they have racked up during their shopping.

Each store provides Ebates with a commission for sending it shoppers, and Ebates shares those earnings with the shopper. Each store designates what percentage it will pay back per purchase. Some of the stores offer as much as 26 percent back, though most are in the 3 percent to 5 percent range.

The stores benefit with more exposure to shoppers.

“Retailers are doing whatever they can to drive traffic into their stories,” said Mike Kraus, a retail analyst for Allbusiness.com. “The media landscape is becoming more and more fragmented, in our busy lives where we are on our phone and watching TV and reading a newspaper at the same time, retailers are looking for any way possible to get their message in front of consumers.”

Offering small discounts is much more cost effective than other marketing deals such as direct mail or advertising, Mr. Kraus said.

Ebates expects to pay $20 million back to its consumers this year and has paid about $40 million to $45 million in rebates since it was founded in 1998, Mr. Johnson said.

On average, Ebates users do not typify the $1 off orange juice coupon clipper. Most of its customers have higher incomes and tend to spend thousands of dollars shopping online each month.

The median income is $75,000, but 8 percent of Ebates shoppers are millionaires, Mr. Johnson said.

“These are shoppers who can afford to pay more but are smart enough not to,” he added.

The average Ebates cash-back check is $120, but in July, Ebates wrote its largest check ever: $41,000.

When people realize the savings that can be obtained by simply shopping through Ebates, Mr. Johnson said, they tend to come back and tell their friends.

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