PayPal Rewards Explained: How to Earn, Redeem and Maximize Savings
PayPal is famous for being the OG of online payments, helping people buy, sell, and send money without digging out their wallets. For many, it’s been a lifesaver (and bank-saver) if they can’t—or won’t—use credit cards.
In 2022, PayPal decided to jump into the loyalty arena with PayPal Rewards, aiming to compete with shiny credit card programs that offer cash back or a bank of points. The big question: is it actually rewarding or just another layer of payment confusion? We dug in.
Image Credit: Shutterstock
how they work:
If you have a PayPal account, congrats, you’re already “in” the program. No separate sign-up required.
At its core, PayPal Rewards is a shopping portal. You’ll find “cash back” offers for specific brands or products, which you have to activate or save in advance.
⚠️ Here’s the kicker: while they market it as “cash back,” you actually earn points that equal cash back later. Make sense? Nope, didn’t think so. PayPal took two simple things (points and cash back) and mashed them together. Call us next time PayPal!
How it works in practice:
Go to the PayPal app → “Offers”
Hit Save/Activate on the ones you like (could be “10% at Eddie Bauer” or “3% on Land’s End shorts”)
Shop at that brand, pay with PayPal, and points magically appear in your account
✅ Bonus: PayPal owns Honey, the browser extension. Download it, log in, and Honey will nudge you with offers as you shop online. Translation: fewer missed deals because you forgot to open the PayPal app.
PayPal’s app shows you all the offers and allows you to search by brand, product, or category.
You can “save” offers and also mark deals as “Favorites”.
Some deals are on specific items.
How are points calculated?
100 points = $1
Spend $100 on a 5% offer → 500 points = $5
Spend $50 → 250 points = $2.50
Props to PayPal for showing both your points balance and the cash value side by side. At least they make the confusion slightly less confusing.
Points from the app, website, and Honey all pool together.
Expiration rules are refreshingly chill: keep your account active by either (a) earning just 10 points AND (b) completing 3 eligible PayPal transactions in a year. Easy. 👏🏻
how to redeem points
This part is thankfully super easy and flexible:
💵 Redeem points for straight cash transferred into your bank account, request a check by mail, or, if you are feeling particularly generous, you can send the funds internationally to friends and family.
🏦 Redeem points into your PayPal Savings account, if you have one set up.
🛒 Redeem points at Checkout for select merchants for $-off your transaction. If a merchant has this feature, you will see it as an option when you select PayPal as your payment provider.
🎁 Redeem for gift cards on the Honey Service.
💘Donate points to the PayPal giving fund. Note that the donation is not tax-deductible. Best part: every option gives the same value. No redemption traps or “gotchas.” 100 points always = $1.
how to maximize savings:
Saving with PayPal – as with any online offers program- takes a bit of homework.
Set a reminder once or twice a month to browse and activate offers
Install the PayPal Honey browser to catch savings prompts automatically
Link a rewards credit card as your PayPal payment method → double dip with card rewards + PayPal Rewards
Stack even further with the retailer’s loyalty program if they have one
How rich are the offers? They range widely from a low of 0.5% cash back to a juicy 10% for top promos. Most hover around 1.5–3.5%, which is solid compared to many retail programs (ahem, Nordstrom’s and The Gap). The richest ones are often found right on the homepage.
The Fine Print:
Age 18 to join
You must save or activate offers before making a purchase.
Each offer has different terms such as eligible dates, minimum spend or maximize cash back limits.
PayPal (and PayPal Honey) will likely not work with other shopping portals like Rakuten as the merchant is sending cash back signals to one provider.
Returned items will (naturally) have your points taken away.
Redemptions are final
It can take up to 24 hours to receive your redeemed cash back.
Ensure you meet the activity requirements in a year to ensure your points don’t expire.
Summary & verdict👩🏻⚖️:
If you already use PayPal for checkout, this program is a no-brainer. Offers are plentiful, redemption is easy, and stacking potential is strong.
The only drawbacks? You’ll need to remember to activate offers, and savings can be a mixed bag—sometimes meh (0.5%), sometimes great (10%).
But overall, it’s flexible, easy, and rewarding.
Leave us a comment! Do you agree or disagree? Any further tips about PayPal Rewards?
