Card-Connected Loyalty Service LocalBonus Expands Reach

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New York-based customer loyalty startup LocalBonus is expanding to four new cities: Seattle, Portland, Sacramento and Denver. The service allows users who register their credit or debit cards to qualify for customer loyalty points when they shop at local businesses. The points can then be redeemed for up to 10 percent cash back on future purchases from the 800+ businesses in the company’s merchant network.

“We offer a great reward that increases frequency and return visits,” LocalBonus CEO Derek Webster told Street Fight. “We build an active base of members in the LocalBonus program looking to explore new businesses where they can earn points in a currency the consumer already collects.”

For members, LocalBonus is free, and Webster says local businesses are part of a “pay-for-performance revenue model.” This means that merchants pay a fee both to cover the reward and for using the service when a member shops there. Webster says the real value of the service for local businesses is the universality of the points currency — because it gives users rewards for shopping at groups of businesses, they can build points more quickly and use them more freely. Shoppers also get double points when five or more members spend money at a particular merchant on a particular day, in a feature called the LocalBonus “wolfpack.”

The company has also announced that it has raised more than $500,000 in a seed funding round from Payment Ventures, Entrepreneurs Roundtable Accelerator, and other angels.

Isa Jones is an intern at Street Fight.

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