February 2008 Archives

DotRebates.com Review

Please click here to visit the site; membership is not required and the service is free to use.

Date Launched: January 2008
Reward Per Dollar Spent: Varies
Minimum to Cash Out: None
Cash Out For: PayPal or rebate check
Earn For: Shopping, signups, referrals
Limit One Account Per: Individual 18+.

Notes:
1. Unique in that you are not required to register for an account in order to receive a rebate -- just shop through the site's links to your desired merchant, then come back to the site and click File Rebates. Provide the details of your shopping transaction (the date, merchant name, and order total). At the bottom of the File Rebates page, in the field that says, "Have a Promotional ID Code? Enter it here:", if you enter the code Comparerewards.com you will get an additional 10% rebate. Every time...it does NOT expire!
2. The program says they aim to pay members for their shopping transactions within a week, rather than holding your rebates in a pending period for 30 days or more like some other programs.
3. They're offering a bonus, extended through March 31, to double your cash back up to $20. This bonus will be held for a brief pending period (15 to 25 days) and is limited to one per IP address. More info is here.

My Take:
Interesting. Different. Their shopping rates are on the average to low side, but when you consider that some rewards programs make you wait weeks, even months, for payment...it may be a trade-off you're willing to make. And with the $20 promotional bonus through the end of March, it may be worth trying out. The site's a little skimpy on merchants right now but they're adding new ones weekly. Remember to enter the promotional ID code Comparerewards.com when filing your rebate in order to receive an extra 10%. Please post a comment about your experience when you use DotRebates; thanks!

Update, 2/27: MyPoints immediately corrected the problem; see the comments to this post. Thanks, MyPoints!
I don't know if I'd call this a major privacy violation, but I've noticed it and thought that MyPoints members should be aware of it: When you do a web search on MyPoints and then click through to visit one of the websites that come up in the results, your first name is transmitted to that website (along with your search term). How do I know? Because MyPoints members are doing web searches and ending up on my site.

I can tell you that MyPoints member Sinda found my site by doing a MyPoints Web Search for "reward tv" and Barbara, Jessica, Debbie, and Dan found me by searching for "mypoints". Maria looked up "mypoints.com," while Kate and Jessica found me by doing a MyPoints Web Search for "extrabux."

If you'd like to review MyPoints' privacy policy, it's here. If you have a problem with MyPoints' transmission of your real first name to any websites you visit through searches on the MyPoints Web Search, I'd suggest you email them at memberservices@mypoints.com

JackpotRewards.com Review

COST: $3 per week after a free trial, charged to your credit card quarterly

Please click here to join.

Date Launched: 2/20/08
Reward Per Dollar Spent: Varies
Minimum to Cash Out: $20 per quarter, sent automatically (if minimum not met, earnings roll over to next quarter).
Cash Out For: Rebate check
Earn For: Shopping, signups, referrals
Limit One Account Per: Unclear; appears to be U.S. residents 18+. Javascript must be enabled on your computer.

Notes:
1. Jackpot Rewards says it's giving back all of its commissions to its members, in return for their payment of the membership fees.
2. The site offers additional features such as free classifieds, sweepstakes (a guaranteed $1 million a week giveaway), and a greatly discounted deal of the day.

My Take:
$156 a year is a steep price to pay for services available for free elsewhere on the internet. From the standpoint of shopping rebates, yes, you can SOMETIMES earn more through Jackpot Rewards than from other rewards programs that aren't subsidized by membership fees. A full list of merchants and rewards offered is here, so you can compare their rates at a glance with those of other free rewards programs.

I took a look at JackpotRewards' rates compared to other free shopping rebate sites and the results were mixed. I examined the first 25 merchants from last year's shopping rebate comparison that Jackpot offers a shopping rebate for, and compared them to the current rates offered by the merchants in the chart. The results were mixed. For 12 of the 25, Jackpot offered a higher rebate. For the remaining 13, you could earn the same or MORE by shopping through a free rewards program. The average across all 25 merchants: you'd earn an extra 0.8% overall by shopping through Jackpot Rewards. Keep in mind that for some merchants you'd earn the same, or less, than you'd earn elsewhere.

