Not an REI employee and not really direct evidence as I haven't done this with my own REI card, but I have done so with my Discover during a period where they offered 5% rewards. It just showed up on my statement as "PAYPAL *STORE NAME/INFO", so it's basically like any other transaction, and should earn the 1% dividend on all purchases.
The one case I would be still unsure about is if you used PayPal to buy from REI itself, I don't know if that would still register the 5% dividend, it might only provide 1% because the vendor is now technically PayPal.
Again, not an employee nor am I any kind of financial expert. But to summarize I'd use the card directly when buying at REI, while it should be ok to use PayPal everywhere else. But I'd also keep in mind that I don't think PayPal counts as a mobile wallet for the 2% dividend, that's things like Apple/Google/Samsung Pay, based on the footnotes at https://www.usbankgomobile.com/content/usbankgomobile/rei/#/. To be sure I think you'd have to contact Mastercard or US Bank, they're more responsible for the credit cards than REI itself.
Hi @ksavage89 - Thanks for bringing this question to the community! When you purchase something on REI.com using PayPal, you will get the 5% dividend as long as your REI credit card is linked to your PayPal account.
For the 2% mobile wallet dividend that @TomV mentioned, your PayPal account cannot be linked to that feature, so non-REI purchases via PayPal will only receive the 1%. A 2% dividend can be earned in-store by using your phone’s tap-and-go feature or while shopping on a mobile app and paying with your phone's mobile wallet - just be sure your REI master card is loaded into your phone’s wallet and the selected method of payment.
Hopefully this helps. Let us know if you have any more questions.