April 2006 Archives

Greenpoints has just increased the number of points per dollar they pay for shopping through their program. They had been paying a flat 10 points per dollar for all of their merchants, with the exception of FTD.com, for which they paid 50 points per dollar. Now, Greenpoints is paying 20 points, or 100 for FTD.

The cost to cash out, at least at the $25 level, remains unchanged (a $25 GC is 20,900 points). This means that they have not changed the value of their points, but when you shop, you earn twice what you did before. This is a pretty unusual move for a rewards program -- usually if they begin to pay more per dollar, they'll increase the number of points to cash out to make up for the difference.

Greenpoints may not be finished making changes to their program; when you click on "EARN - smartshop" it still says "Earn 10 greenpoints for every $1 spent..." However, when you click "see merchants A-Z" and then click on a store name, the popup says that you'll earn 20. This could be temporary, or it could be followed soon by increases in the points needed to cash out. But even if this is a permanent thing, it's still nothing to get very excited about, IMHO.

20 Greenpoints per dollar translates to a 2.4% rebate. This is still very low for some merchants like Magazines.com, where you could earn 20% elsewhere. However, it is nice for purchases at BestBuy.com, for example, where most rewards programs may just offer 1% or so.

My friend Andrew of AndrewCram.com has just completed a major revamp of his website and has split off the rewards section into its own dedicated site, RewardsDB.com. He has a VERY comprehensive listing of rebates/points by merchant, including miles paid by frequent flier programs. And, if you were considering getting a credit card that gives you some type of cash back or points, he has some great comparisons in his finance section.

Make sure to bookmark it, or if you forget, I have a permanent link to his site here, on the left-hand side under Consumer Resources / Rewards by Merchant.

I'm going to start this with a brief explanation to members who really aren't sure WHAT Metareward is. Metareward didn't just run NetFlip, they also made their offer portal available to other websites.

If you've ever done one of those signups that require a credit card where you might pay $1 for a month-long trial of a service and get paid $10 for it... then you may very well have been doing a Metareward offer. You just didn't know it, because the portal was personalized for the rewards program you were using.

Now, like me, you may be wondering how Metareward closing is going to affect us. I contacted the owners of a couple of the rewards programs to find out.

My question: Will Metareward closing have an impact on the number and type of offers you're able to offer members of your site?

FusionCash Support replied, "No, nothing significant. There may be some very small payout drops as a result but they had very few exclusive offers. We are already working on a transition gameplan. Most likely, users of FusionCash will not even notice a difference."

James of QuizPoints replied, "We're not concerned. This means less competition...QuizPoints works directly with many different advertisers, and we are positioning ourselves to expand our efforts in direct partnerships."

Chris of CreationsRewards said, "For me, it shouldn't really impact anything. (I did waste a lot of time adding in the Meta offers to the website after I re-launched, and will have to change out links now!) For the most part, the same offers are available elsewhere. I don't see much of an impact since this is not one of our main money makers, and I'll be able to 'recover' most offers from other sources. Going forward, I have a positive attitude, as I am currently researching new ways to earn points for the members. Every so often the industry has an event like this happen, and you simply have to adjust to it."

Dmitry of QuickRewards said, "QuickRewards maintains very close relationships with its advertisers to bring members the newest campaigns on a regular basis. These relationships allow us to constantly add new offers. The fact that Metareward's portal is closing will not change anything since we have other advertisers offering the same offers as well as new offers that we will be adding soon."

So basically they don't seem too concerned. They think they can either work out a direct relationship with the advertisers or find most of the offers through other affiliate programs, so they'll just change some code and members won't see much difference. A few offers may go away. And those that remain may change in value. But the program owners seemed pretty positive and upbeat about it, downplaying the impact that it will have on their members.

If you're a big fan of those offers that require a credit card (and some that didn't), over the next month be on the lookout for some changes. You may want to go ahead and go do some offers in the next two weeks, because some offers may go away or be worth slightly less after Metareward shuts down.