Do you shop online enough for that extra 0.8% on average you'd earn from shopping at Jackpot Rewards to earn back the $156 a year in membership fees? If so, then this site's for you. Doing the math, though, that would require you to spend $19,500 online a year JUST TO BREAK EVEN.

But for the rest of us...no. Not worth it.

Related Articles: Jackpot Rewards Drops Guaranteed $1 Million Weekly Sweeps Winner, JackpotRewards.com Announces First One Million Dollar Sweepstakes Winner

I had some extra time on my hands this morning, so I used a cool crossword puzzle creator tool on the Millstone coffee site to create a rewards program-themed crossword puzzle. Here it is if you want to give it a shot.

I've mentioned here before that Greenpoints' owner, PayByTouch, was in financial troubles and was looking to sell off its "non-core" business. Word is now that with no buyer, both "halves" of the business are up for auction. It was initially scheduled to go to auction yesterday, but it's been delayed for some unspecified reason. More info is here.

I did. And this quarter, the check was more special than usual for two reasons: one is that it's the largest cashback check I've ever received from Ebates ($422.09). The other is that it's the first check I've gotten from Ebates since I visited them in December and saw the Big Fat Check Printer for myself, up close and personal. :)

Want to see the Big Fat Check Printer for yourself? Continue reading!

Update, 2/10: NetWinner is offering Mega Multiplier MoneyWheel again today but only on their affliated websites, not on NetWinner's main website. Good luck to all!

In honor of President's Day, NetWinner is offering multipliers on every MoneyWheel spin today -- win a multiple of 2, 5, 10, or 25 times the usual point value with every spin. If you're not a member of NetWinner, please join here -- thanks!

Enjoy the news and tips you read on CompareRewards but have trouble remembering to come by and read it? Sign up today for the CompareRewards Insider, a newsletter sent bi-weekly through YahooGroups that summarizes the latest and greatest news from the rewards program world.

Interested? Sign up today by sending an email to me here with "Subscribe" in the subject line, and look for your first newsletter in your inbox soon!

Update, 4/08: I'm afraid NetWinner's days may be numbered; I no longer recommend this program. Please see these updates: April 29, April 27, April 17, April 11.

I've heard a lot of complaints about the NetWinner program lately, on the forums and by email, and because it's one of the programs I review here on CompareRewards, I decided to look into this. I submitted a support request on the site on Sunday and asked for someone at NetWinner to provide their side of the story. I was immediately emailed by Matt Coapman, one of the site's founders and their VP of Business Development, who set up a phone call to discuss my concerns.

On Monday I spoke with Mr. Coapman at length about the complaints I've been hearing about NetWinner and about the site's future. I found him to be very polite, informative, and quite patient with my many questions (some of which were pretty pointed). I was impressed with his openness, and his enthusiasm about the site is pretty contagious.

When typing up my notes about the conversation (which I won't call an "interview," because I'm not quoting him exactly), I had some follow-up questions which NetWinner's Director of Communications Steve Goldberg was gracious enough to address by email yesterday. Big thanks go out to Matt Coapman and Steve Goldberg for taking the time out of their busy schedules to talk with me about their program.

Click "Continue Reading..." for the summary of my conversations with NetWinner!

I've written here before about debit rewards programs like Visa Extras and Affinity Solutions (e.g. Check Card Rewards, Cash Bonus Rewards). These programs, offered through your bank, pay you for shopping online or in-store at certain merchants -- or any merchant, depending on the rewards program -- and making a purchase with your debit card and signing for it as if it were a credit card (versus using a PIN).

These programs are great for consumers, who get something back for shopping. They're great for banks, who receive twice the fees compared to PIN transactions. They're NOT, however, all that great for the merchants who have to pay the fees.

