A Forrester Research report analyzes the early successes and failures of Apple’s mobile payments system.
The mobile loyalty app replaces paper versions.
The problem with punch card loyalty programs for many retailers is that many consumers forget to carry the cards on their visits, causing the retailer to issue yet another card. Recognizing that many consumers are never without their smartphones, Punchcard has released its self-named mobile loyalty app for iPhone and Android devices.
It works like this. After making a purchase at a participating merchant, the consumer snaps a photo of a receipt using the Punchcard app. That image is sent to a Punchcard server to verify the transaction. Once Punchcard verifies the transaction, a “stamp” is applied in the consumer’s app, showing she made a purchase at that business. This prevents the user from filling up a Punchcard without making purchases, a Punchcard spokesman says.
Upon completing a merchant’s Punchcard, the consumer receives the reward, which could be a check or a coupon for a future transaction. Most merchants choose the cash-back reward, says Punchcard, which mails the checks to eligible consumers.
Merchants pay $99 a month per location to participate, and each retailer determines the rewards amount. Typically, Punchcard suggests a merchant’s average order value as the rewards amount. Merchants also control the type of non-cash offer, such as a buy-two-get-one-free deal, the spokesman says. Punchcard is free to consumers.
The Punchcard m-commerce loyalty app is available at more than 147,000 businesses in Southern California, the company says.