There was an interesting article on ClickZ.com today about Experian's decision to shut down Metareward's incentive business (and to lay off 50 employees). A company spokesperson said, "Over the past year, the effectiveness of incentive marketing has eroded and volumes have dropped. We decided the best move for us would be to exit the incentive marketing space." The author of the article says that the fact that MyPoints was just sold for $56 million, when United Airlines paid $116 million for it a few years ago, "supports Experian's contention that incentive marketing is a shrinking business."

I don't know if I agree with that, but I don't have any industry figures to toss around to back me up. I'd suggest that there's more competition -- many of MyPoints' members found better places to shop for rebates, which is why only about 1/4 of their membership was active, and why MyPoints' income was (relatively) so low.

It makes no sense to me that while online shopping has exploded in the last 5 years, that incentive marketing is "shrinking" -- UNLESS it's not properly being marketed to consumers. Ask a consumer if he'd rather buy directly from FTD.com, or if he'd like to go through a rewards program and get 8% cash back...what do you think he's going to do? I CAN see a point in time where merchants, particularly those that are national and well-known to begin with, will start pulling out of affiliate programs because they'll realize that people will shop with them anyway. Smaller merchants that don't have the marketing pull or name recognition that the big guys have will always need an affiliate program, thus a rewards program, to help bolster their business.

The wheeling and dealing that goes on behind the scenes of one business buying another business is just fascinating. Did a little digging and found out some interesting info about this week's MyPoints sale.

MyPoints.com's former owner, United Air Lines, put a nice little clause in their bankruptcy plan -- they intended to sell MyPoints (which we knew about last September), and when they did, they would give "key employees" a bonus. It's called a KERP (Key Employee Retention Program, which I guess is another way to say, it's an incentive to keep MyPoints running by giving their VIPs a reason to stay until the company was sold). It was a nice little plan, too -- these execs would get a bonus equal to 50% of their salary when MyPoints sold (they'd get half of that at the time of sale and half if they stuck around for 6 months afterward). Plus, if they were terminated after the sale, they'd get another 50% of their salary. THEN, they got another bonus based on MyPoints' selling price -- up to 5% of the value of the business in excess of $11M up to $51M...in other words, since they sold MyPoints for $56M, those execs got somewhere around 5% of $45 million ($56M-$11M). Nice! This bonus would be split among 7 top execs at MyPoints. ** Update, 4/15: Douglas Hacker, a senior VP at United Airlines, decided to step down after completing the sale of MyPoints. In addition to other compensation, he'll get a $2.1 million bonus for selling MyPoints. More info here.

Soooo...MyPoints execs made out pretty good on the sale. But they weren't the only ones. MyPoints' BUYERS got a nice little bonus, too.

In United Online's 8-K filing on March 30, it was stated that on March 27 (about two weeks before they bought MyPoints), their board of directors adopted an acquisition bonus plan that would give seven of THEIR execs a nice little bonus if United Online purchased any companies that helped the company diversify (or if they purchased any of several "target" companies that they didn't spell out in the document). They would get 140 to 160% of their salary as a bonus, depending on who they were and what the target was, and 10 to 30% of their salary as an acquisition bonus, depending on who they were.

So, everyone involved in the sale, both the sellers of MyPoints and their buyers, gave themselves a bonus for a job well done.

Interesting, I thought.

Read for more info here, here, and here.

NetFlip posted a message on their site on 4/5 that they would be "phasing out of service." Members have until 5/5 to complete offers, and until 7/5 to cash out.

In December 2003, the credit reporting agency Experian bought Metareward, the company that owned NetFlip along with several other sites (MisterPoints, FreeGiftCentral, and MovieTicketSource). I visited those other sites this morning and got the standard "enter your email address to take part in our offers" page, and they were saying that "RewardsVenue" was the owner of those sites. RewardVenue.com has the same message on it that NetFlip has -- that it's phasing out of business, but it was posted on the 11th and has a different deadline for earning.

I checked ReveNews.com and someone had posted this from an email sent out on Tuesday by Metareward to their affiliates:

"MetaReward today announced that we have decided to exit the incentive marketing business. Your MetaReward account will not be affected as we will continue to focus on our non-incentive credit card marketing business. In fact, we will be introducing several new credit card products and technologies in the very near future that are targeted to credit card marketers."