Today's Tampa Tribune has an article titled, "Debit Cards Cash In On Rewards Riches," by Michael Sasso. In it, the author notes, "Retailers warn that they will have to pass along those costs to consumers through higher prices."

Merchants have to offer credit cards as a payment option these days. They have no choice but to pay the fees when someone uses one. Banks encouraging customers to sign instead of using a PIN is almost like forcing the merchants to be involuntary participants in a rewards program. They have to fork over more of their profit to the bank who, kindly, shares some of the wealth with the customers. But that extra cost on the merchant has to be paid for some way, which is...you guessed it...higher prices.

Remember when, once upon a time, there were two different pricing systems for gasoline, with cash customers getting a discount over credit card customers? I don't know what happened to that, but I can understand the logic. Cash customers don't incur credit card processing fees.

Wouldn't it be amusing if merchants put in place an alternate rewards program, rewarding customers for paying cash? The merchant could offer customers half of whatever they would pay the bank for credit card processing fees, and they'd still come out ahead.

Just a thought.

Or, a more boring title, "The Significance of Marketing to Females Online." (The original is more catchy, don'tcha think?)

I came across an interesting article on ChiefMarketer.com called, "E-commerce: Meet the New Boss." Author Dave Friedman shares some interesting statistics about female online shoppers, drawing the conclusion that it's important to understand women, what they want, how they operate, and then to market to them.

I thought the statistics cited in the article were interesting. Women place more importance on value over brand names, except when buying for themselves, it says. (If true, what does that say about us? We're cheap when it comes to the husband and kids but we splurge on ourselves?) Women like to share information about shopping (no duh) -- we're more likely to forward emails, and 3 times more likely to tell others about our shopping experiences, good OR bad. (We like to talk, no big surprise there.) While there are more middle-aged women (35-54) that shop online than any other gender or age, younger women (25-34) have more discretionary income and spend more online (that's because they're less likely to have children).

So we like to talk, we like to shop, and we like to talk about shopping. We let people know about our good shopping experiences, but tick us off and, well, hell hath no fury...

The implication of all this? Online merchants, when designing their loyalty programs, and rewards programs of all types (online and off-), need to think like a woman. Find ways for us to communicate with one another, and work hard to be sure we can only say positive things about our shopping experiences. Women can be very, very loyal, but it doesn't take much to tick us off and when it happens, it's hard (if not impossible) to win us back. And give us good deals. We like those. :)

The December before last, I had the pleasure of talking with Gregory Karp, a personal finance reporter for the Chicago Tribune's family of newspapers on the topic of online shopping rewards websites. He was interested and enthusiastic about learning more and about sharing this information with his readers. Our conversation was incorporated into a two-part series that explained what online shopping portals were and how to use them.

Mr. Karp just published a book called Living Rich by Spending Smart: How to Get More of What You Really Want. It includes a lot of great advice he's shared with his readers over the years about how to eliminate wasteful spending and how to make the most of your money. I just started reading it and was honored to find a mention of CompareRewards in the book, as the place to go to get more information on how rewards programs work. (Thanks for the mention, Mr. Karp!)

His advice about rebate portals (I call 'em rewards programs) is to stick with cash-based ones and avoid points programs. He specifically endorsed FatWallet, Ebates, QuickRewards.net, and Jellyfish.

In an interview about the book, Mr. Karp says, "Spending Smart is not a 'live cheap, die loaded' plan. I don't talk about making sweater vests from dryer lint or separating two-ply toilet paper into two rolls. Spending Smart is about plugging the leaks of wasteful spending -- spending on purpose rather than by accident and habit. That way you can redirect money away from things you don't care about and spend it on things you do care about...Remember, you can't out-earn dumb spending."

I haven't read the entire book yet but I have really enjoyed it so far. If you'd like to pick up a copy at Amazon, it's on sale for $12.23, 32% off list price...I think Mr. Karp would approve. :)

The quarterly conference call between MyPoints.com's owner, United Online, and its investors took place last night and SeekingAlpha was kind enough to post a transcript of the call.

