The Crunch: Loyalty programs are a popular way to connect with and reward customers, but the restrictions on when, where, and how consumers can redeem rewards can make them more of a hassle. Rewards.com, a leading cash back shopping site and online rewards clearinghouse, is seeking to remove those barriers with an innovative redesign of today’s loyalty programs that incorporates cryptocurrency and blockchain technology. The revolutionary program would replace points with cryptocurrency tokens to give consumers more control over how they spend their rewards and give more merchants a chance to participate. Leveraging the growing interest and global reach ofi cryptocurrency, Rewards.com even gives shoppers the option of trading tokens on the cryptocurrency exchange.
Loyalty programs sound like a great deal. But when customers want to redeem their points, they often run into blackout dates, minimum redemption qualifications, and other restrictions. Rewards.com wants to change that experience by introducing a new loyalty program that uses blockchain technology to give consumers more choice and control over how they redeem their rewards.
Rewards.com co-founders Linda Butcher and Todd Rowan said the new program will also benefit small businesses and service industry brands that have historically been unable to participate in large-scale loyalty programs.
With the new Rewards.com program, consumers earn RWRD cryptocurrency tokens on their purchases. Customers can then use those tokens in the Rwards.com marketplace, which features more than 100 million products from 7,000 partner merchants. They will also have the option of trading the RWRD tokens on the cryptocurrency exchange.
“Instead of earning a loyalty point or airline mile, you earn cryptocurrency that you can use anywhere because it actually has real value,” Linda said. “It’s not like a point that’s just going to vaporize when you use it. We thought it was a perfect match for the loyalty shopping industry.”
The introduction of the RWRD token and the global marketplace is the latest in a series of loyalty program innovations from the co-founders of Rewards.com. Todd has more than 20 years’ experience helping craft loyalty shopping programs for American Airlines, Charles Schwab, Amex, Bank of America, United Airlines, Sony, Marriott, and other top companies.
Linda’s background in strategic alliances and business development enables her to build and maintain partnerships with Rewards.com’s member merchants, a group that includes Walmart, Nike, Home Depot, Groupon, Hotels.com, Subway, and thousands of other well-known brands.
In June, Rewards.com will convert all cash back rewards on its platform to its new cryptocurrency RWRD token. The company will also expand the geographic reach of its marketplace and introduce a mobile shopping app to go along with its innovative new loyalty program later in the year.
Fixing the Loyalty Program System to Give Consumers More Control
Rewards.com launched its new loyalty program with a white paper that included a history lesson on the development of the very first loyalty program that dates back to the 1700s.
According to historical references, American merchants began giving out copper tokens to their customers to encourage future purchases. Fostered out of a desperation for repeat business and a little creative marketing, these merchants unknowingly ignited a spark that launched a billion-dollar industry.
Rewards.com estimates the worldwide loyalty and incentives industry grows at an annual rate of 30%. About 85% of the world’s consumers are enrolled in some type of program with $300 billion worth of rewards points distributed annually.
But Linda said the current model is broken: The limitations and restrictions on earning and redeeming rewards frustrate consumers, leading to unredeemed points. And the liability of those unredeemed rewards plus the additional task of managing rewards programs add up to big headaches for businesses.
That’s why Rewards.com developed the more universal loyalty program so, for example, customers could earn RWRD tokens at a participating auto garage and then redeem them using the program’s mobile app at a participating restaurant.
“You get to use it for whatever you want to use it for, whenever you want to use it,” Linda said. “That’s the beauty of it — the consumer decides what they want to do.”
Providing an Opportunity for Small Businesses to Participate
Smaller retailers and restaurants frequently offer some form of loyalty program to encourage repeat business. Often, it takes the form of a small-scale program such as the buy-nine-get-the-tenth-free punch card. When it comes to the large rewards programs that reach a vast consumer audience, those small business owners typically find barriers to entry.
“It isn’t because the local merchant doesn’t want to participate,” Linda said. “These big loyalty programs are expensive and exclusive.”
Linda explained that Main Street stores like nail salons and local eateries aren’t typically invited to participate in larger loyalty programs from an airline or a hotel chain.
“It’s not necessarily that they’re slow to adopt, there just aren’t any cost-effective options for them,” Linda said. “We think we’ll definitely be a cost-effective option because we’re free, and that will allow the smaller merchants to participate in the same loyalty program.”
The Rewards.com loyalty program is aimed at inclusivity, allowing customers to still earn rewards on everyday purchases, such as dog food, clothes, and toothpaste. And, because there is no cost for businesses to participate, Linda expects plumbers, electricians, and other service industry members to take part in issuing and redeeming RWRD tokens on similar routine purchases.
How Rewards.com is Building a Universal Loyalty Program Around the Growth of Cryptocurrency
While the concept of loyalty programs date back to the 1700s, today’s merchants need a better way to connect with and reward loyal customers. And Rewards.com has devised an innovative update to loyalty programs of yore.
By issuing its RWRD tokens, a cryptocurrency that can be redeemed for products or traded on the exchange, Rewards.com taps into a modern trend to reward 21st-century customers. With the cryptocurrency market predicted to reach more than $6 billion by 2025, more businesses are expected to leverage blockchain technology.
And Rewards.com expects to grow right alongside that market, offering its program and RWRD token so consumers have more choice in how and where they redeem the rewards they’ve earned.
“I think the RWRD token and the global marketplace are going to be phenomenal for the same reason a bitcoin is,” Linda said. “It crosses borders. It doesn’t need a third-party to manage it, and the community loves it because they’re the ones getting to take advantage of it and getting rewarded. That’s basically what a loyalty program should do too.”