When it comes to saving on groceries or trips to the mall, Nichole Schaubroeck is a pro.
She scours flyers and websites, alerting her Instagram account's 254,000 followers to supermarket sales and deals at the likes of Lululemon or Amazon.
But one of her tried and true savings methods—apps like Checkout51, Caddle, Drop, and Eclipsa, which offer gift cards, points and cash back in exchange for uploading receipts, tracking purchases or completing surveys—poses a mystery to the savvy shopper.
"The purpose of these apps is to collect data mainly, from my understanding, but I don't know for sure," said Schaubroeck, who lives in Dominion City, Man. about 100 kilometres south of Winnipeg. "I don't know a ton about that side of it."
Schaubroeck's right about the apps collecting data, but where does the information go and who is really profiting from it?
Many of the apps make money from contracts with retailers and brands wanting to trigger purchases, reward loyal customers and learn more about how specific demographics shop. Customers' submitted receipts, linked credit cards and completed surveys help the apps deliver on their client's demands.
The information the apps deal with can be incredibly valuable for Canadian brands, said Ransom Hawley, who started a cashback app seven years ago after working for Ziploc- and Windex-maker SE Johnson.
"It was just really difficult for me to get good data and insights that were Canadian and recent," he recalled.
"Imagine presenting insights to Walmart and the data being six months ago from the U.S., they'd just get laughed out of the room."
A happenstance meeting with Apple co-founder Steve Wozniack convinced him to build Caddle, a St. Catharines, Ont., company doling out cheques for uploaded receipts, surveys and reviews.
Daily surveys net users five cents each. An uploaded receipt from stores like No Frills, Dollarama, Home Depot and Sephora can make them between 10 cents and one dollar.
The receipts help Caddle learn which customers have bought products featured on the app, so it can validate that it prompted a purchase.
Other brands want Caddle to land their products reviews. The receipt identifies when someone bought a target item, so Caddle can offer them money for writing a review.
The final way Caddle makes its money is through surveys, which help clients draw conclusions about the shopping habits and opinions.
While Hawley's heard of "bad actors" mishandling data, he said Caddle is upfront about its policies from the moment users enroll.
"There's a clear disclaimer there that says, 'hey, this is how we're going to use your data' and it's not buried somewhere and in legalese," Hawley said.
It's a "misconception," he added, that companies like his collect data and pass it along to clients with people's names and other identifiable details.
"With the things that we sign with like the Walmarts and Nestlés, they don't want personally-identifiable data, because it makes them liable," he said.
"So the vast majority of the data that we sell is just aggregated and anonymized."
Truly anonymized data is stripped of identifiable information through a technical process, so even if it is found, it cannot be tied back to a person, said Imran Ahmad, partner and head of technology at law firm Norton Rose Fulbright Canada.
However, some people confuse the term with de-identified data—data that removes names, but often leaves details like an address or a date of birth, which leaves room for reidentification.
Regardless, it's incumbent for the apps to handle data safely and be upfront about how information will be used, which Ahmad said most apps do.
Bob Fay, the managing director of digital economy at the Centre for International Governance Innovation, reviewed several money saving apps, but didn't sign up for any.
"It is very unclear how that information is being used. The only thing I think that is clear is that they are monetizing that information," he said.
"The old adage that there's no such thing as a free lunch, or in the case of these apps, free money is true."
He worries people "don't fully understand what they are giving away with these apps,'"but a recent survey from Drop, an app offering points in exchange for access to customers' credit card purchases and survey responses, suggests that isn't a concern for many.
The Toronto-based company found 70% of members it recently surveyed weren't bothered by the sale of their data, 23% were "slightly bothered." Only the final 2% were bothered.
"They're not against it, they're very well aware of the fact that their data is being used, and they're happy to opt into it because the value they're receiving on the other side supersedes what's happening there," said Amber Foucault, Drop's chief product officer.
Drop's userbase is primarily generation Z and millennials and the app, which advertises "bank level security," promises it doesn't provide user data to third-parties.
"Only anonymous aggregate information may be presented to third parties," Drop writes on its website.
Its clients are often companies looking for shopping insights or help targeting new customers or "battleground customers," who consistently shop with their competitors.
"If a user hasn't shopped at a beauty brand before we could offer them the opportunity to shop there and give them an incentive to maybe switch from their current beauty brand," Foucault said.
"Or if that shopper is really loyal, we could give the beauty brand the opportunity to reward or incentivize them a little bit more because of that continued shop."
Using these methods, it has rewarded more than $48 million to more than five million users, including many that flocked to the app in recent months as inflation materialized.
But Ahmad still has a warning.
"People should know when they give something, they may be getting something, but just because you're getting something doesn't mean you don't have to give," he said.
"With anything that's free, guaranteed there's some component that's a quid pro quo for it, so I think people have to go (into it) eyes wide open."