Yes, it's a promotion Paypal runs every once in a while -- you buy things using Paypal, they give you a 5% rebate on the total of your Paypal purchases for the applicable time period.
You'll find the amount credited to your Paypal account, and a happy note in your email inbox -- go ahead and spend it (if it's enough to bother).
It's much like other commercial promotions where you get a rebate for using services. The trouble is, you have to spend a fair amount to get a rebate worth using. We should also remember that Paypal, being connected with (owned by) eBay, is probably actually just trying to increase eBay profits by encouraging more spending on eBay, where almost everything is paid with Paypal. So, in a way, buyers are getting that cash indirectly from eBay fees paid by sellers.
