For its in-store loyalty program, LocalBonus bets on credit cards

By November 15, 2012 1 comment
Keywords : Smart city, America, loyalty
woman giving a credit card to a merchant in a store

LocalBonus frees shop owners from dedicated devices and specialty software. Merchants can build loyalty with customers who don’t own smartphones and reward them with cash.

While it was mobile tech that spurred much innovation in the merchant rewards and loyalty industry, startups are now developing more flexible services for customers and merchants. LocalBonus lets consumers connect existing credit or debit cards to their reward system that automatically generates cash benefits at shopping or food service locations. This service is particularly easy for merchants to participate in because they do not need any proprietary devices or hardware - in addition to the familiar benefits of encouraging customer loyalty through points and rewards, as well as discoverability through the LocalBonus network and app. Merchants also can access a wider consumer base, since customers do not need a smartphone, only their linked payment card.

Merchants can incentivize non-smartphone owners

LocalBonus is currently in several US cities, such as Denver, Portland, Sacramento and Seattle, as well as in its headquarters of New York. The app is free, but since member accounts are connected to a payment card, customers do not need to own a smartphone. But it does make it easy to see which participating merchants are nearby, as well as to check account status and access special offers that LocalBonus posts to Facebook and Twitter. In addition to widening its potential member base by basing it on tech that many Americans already have - a bank card - rather than if they own a smartphone, LocalBonus rewards customers with cash, a much more tangible perk than discounts or deals.

Customers get cash rewards that they can use outside of the LocalBonus network

The cash that members receive after they have collected points does not even have to be turned in to LocalBonus merchants. When customers have collected at least $10 in LocalBonus cash, they can receive it via PayPal or check, to spend as they like. But there are incentives to keeping the money within the system for as long as possible. If a member collects 4,000 points, she can trade it in for $10, but the more points get collected, the more cash it ends up being worth. So if she collects 50,000 points, that can be traded in for $250, making each point effectively worth twice as much. Hence, users are encouraged to remain loyal not only to merchants, but to LocalBonus too. 

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1 Comment

I'm pleased to learn about LocalBonus. This is a great innovation indeed and for credit card users such creation is quite beneficial to get reward by using LocalBonus. I'm impressed and looking forward to utilize it to get bonuses after purchase. Thanks.

Submitted by Dinesh (not verified) - on February 28, 2013 at 03:01 pm

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