Online Shopping Rewards
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Online shopping rewards are a type of
loyalty program A loyalty program or rewards program is a marketing strategy designed to encourage customers to continue to shop at or use the services of one or more businesses associated with the program. Single-company vs. coalition programs Loyalty progr ...
to
e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
shoppers. The advent of online shopping has resulted in the rapid development of many rewards programs that offer incentives for shopping. These programs may be points-based (redeemable for products or vouchers), cashback, airline frequent flyer-miles-based, hotel points, donations to charity, or even
carbon offsets Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting p ...
. These programs are often presented to the consumer as coalitions of large numbers of retailers, but are probably better described as competitive loyalty programs, to differentiate them from their precursors the original single retailer non-competitive
loyalty program A loyalty program or rewards program is a marketing strategy designed to encourage customers to continue to shop at or use the services of one or more businesses associated with the program. Single-company vs. coalition programs Loyalty progr ...
.


The marketing model

Rewards portals have grown very rapidly in most major markets, especially in the US, Canada, UK, and Australia. While they have roots in traditional off-line non-competitive
loyalty program A loyalty program or rewards program is a marketing strategy designed to encourage customers to continue to shop at or use the services of one or more businesses associated with the program. Single-company vs. coalition programs Loyalty progr ...
s, such portals often add considerably greater value to the customer than their traditional off-line equivalent, which accounts for their dramatic growth and high levels of customer acceptance. Cash back and reward-based websites operate using a marketing model known as
affiliate marketing Affiliate marketing is a marketing arrangement in which Affiliate (commerce), affiliates receive a wiktionary:commission, commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to Outsourcing, ...
, which is a performance-based marketing tool.
Affiliate marketing Affiliate marketing is a marketing arrangement in which Affiliate (commerce), affiliates receive a wiktionary:commission, commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to Outsourcing, ...
networks make it possible to track in detail where users come from (which website is referring the customers), what users buy (down to the product) and when. Rewards-based websites track and reconcile this information with their own user database, and pass on a proportion or even all of the commission received to the customer. From the customer's perspective they are getting something back, usually at no extra cost and often with an additional discount or bonus. From the retailer's perspective, the role and costs of marketing are passed on almost entirely to the affiliate. While hundreds of thousands of websites can easily use affiliate programs to advertise products and retailers (from sports blogs, fanzines through to almost any niche website), cash back and rewards-based programs are much fewer in number, because of the need to track, store, and retrieve individual customer information with a high degree of precision.


Typology

A particular typology is the
incentive program An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees ...
. Online shopping programs tend to be consumer-oriented points-based or cash back programs. Traditional programs focus their proposition on extrinsic motivation and rewards: cash back or a choice of attractive rewards. A variant, though not unique to online shopping programs, is the intrinsic reward. Cause related websites, much like affinity credit card schemes, give their users the opportunity to donate the cash or points to a charity, school, or club. Others still give their users a range of options. With consumer concern about climate change growing, a number of green rewards shopping portals have appeared. Instead of cash back or
points A point is a small dot or the sharp tip of something. Point or points may refer to: Mathematics * Point (geometry), an entity that has a location in space or on a plane, but has no extent; more generally, an element of some abstract topologica ...
these websites offer
carbon credit Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting p ...
s (also known as
carbon offset Carbon offsetting is a carbon trading mechanism that enables entities to compensate for offset greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon offsetting ...
s) or green gadgets to encourage consumers to shop with particular retailers or make changes to their lifestyle.


Criticisms

Points-based web sites may have different currencies, which makes it difficult to compare the customer benefit. Most reward websites retain a proportion of the commission, and only industry insiders are aware of the nuances of the business model used and therefore the customer benefit. From the consumer's perspective it may not always be clear whether the benefit going to the supported cause is the most effective way of raising funds. For example, in some countries like the UK, a significant tax benefit can be provided to the charity by donating in cash. While the majority of green reward websites also offer some useful information and advice on greener living, few of them seem to encourage more
sustainable consumption Sustainable consumption (sometimes abbreviated to "SC") is the use of products and services in ways that minimizes human impact on the environment, impacts on the environment. Sustainable consumption can be undertaken in such a way that needs are ...
.


See also

*
Affiliate marketing Affiliate marketing is a marketing arrangement in which Affiliate (commerce), affiliates receive a wiktionary:commission, commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to Outsourcing, ...
*
Cashback website A cashback website is a type of reward website (often also available on a mobile app) that pays its members a percentage of the money that they spend when they purchase goods and services via its affiliate links. Leading cashback and similar pro ...
*
Loyalty program A loyalty program or rewards program is a marketing strategy designed to encourage customers to continue to shop at or use the services of one or more businesses associated with the program. Single-company vs. coalition programs Loyalty progr ...
*
Sales promotion Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing ...
*
Frequent flyer program A frequent-flyer programme (FFP) is a loyalty program offered by an airline. Many airlines have frequent-flyer programmes designed to encourage airline customers enrolled in the programme to accumulate points (also called miles, kilometres, ...


References

{{Reflist Online advertising Reward, cashback and comparison-shopping digital platforms