According to Mark Goldston, United Online's CEO (the guy you see in the TV ads for NetZero), Classmates Media (which is Classmates.com and MyPoints lumped together) has "over 58 million numbers with virtually identical demographic characteristics. That's roughly 65% female, 85% over 35 years old, more than 75% attended college and their average annual income is approximately $75,000." In addition, he says that there is "minimal overlap" between the two sites' memberships, creating a "big opportunity."

Classmates Media accounts for 42% of United Online's total revenue, Goldston said. In the fourth quarter of 2007, Classmates Media had "another strong quarter with significant growth in revenue." The fourth quarter is always strong for rewards programs -- people are doing their holiday shopping then. Goldston said that MyPoints had "another solid quarter" (the last quarter of 2007). He said response to the MyPoints site redesign was "outstanding" and "tremendous." "It's got great levels of engagement versus the previous site...the guys at MyPoints have told me they couldn't be happier with the way that part of their business is performing and what the new redesign has done."

He also discussed how MyPoints is monetized. Their revenue from MyPoints comes from three "buckets," as he describes it: Media services (emails and newsletters), the shopping portal, and targeted surveys. Members are targeted for offers based on demographics (be sure you've completed your full MyPoints profile, in other words!). Newer MyPoints offerings like the surveys, plus games and the search toolbar, will be joined by some other new initiatives this year, Goldston said, designed to give MyPoints members "even more compelling reasons to engage with MyPoints and build their points balances."

Further down the road, in 2008-2009, there are plans to integrate MyPoints with Classmates, something that "could potentially prove transformational for the MyPoints business."

That's one thing we've learned in watching rewards programs' evolution over the years -- the only thing that's certain is change. Sites that don't change, don't evolve, shut down. I like sites to be stable, but not to the point of becoming stale, or where you get the impression that no one is running the show. So, while I don't foresee any MyPoints incentive that would get me to upgrade to paid member status at Classmates (I can find former classmates for free through other methods), I can see a situation where Classmates could offer incentives to get me more active on their site -- posting on a forum, for instance -- through offering MyPoints.

Goldston went on to talk about the failure of the IPO spinoff of Classmates Media. He said that the timing was bad because of a "tumultuous market" and skittish investors who didn't want to buy stock in technology companies, plus going public at the end of the year was a bad time because investors worry that a new stock could perform badly and make the rest of their portfolio's overall annual performance look bad. Making Classmates Media its own reporting segment will help show how well it really performs, so they can try for another IPO at a later date, Goldston said.

The conference call was interesting, as always. If you'd like to join MyPoints, please click here (aff).

Source, Inc., the company suing 38 rewards programs for infringing upon its patent for a "Centralized consumer cash value accumulation system for multiple merchants," is no stranger to the Marshall, Texas courtroom.

In August 2005, Source sued American Express in Marshall. (Read their amended complaint here.) They claimed AmEx was infringing the same patents they're suing the 38 rewards programs for now. AmEx denied their claims, and the case dragged on, with a flurry of motions and filings on a weekly basis, until an out of court settlement was reached in November 2007.

Also in August 2005, Source sued Cendant Corp. in Marshall. Same claim, this time against Cendant's TripRewards program. Cendant denied their claim, and though this case wasn't as active as AmEx's, there were still a good number of motions filed. Eventually both parties agreed to dismiss in August 2006 (Cendant sold TripRewards the previous month). According to the financials of TripRewards' new owner, Wyndham Worldwide (see page 45), the two parties discussed a "nuisance value settlement," but in the end decided to dismiss the suit and to explore "possible business solutions."

In October 2004, Source sued Rewards Network Inc. in Marshall. They run RewardsNetwork.com, and you guessed it, it was the same patent infringement claim. Rewards Network denied the claim and countersued for trademark infringement for Source's use of "Rewards Network." :) In May 2006, the parties settled. The motion to dismiss didn't mention a settlement, just that each party would pay their own legal fees. We know that a settlement was reached; the terms are mentioned in Rewards Network's financials here.

