Walmart+ adds a new cash-back feature for members, Walmart Rewards - TechCrunch

Walmart is introducing another perk designed to sweeten the deal for its Walmart+ membership program — the retailer’s answer to Amazon Prime, which today offers a combination of free shipping, fuel discounts, contact-free checkout, exclusive deals, free streaming, and more. On Wednesday, the Walmart+ subscription will gain a new cash back in the form of digital rewards that can be used on future Walmart purchases, the retailer told TechCrunch.

Walmart+ subscribers will be able to browse the Walmart app for offers across a range of bestselling items, including groceries, household goods, pet care, and other categories. They can then “clip” these offers like digital coupons to be used on upcoming purchases. After buying a rewarded item, Walmart+ members will earn cash back in the form of digital “Walmart Rewards” that are saved to their Walmart Wallet in the app.

Those rewards can accumulate over time, allowing customers to apply their balance to a future Walmart purchase for further savings.

The system has some similarities with Target’s discount program, Target Circle, which presents various offers and digital gift cards to loyal customers who shop for specific products that can be redeemed at checkout. But in Walmart’s case, the new rewards program is limited to its Walmart+ subscribers instead of being available to all shoppers. It’s also not an entirely in-house effort.

Instead, the feature is the first product to emerge as a result of Walmart’s partnership with the cash-back rewards platform Ibotta, announced last year. The retailer said at the time that the agreement would later allow customers to redeem rebates and offers to save on purchases along with other benefits.

The addition of Walmart Rewards is meant to serve as another perk designed to encourage consumers to sign up for Walmart’s membership program instead of Amazon Prime.

Of note, it also arrives at a time when Amazon Prime is in the Federal Trade Commission’s crosshairs. The FTC is investigating whether Amazon used interface designs that manipulated customers into signing up for the membership program and whether it made it difficult to cancel. Amazon customers, meanwhile, are also newly debating the value of Prime after price hikes this year in markets like the U.S. and Europe, amid inflation and other economic issues that have U.S. households reconsidering their budgets for subscription services.

At $139 per year, Amazon Prime is a bit pricier than the $98 per year Walmart+ — and if used primarily for free shipping benefits or free grocery delivery, some customers may opt for the latter to save the extra cash.

Launched in September 2020, Walmart+ combines a free shipping perk with other benefits that appeal to a more cost-conscious and budget-minded shopper, like gas discounts. It also offers six months of free streaming music with Spotify and last week unveiled a new partnership with Paramount, allowing Walmart+ members to gain access to the streaming service and home to shows like “1883” and “Star Trek: Strange New Worlds,” without raising the membership fee.

Still, Walmart+ membership has slowed in recent months, requiring it to expand the subscription perks in an effort to reach more potential customers. An August 2022 report by Consumer Intelligence Research Partners (CIRP) found Walmart+ subscriptions had plateaued, estimating the program had some 11 million members in the U.S. But Morgan Stanley had pegged the number higher — at 16 million members.

Prime, for comparison, has over 200 million members worldwide but doesn’t provide figures on a per-country basis.

With this new cash-back program, Walmart potentially gains an advantage over Amazon Prime, as it allows customers to earn money without having to apply for a credit card — a financial risk many budget shoppers are unwilling to take. Amazon, on the other hand, markets its Amazon Prime Rewards Visa card to shoppers as a way to generate 5% on Amazon.com purchases. Walmart Rewards, however, won’t impact customers’ credit, as it’s a different type of product altogether.

Walmart’s partner on Rewards, Ibotta, is a digital couponing service, not a cash-back credit card. Before today, Walmart has been one of the retailers available in Ibotta’s own app, in fact.

Typically, Ibotta users find offers they like in the Ibotta mobile app, save them to their profile, then show proof of purchase — either by linking a store’s loyalty card or taking a photo of their receipt — in order to receive their cash back. These payments are relatively small. They’re often under a dollar for grocery items — similar to coupons. But over time they can add up. With the Walmart app integration, customers will no longer have to take an additional step to demonstrate their proof of purchase — the clipped rewards are automatically added to a member’s account after the item is purchased.

To receive the benefit, Walmart+ members just scan their Walmart Pay QR code at checkout and tap the “Use Walmart Rewards” option to utilize their cash back. (If the member forgets to scan the QR code, they can still scan their receipt, Walmart told TechCrunch.)

Ibotta’s website indicates it does collect and share customer data but anonymizes it to remove names, phone numbers and emails. In its agreement with Walmart, Ibotta will also receive “some time-bound transaction data” that will help it to measure the effectiveness of the deals, Walmart also told us. The retailer declined to share the terms of its agreement any further, or the specifics around the consumer data sharing practices.

“First and foremost, we’re always focused on using data in a way that builds trust with our customers, not taking it away,” a Walmart spokesperson said when asked about how the Walmart shopping data was being used.

Walmart says it plans to expand the Walmart Rewards program over time with a focus on rewarding member loyalty, but again didn’t share specifics.

A developer, Steve Moser, recently discovered what appeared to be the Walmart Rewards feature inside the company’s app before it had gone live.

The Walmart+ rewards feature will go live as of Wednesday, August 24, in the Walmart mobile app. If customers don’t see the option in the app by Thursday, they’ll need to update their app.

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