Metareward had been contracting out its rewards platform so that anyone can run a rewards program; it would be re-branded with your company name but it would essentially look like NetFlip. So, it looks like Experian just decided to get out of the incentive rewards business. If there were any other Metareward portals that you used (aside from NetFlip), they'll be shutting down also.

(Thanks go to Matt for the heads-up, to Jay Weintraub for breaking the story here and for the interesting article here, and to David Lewis for posting the email here.)

Two hours ago, it was announced that United Online (the owners of NetZero, Juno, and Classmates.com, among other sites) will be buying MyPoints for $56 million.

Note that United Online is NOT related to MyPoints' former owner, United Airlines.

United's CEO Mark R. Goldston: "Our purchase of MyPoints.com represents another major step forward in United Online's strategy of expanding our growing content and commerce business. MyPoints.com is a major name in the online media and loyalty business, effectively bringing millions of active and loyal Internet consumers together with marketers that speak directly to their interests. We are excited about the prospect of offering United Online's over 50 million registered accounts in North America the opportunity to earn MyPoints.com loyalty rewards for many of the activities they are already doing today, both offline and online."

They plan to keep MyPoints' offices in San Francisco and in Schaumburg, IL. (They have 100 employees between the two sites.)

MyPoints has 1.4 million active members...United Online has 50 million. So they didn't get bought out by some podunk business run out of someone's garage. What changes may be coming to the program are anyone's guess, but hopefully (fingers crossed) any changes would only be for the better. Stay tuned.

Yesterday SearchChips.com announced a few changes to the way members can earn chips and also what they can win with those chips. Read the details on their blog here.

The good news: their sole prize will now be virtual Visa cards. **Update, 5/1/06: They are now $10 eCount Virtual Visa cards!

The bad news: You no longer win double if you search using their toolbar.

There are some other changes, too. Read the articles on their blog for full details.

They have chosen their Las Vegas Grand Prize winner but haven't announced who it is yet. It could be you -- stay tuned!

In an article on DMNews.com yesterday, a spokesperson from Betty Crocker discussed the company's decision to discontinue their points/catalog program. She really didn't give an explanation for the decision. She said that they already had a popular rewards program in place, Box Tops for Education. (A nice program -- those little rectangles on participation products are worth 10c to the school of your choice.) She said that catalog circulation had declined, but "not as much as you might think." And last, she suggested that consumers go online to spend their points, because product availability would be most updated there.

So... it sounds like the conclusion to be drawn from this is that BTFE has grown in popularity exceeding that of Betty Crocker Points, and they want to drop down to just one "rewards program."

My guess is that while they still had good numbers for the circulation of their catalog, probably few people were actually shopping from it. The internet has made shoppers savvy -- they were able to see that the points-plus-cash catalog redemptions were available elsewhere for cheaper WITHOUT points, so points were basically worthless.

This is the same lesson that ParadePerks recently learned. If the points you're giving out don't have any real value, you can only string along consumers for so long before they realize it and a) drop interest in the program, and b) resent you for insulting their intelligence... creating DIS-loyalty, the opposite of what was intended.

If you're going to do a rewards program, DO IT RIGHT. Or don't do it at all. A little planning is all that's required. Set it up so that it encourages loyalty to your brand, increasing your sales enough to justify the cost of the rewards. Talk to your consumers ahead of time to see what would encourage them to give you their business. If you don't know what your customers' needs are, how are you going to meet them? Common sense, people.

There's a nice printable coupon out (requires Adobe Reader to print) for members of BestBuy's RewardZone rewards program -- $5 off the purchase of any video game, through 4/15/06, limit one use per RewardZone account. Appears to be no price minimum on the game. Enjoy!

FatWallet FatCash Review - Updated 10/07

Please click here to join.