In May 2003, Source sued Stockback for patent infringement in Southern Texas district court, but Stockback was able to get a change of venue to New York. They reached a settlement later in the month, and the case was officially dismissed in June 2004. (Vesdia bought Stockback in April '04.) In January of 2005, Vesdia announced it had expanded its patent license to include its other rewards programs, BabyMint (sold later that year), NestEggz, and FundraiserRewards, at a "significant investment."

Source may have been busy suing people before 2004, but that's as far back as I could research online.

Not all companies are willing to settle with Source. In December 2006, their lawyers sent a letter to Rainbow Rewards USA, headquartered in Denver. Source told them they were infringing upon their patent and said they were willing to negotiate mutually beneficial licensing arrangements. Apparently the negotiations didn't go so well, because in February 2007, Rainbow sued Source in Denver, asking a judge to examine the patents and conclude, as they do, that the patents don't apply to their business. (Their amended complaint is here.) The case is still ongoing. Last month, Source finally answered Rainbow's complaint, and -- very tellingly, I think -- they're saying that Denver is an inappropriate venue for a patent suit because they only do business in Colorado via their websites. (Hmmm...so how is it that you can sue rewards programs in Marshall, Texas when they only do business there via their websites?) Source is countersuing Rainbow for, of course, patent infringement, demanding treble damages because Rainbow is infringing willfully. The filings have been fascinating reading, and the lawyers in the current case against the 38 rewards programs will, I'm sure, use some of Rainbow's attorneys' arguments about the invalidity of the patents in their case as well.

So, what exactly does Source, Inc. do?

The company, founded in 1992, sells "SCORE INFO" rewards program memberships for $39.95 a year (renewals are charged annually to the same credit card used for initial signup). Once signed up, a member can use the HELP Worldwide Network (online shopping mall) to shop and earn rebates. The member also gets a physical swipe card to use at participating stores -- at least, in theory. There's no list of participating B&M stores available on the site. Rebates are paid to the member by bank draft or check when his account exceeds $25 (or the member can choose to donate all or part of his earnings to a charity). "Processing fees" will be deducted. Payments are made twice a month, after a 60 day pending period.

The way the card is supposed to work is this: the member visits a participating store, pays his bill however he chooses, but afterward he swipes his loyalty card in a machine, enters the amount of the purchase, gets a "declined" message, and then his card is returned. Source gets notice of the transaction this way, and they then credit the member's account (and I'd assume, they bill the merchant a percentage of the transaction as well).

Their online mall, now, is what I find to be interesting. You can shop through their portal without being a member, forfeiting any rebate earnings from your purchase. Checking out the destination links for their merchants, it seems Source, Inc. is using the Commission Junction and Linkshare affiliate programs to power their online mall.

If you're not familiar with how affiliate programs work, they serve as a middleman between merchants and marketers. Merchants pay the affiliate program, then the affiliate program pays marketers to promote the merchants. Rewards programs are one type of marketer. Whenever you see a banner ad on any website, chances are, that website is another type of marketer signed up to these affiliate programs like CJ and Linkshare.

The question I have from this is, why hasn't Source gone after the affiliate programs? The wording of one of the patents (5287268) is at least somewhat similar to what affiliate programs do: "...Each participating merchant may set its own credit rate for cash value to accumulate on each sale irrespective of a rate set by any other merchant...Because the information related to credits and accounts is handled at a centralized system, the merchants are freed from handling the paperwork and/or devoting valuable computer time and space and operating personnel to the management of the cash value accumulating system." Not only is Source NOT suing the affiliate programs, they're actively using them to power their own online mall!

"Why isn't MyPoints included in the suit?" people have asked. I noticed some other omissions from the list of those sued as well. My guess is that MyPoints, and the others, are point-based, and the patents are for a "cash value accumulation system." Not being a lawyer, though, I can't say for sure and I would not advise management of points-based rewards programs to assume they're off the hook for being sued by Source.

