Flooz comes up flat-footed

Flooz.com, a New York-based online currency company promoted by actress/comedian Whoopi Goldberg, has suspended operations. The company reportedly is seeking a merger partner, though officials at Flooz did not return calls. A message on the Flooz.com web site states: “We are currently unable to process your transaction. We are working very hard to resume Flooz.com web site operations. Check back for further updates.”

Flooz positioned itself as a gift-giving solution. Users could buy Flooz currency online and in turn, recipients could use the online currency to make purchases at major online retailers including Godiva.com, Jcrew.com and others. The company had upwards of 50 merchants signed to accept the currency. More than half of Flooz.com’s business came from corporate accounts, where employers used the currency as incentives or rewards for employees and clients. Merchants had to pay a transaction fee “in the lower double digits” to accept the online currency, officials have said.

Flooz envisioned its product becoming a closed-system online network of merchants at which Flooz users could make online transactions. By creating a network of popular merchants and a captive audience of users who can only spend Flooz within the Flooz.com merchant list, the company had hoped to generate online sales for merchants and help them cut customer acquisition costs. Late last year the company reported that it had a customer base of about one million accounts.