Shoppers want a discount, and they want that discount online – just look at how early Black Friday-type deals started on Amazon.com Inc.
One way retailers are attempting to increase shopper loyalty on the Web is by partnering with cashback websites. Think rebates, except not in the context of over-paying.
Splender, the brainchild of Lexington-based Cartera Commerce Inc., a provider of company-based online shopping loyalty programs for airlines, financial institutions, and retailers, is a cashback website that launched in June.
Splender has 5,000 users, said Erin Warren, Splender’s senior vice president of marketing, still just a a drop in the bucket compared with the 17 million users on Upromise, a cashback site for college students.
But Splender is at an advantage, said Paul English, cofounder of Blade and Kayak. Starting on day one, Splender already had a relationship with more than 800 retailers – all of Cartera’s connections. English describes Splender as a startup (about 15 of Cartera’s 110 employees focus on Splender), a smart business decision by Cartera to allow the business-to-consumer site to grow at a startup pace – faster.
Joining Splender, like all cashback sites, is free. Shoppers start at the Splender website, find the retailer or deal that appeals to them, and click over to that desired website. Backend tracking recognizes the jump from Splender to a third-party site, and shoppers earn an average of 5 percent to 10 percent cash back, Warren said. That’s not necessarily reason to alter shopping habits, but Warren said shoppers don’t realize that they can use coupon codes and receive cash back on the same purchase.
“They should be figuring out how to stack these things so that I’m getting the best deal overall,” she said.
Only 5 percent of US online shoppers use cashback services, but 60 percent of consumers use coupon codes, Warren said.
Ebates, one of the most popular cashback services that launched in 1998 and now has 1,800 merchant connections, pays consumers back every quarter. Splender is trying to set itself apart by paying customers faster – shoppers can receive their cash back every month, assuming at least $10 is sitting in the consumer’s account – and by building a “clean experience” online, Warren said. However, Boston-based BeFrugal, another cashback website, said in October it changed its policy to pay out every 10 days, if the $25 minimum is met.
Retailers pay Splender a commission for each sale that started on the cashback website. Warren said the commission varies by industry – apparel has a higher commission rate than travel – and often mirrors the percentage of cash a consumer receives.
English is looking to Cartera, which has raised $36.8 million from investors, and Wayfair Inc., which said Wednesday its overall gross sales from Thanksgiving through Cyber Monday were up 109 percent from the same period last year, to help spur the e-commerce conversation surrounding Boston-based companies.
“What’s the catch? There really isn’t a catch,” Warren said about cashback. “It’s about driving loyalty for retailers.”