More details as they become available. If you're with a rewards or affiliate program and would like to comment, on or off the record, I'd love to hear from you.

Ebates (aff) is holding a 14-hour-long shopping extravaganza tomorrow, 2/7, starting at 10am PT (1pm ET). During that time, the site will feature increased cash back at select merchants. If you haven't had a chance to pick up your Valentine's gifts yet, this would be the time to do it! And when you join with my link (above) and place your first order with the site, they'll deposit a BONUS 10 bucks into your account just for trying them out!

You're going to order flowers for Valentine's Day, you might as well earn the most rewards for it, right?

I re-examined shopping rates for at 15 online florists for these rewards programs (click the program's name to join the site with my affiliate link; thanks!): BabyMint, BondRewards, ClubMom, Ebates, Extrabux, FatWallet, Jellyfish, MrRebates, MyPoints, QuickRewards.net, and Upromise.

Here are the most current shopping rebates I found for these 15 online florists:

1800Florals: 19% at Jellyfish, 15% at Extrabux, 8% at MrRebates

1800Flowers: 10% at Upromise, 9% at Extrabux, 8.5% at BondRewards, 8% (plus coupons for $10 off or 10% off) at Ebates , 6% at QuickRewards.net, 5% (10 pts per dollar) at ClubMom, 4% at FatWallet and BabyMint, $3.85 (500 pts, regardless of order size) at MyPoints

Beyond Blossoms: 17% at Extrabux, 11% at Ebates, 10% at MrRebates and Upromise, 8% at QuickRewards.net

Florist.com: 11% (on florist-delivered goods) at QuickRewards.net (or 5.5% on FedEx or vendor-shipped items), 10% at Upromise, 6.8% at BondRewards, 5% (plus 20% off coupon) at Ebates, 5% at MrRebates

Flowers Fast: 10% at Ebates, 7% at QuickRewards.net

FlowerStore: 15% (and a 10% off coupon) at Upromise, 15% at Jellyfish, 11% at Extrabux, 10.2% at BondRewards, 8% (and a 10% off coupon) at MrRebates, 7.5% (15 pts per dollar) at ClubMom

From You Flowers: 20% at Jellyfish, 16% (and a 10% off coupon) at Extrabux, 12% at Ebates, 10% (and a 10% off coupon) at Upromise, 7.5% at QuickRewards.net

FTD: 15% (30 pts per dollar) through 2/10 at ClubMom and 7.5% after, 10% at Ebates, FatWallet, and Upromise, 6.8% at BondRewards, 5.5% at QuickRewards.net, 5% (and a 10% off coupon) at MrRebates, 5% at BabyMint, $3.85 (500 pts, regardless of order size) at MyPoints

Hallmark Flowers: 11% at FatWallet, 10.2% at BondRewards, 10% (and a 15% off coupon) at Upromise, 10% at Ebates, 9.3% at QuickRewards.net, 8% at MrRebates and BabyMint, 6% (12 pts per dollar) at ClubMom, 3.8% (5 pts per dollar) at MyPoints

Martha Stewart Flowers: 6% (plus a 10% coupon) at Ebates, 5.95% at BondRewards, 4% at Ebates and BabyMint, 3.5% (7 pts per dollar) at ClubMom, 3% at QuickRewards.net

Overstock (yes, they sell flowers, and gift baskets, too): 7.7% (10 pts per dollar) at MyPoints, 4% (and free shipping or $5 off $100 codes) at MrRebates, 4% at Ebates, FatWallet, and BabyMint, 3.6% at QuickRewards.net, 3% at Upromise, 2.5% (5 pts per dollar) at ClubMom, 2-5% at Jellyfish, 1% (and a $5 off $100 code) at Extrabux, 0.85% at BondRewards

Proflowers: 12% at MrRebates, 10% at Ebates, FatWallet, and Upromise, 7.1% at QuickRewards.net, 6.8% at BondRewards, 5% at BabyMint, 4% (8 pts per dollar) at ClubMom, $3.85 (500 pts, regardless of order size) at MyPoints

