Ebates.ca and Cash Back Offers Can Be Good for Your Online Arbitrage Business in Canada

Rakuten (formerly Ebates) is a cash back platform that pays you a percentage back on online purchases from participating retailers. For Canadian Amazon sellers doing online arbitrage — buying discounted products from retail websites to resell on Amazon — cash back from Rakuten can add 1-10% to your profit margins on sourcing purchases. According to Rakuten, they have paid over $3.5 billion in cash back to members worldwide since their founding.

Last updated: March 2025

How Rakuten Cash Back Works for Online Arbitrage

Online arbitrage (OA) involves buying products from retail websites at a discount and reselling them on Amazon at a higher price. Rakuten adds an extra layer of savings:

Sign up for Rakuten (free) at rakuten.ca for Canadian stores or rakuten.com for US stores
Before making a sourcing purchase, visit Rakuten and click through to the retailer’s website
Complete your purchase as normal on the retailer’s site
Rakuten tracks the purchase and credits cash back to your account (typically within 1-7 days)
Rakuten pays out quarterly via cheque or PayPal (payment dates: February 15, May 15, August 15, November 15)

Example: How Cash Back Affects Your OA Margins

| | Without Rakuten | With 5% Rakuten Cash Back |
|–|—————-|————————–|
| Purchase price | $100.00 | $100.00 |
| Cash back earned | $0.00 | $5.00 |
| Effective cost | $100.00 | $95.00 |
| Amazon selling price | $150.00 | $150.00 |
| Amazon fees (~35%) | $52.50 | $52.50 |
| Profit | -$2.50 (loss) | $2.50 (profit) |

In this example, Rakuten cash back turns an unprofitable deal into a profitable one. On high-volume sourcing, even 2-3% cash back can meaningfully impact your bottom line.

Best Practices for Maximizing Cash Back on OA Purchases

Track Your Cash Back Carefully

Not every purchase gets credited correctly. Based on our experience working with Amazon seller clients:

Keep a spreadsheet logging every purchase made through Rakuten: date, retailer, amount, expected cash back percentage, and whether it was credited
Check your Rakuten account weekly to verify pending cash back appears
Open a support ticket immediately if a purchase is not tracked within 7 days — the longer you wait, the harder it is to recover
Take screenshots of your Rakuten activation and the retailer checkout confirmation as evidence for disputes

Watch for Elevated Cash Back Promotions

Rakuten periodically runs promotions where cash back rates double or triple at specific retailers. During these windows:

Rates can jump from 2-3% to 8-15% at major retailers
These promotions typically last 24-72 hours
Stock up on products you know sell well on Amazon during high cash back periods

Use Both Rakuten.ca and Rakuten.com

If you source products from both Canadian and US retailers:

Rakuten.ca covers Canadian retailers (Walmart.ca, Best Buy Canada, Hudson’s Bay, etc.)
Rakuten.com covers US retailers (Walmart.com, Target, Macy’s, etc.)
These are separate accounts with separate payouts — sign up for both

Do NOT Factor Cash Back into Buying Decisions

This is an important point for profitable online arbitrage. Cash back should be treated as a bonus, not a justification for buying.

Make buying decisions based on the purchase price and Amazon selling price only
If a deal is not profitable without cash back, do not buy it
Cash back does not always get credited — retailers change terms, tracking fails, or Rakuten denies the claim
If you depend on cash back to make a deal work, one tracking failure wipes out your profit

Tax Implications of Cash Back for Canadian Amazon Sellers

How you treat Rakuten cash back on your tax return matters:

Option 1: Reduce Cost of Goods Sold (Most Common)

Most accountants treat cash back as a reduction in the purchase price of your inventory. If you buy a product for $100 and receive $5 cash back, your cost of goods sold for that item is $95.

Option 2: Report as Other Income

Some accountants prefer to record cash back as miscellaneous income. The tax result is similar either way, but keeping it as a COGS reduction is cleaner for most Amazon sellers.

Important: Regardless of which method you use, cash back earned on business purchases is taxable. Do not ignore it on your tax return — CRA can cross-reference with Rakuten’s reporting.

Other Cash Back and Savings Tools for OA Sellers

Rakuten is not the only cash back option. Stacking multiple tools can increase your effective discount:

These can stack: Buy through Rakuten (5%) + pay with a 2% cash back credit card + use a store loyalty program (1%) = 8% effective discount on your sourcing cost.

Frequently Asked Questions

Is Rakuten cash back taxable income in Canada?

Yes, when used for business purchases. Cash back earned on products you resell should be treated as either a reduction in your cost of goods sold or as miscellaneous business income. Both approaches result in the same tax impact. Personal cash back on non-business purchases is generally not taxable.

Can I use Rakuten for Amazon.ca purchases?

Rakuten.ca does sometimes offer cash back on Amazon.ca purchases, but availability varies. Check the Rakuten app or website before each purchase to see if Amazon is currently a participating retailer.

What happens if Rakuten does not credit my cash back?

Open a support ticket through the Rakuten app or website with evidence of your purchase (order confirmation, screenshot of Rakuten activation). Most disputes are resolved within 1-2 weeks. Having documentation significantly improves your chances of recovering the cash back.

Need Help With Your Amazon Seller Bookkeeping?

Tracking cash back, sourcing costs, and inventory across multiple platforms gets complicated. If you are a Canadian Amazon seller and want help keeping your books organized, contact us. We specialize in accounting for Canadian e-commerce sellers.