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5 Ways You Pay for Free Apps

You see the advertising. Do you know what else you’ve agreed to?

spinner image a jar filled with cash superimposed over a gray field covered in app logos

“You get what you pay for” takes on fresh meaning when you download free apps to your smartphone.

As of July 2023, nearly 97 percent of Android apps in the Google Play Store were available for free, according to 42Matters, a Swiss app intelligence firm. About 85 percent of the iOS apps in the Apple App Store are also free, Apple says.

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You can put the software on your phone at no cost, but the concept of gratis can be stretched only so far. Companies don’t give away the store for benign reasons. They have bills to pay and need to generate a profit. The ways that developers monetize their products vary, and if you want a free app to perform at its best, you’ll have to surrender some loot to get what you want.

Put another way, the price of free begets trade-offs.

1. Advertising pops up when you least expect it

Advertisers often pick up the tab when you’re using an app for free, and you may see the results even when you’re not engaging with that app.

You may see display ads appear on your home screen. And advertisements may come from an app’s developer or through cross promotions with marketing partners.

2. Beyond the basics comes at a cost

If an app carries an “in-app purchases” designation next to its listing in the App Store or Google, it’s one of a legion of freemium applications.

If you’re a video game player, you may have become frustrated with games that are free to try or free at some very basic level. Freemium apps for services work the same way: You must fork over cash to tap into advanced features, custom experiences, premium content or an ad-free experience.

Freemium can take different forms:

  • Subscription. Your participation generates recurring income for the developer, often monthly or annually but potentially weekly, quarterly or under some other time frame. Some freemium apps allow a limited trial period before you must shell out money.

Most subscriptions renew automatically unless you actively cancel them, according to Apple. If you don’t want the fee forever, set a calendar reminder for a week or so before the renewal date, so your cancellation can process in time for you not to be charged. And, yes, there are apps to help you cancel.

  • One-time purchase. Sometimes only a single payment is required to access pro or premium features or to remove ads. This may be referred to as a nonconsumable in-app purchase.
  • Sale of digital goods. Under this scenario, you pay for stuff inside an app as needed. For example, in a game, you might purchase digital goods or currency to dress up virtual characters or add bonus levels.

3. Shopping for stuff is part of the experience

Yes, sometimes apps that are free to download double as storefronts where you can purchase physical real world items and services. These include travel apps such as Expedia or Orbitz and fashion resale apps such as Poshmark, The RealReal and thredUP.

App developers can benefit totally from selling to you or get a commission or consignment fee.

4. Influence on your decisions isn’t always obvious

Ever wonder how those seemingly generous cash-back rewards or deep discounts are paid for? The answer may relate to the partnerships a company has secured through affiliate marketing arrangements.

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Consider the Rakuten shopping app, which issues rewards to consumers who shop at certain online and in-person retailers. Retailers pay Rakuten a commission for driving shoppers to brand partners. Then Rakuten shares a portion of the proceeds in the form of cash back.

Similarly, the GoodRx app can reduce out-of-pocket costs for certain medications at certain pharmacies.

GoodRx has partnerships with companies that negotiate with manufacturers and drugstores to lower prescription drug prices for insurance companies and large employers, according to Philadelphia-based newsletter Drug Channels.

Those prices are lower than a cash price for consumers who walk into a drugstore without insurance. GoodRx taps into those rates so consumers can get lower prices, and GoodRx earns a portion of the fee.

5. Other businesses get to study your data

Companies may share data they obtain about you with marketing partners who in turn may flood you with personalized offers and promotions.

Read those legally dense privacy policies to ensure that you really are OK with the personal data a developer collects when you sign up or register for products and services within an app. Investigate whether the company can potentially sell your data to other firms. If so, check whether you can opt out of this arrangement.

Apple’s App Tracking Transparency feature requires apps in its store to seek your permission to be tracked across apps and websites they don’t own or to share your information with so-called data brokers. Apps in the App Store also carry Privacy Nutrition Labels that identify how companies use data to track you, whether for advertising or analytics or other purposes.

If you don’t agree with a company’s data practices, look for a free option somewhere else.

PHOTO CREDIT: IcemanJ/Getty / Fetch Rewards / Hotwire, Inc. / Flashfood Inc / Hotel Tonight Inc / Pruvo NET Ltd. / The Points Guy / Krazy Coupon Lady LLC / Groupon, Inc. / Too Good To Go / GoodRx / Mealime Meal Plans Inc / RoMa LLC / KAYAK / AMZN Mobile LLC / Rakuten Ebates / Flipp Corporation / / WalletHub / NerdWallet / TodayTix, LLC / Gametime United Inc. / ShopSavvy, Inc. / GasBuddy Organization Inc / Nenov/Getty / kundoy/Getty

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