Date Launched: Cashback portal in/around 2002, website itself in 1999
Reward Per Dollar Spent: Varies
Minimum to Cash Out: None for PayPal, $10 for check
Cash Out For: PayPal or rebate check
Earn For: Shopping, signups
Limit One Account Per: US or Canadian resident 18 years or older with valid email address

Notes:
1. Cash back will be "reported" within 30 days of FatWallet receiving the merchant's confirmation of your purchase. Funds will then be held as "pending" for 91 to 121 days afterward. Next, they'll be listed as "available" and you can cash out for PayPal or for a check (when $10+ is available). Funds will be distributed within 30 days of request.
2. FatWallet's deal forums are unrivaled. Even if you decide to not use FatWallet's FatCash program, the FatWallet forum is a must-bookmark.

Related Articles: FatWallet Settles Into New Office, 2007 Shopping Rebates Comparison Chart, Earn Rewards for Ebay

Interesting Media Articles: This article in the Rockford Register Star, dated Feb. 10, talks about how FatWallet works, and it has some interesting information about their corporate culture. Here, you can read Fast Company's report on FatWallet, named to its 2006 Readers' Choice Fast 50 list of "leaders, innovators, and industry pioneers."

Like FatWallet? Similar websites include: Extrabux, MrRebates, Jellyfish, and Ebates.

updated 10/07

On Tuesday, a 32 year old man from the San Francisco Bay area named Allen Tam was indicted (along with some un-named co-conspirators) for using a computer program to generate clicks at Freeride in violation of their terms of service. The click fraud occured between 2000 and 2002, and the guy obtained the program from his employer at the time. He's facing federal charges of conspiracy, mail fraud, and wire fraud... and they want him to "forfeit" the items he cashed out his ill-gotten points for, including digital cameras, video games, and DVDs. The full story is here.

Okay, my dates are a little fuzzy here, but I'm thinking this occurred during the first version of Freeride (and maybe during their second version, which had a trial run in early '02). If this guy and his cheating partners were even a LITTLE bit responsible for bringing down what was once an AWESOME rewards program...well, boo, hiss on them. (Though Freeride deserves some blame for not having the controls in place to catch it.)

I found it curious that they're asking him to "forfeit" the items he received with the fraudulent points... I mean, it's 4 to 6 years later; they're not going to have the same value even if still in the original packages and unused. (Compare a 2000 digital camera to a 2006 one. It's a dinosaur now.) He needs to be responsible for the value at the time of the theft, in my opinion.

I would also like to know the identities of the other people involved.

A few bad apples spoil the barrel.

I'll update this as more information becomes available.

I got a note yesterday from James at QuizPoints.com asking if I'd test out a new, instantly crediting offer QP was putting online (it's for Eversave, and sure enough, I got my 50 points immediately). He says they're working with a lot of companies to bring QP members more of these offers.

On another note, I cashed out at QuizPoints this morning for $55 in Amazon GCs and got a note within minutes that my order had been shipped. The key to getting a quick redemption at QP is to choose in-stock redemptions. There were a few I was interested in that were not in stock, but they had a wait time of about three weeks. I wouldn't mind that if I had my heart set on one of those -- three weeks is still better than a lot of rewards programs -- but being indifferent, I decided on the Amazon GCs that were in stock.

QuizPoints is a nice site for doing offers, they have competitive shopping rebates, and their customer support folks (hi, James!) are polite and prompt. If you're not a member already, give it a try!

Visitors to ParadePerks.com are being redirected to http://www.parade.com/perks where this message is posted:

"Dear ParadePerks User,

We have discontinued ParadePerks.

For those of you who have earned points sufficient to qualify you to redeem rewards, please return to this site starting April 10, and Parade.com will provide information about how to redeem your accumulated points.

Thank you for participating in ParadePerks.

-The Parade.com Team"

Looks serious and not an April Fool's Day joke (if it IS a joke, it's in really bad taste). Assuming it's true, I'd have to say I'm not surprised. They didn't appear to put much thought into it -- how to value points, how much discount would interest a member in cashing out for a points-plus-cash prize, the different levels of membership (why that was even necessary in the first place), quizzes that could be retaken, potential cheaters, etc.

I'm surprised and sorry to see such an inept effort from a big company like Parade, Inc. A little planning, a little market research, would have made all the difference, and would have left them with GOOD P.R. instead of, now, thousands of p.o.'d members who are not going to have a positive thing to say about Parade.

Parade guys, if you're reading this, please email me. I'd love to hear your side of the story.