Spring Hill Nursery: 9% at FatWallet, 8% at Ebates, MrRebates, and BabyMint, 7.6% at QuickRewards.net

Teleflora: 10% (and a 10% coupon) at Ebates, 10% at FatWallet, 9% at MrRebates, 8% at Upromise, 5% at QuickRewards.net, BabyMint, and ClubMom (5 pts per dollar)

USAFlorist: 17% at BondRewards, 12% at Ebates, 10% (and $5 off coupon) at MrRebates, 10% at Upromise

Latest update on the case is here.
On January 23, Source, Inc. (a California corporation) filed suit against 38 rewards programs for patent infringement. They say that several patents issued to a Patrick D. McCarthy of Louisville, KY (one in 1990, one in 1993, one in 1994, and one in 1999) had been obtained by Source, and that the defendants infringed upon it willfully and deliberately and used it to "reap unjustified profits." Source is demanding an injunction against all the programs and, of course, an unspecified amount of money to include compensation for the infringement, plus costs, interest, fees, and treble damages.

The list of defendants is huge and includes some rather familiar names around these parts: Access Development Corporation, bCorner.com, Inc., Belcaro Group, Inc., Big Co-Op, Inc., Intefral Technologies, Inc., 77BlueLLC, Ebates Shopping.com, Inc., Electronic Scrip Incorporated, The Ezshoppen Company, FatWallet.com, Inc., iGive.com Holdings, LLC, JellyFish, Inc., Jet Set Joe Corporation, Little Grad, Inc., MBC Direct, LLC, Mall Networks, Inc., Misermart.com, Inc., Mezl Media, Inc., Mothers Work, Inc., OC Rebates, Pinnacle Communications International, Inc., Qdeals, Inc., QuickRewards Network, Inc., Shop.com, Simplicity Group, LLC, Spree.com Corporation, Tricordia, LLC, Tuition Fund, LLC, Webloyalty.com, Inc., Zions First National Bank, Alliance Card, Inc., Family Network, Inc., JPMorgan Chase & Co., Golden Retriver Systems, LLC, Summit State Bank, Nietech Corporation, U.S. Bancorp and U.S. Bank.

You can view the full text of the lawsuit here.

I contacted several of the companies involved for their reaction to the suit.

Alessandro Isolani, the founder and CEO of Ebates, said that the patents were vague and didn't describe Ebates' operational model at all. He insisted that Ebates was the first website of its kind and said that the company would defend itself aggressively against these claims.

FatWallet, via Steve in Customer Support, responded to say that FatWallet had not yet been contacted in any way by Source, Inc. Should it happen, though, this would "have no impact on our ability in continuing to provide all of our existing services to our customers."

This is not the first time that Source, Inc. has gone after companies it feels are infringing upon its patents.

In April of 2004, Upromise gave in to Source's demands and settled their lawsuit out of court.

In April of 2006, Rewards Network, Inc. also gave in to Source and agreed to settle their 2004 lawsuit (for the whopping sum of $1,000).

The company behind BabyMint, NestEggz, StockBack, and FundraiserRewards, Vesdia Corporation, has already paid Source's licensing fees.

Are companies paying Source, Inc., because they feel Source's patent claim is legitimate, or is it because it's just cheaper and easier to pay them off than to fight a lengthy court battle, and in east Texas of all places? (Why east Texas? Because Marshall, Texas has a judge that's very pro-patent troll.) If Source has a legitimate claim, why have they waited this long to go after some of these players, like Ebates, which has been at this rewards program business since the beginning? And why, exactly, is Source going after the rewards programs and not the affiliate programs like Commission Junction and Linkshare, whose business models are much more in line with what McCarthy's original patents describe?

Something here just seems a little...strange.

I'd like to hear more reactions from other rewards programs; please leave a comment to this post or email me directly; thanks!