Benebit, a startup with a platform that would convert loyalty and rewards points across multiple retailers and other kinds of businesses into a unified system of fiat currency, is planning to commence its initial coin offering on Jan. 22, according to a company press release.
With Benebit’s blockchain-based platform, loyalty points from different sources would be converted into Benebit Tokens that could then be exchanged for cryptocurrency or fiat currency that could used for online purchases, the company said.
By the end of next year, the company plans to introduce a Benebit App and a physical Benecard for points storage, shopping and redemption. For retailers, Benebit will have a point-of-sale system that collects customer shopping data and enables management of inventory tracking, staff payroll and vendor listing.
Over the last few months, there has been a surge in the value of bitcoin and other cryptocurrencies. The role such currencies will play in retail purchases on a broad, daily basis remains an open question. However, Benebit is trying to pave a path for broader cyptocurrency usage in retail, while unifying the still fragmented system of loyalty programs.
Benebit in its press release quoted survey findings from Loyalty360 showing that 83% of consumers participate in at least one loyalty program, with 13% participating in at least five different programs. Increasingly, shoppers are asked almost everywhere they go if they want to join a loyalty program, and with the potential for immediate discounts, near-term offers and long-term points redemption, it seems foolish not to do it. But, a profusion of programs can lead to a lot of confusion for consumers — including a lack of clarity about how many points are accumulated and what they can be redeemed for.
Benebit pointed out other shortcomings: Earning enough points for redemption can take a very long time with some programs, they usually can only be redeemed with the issuing retailer and sometimes points must be forfeited after a certain amount of time.
Replacing all those programs and cards with one program, one app and one card that can be used at any retailer seems like a no-brainer. Taking on such a role is ambitious, and Benebit is still very much in the early stages although its idea has promise. For retailers, Benebit touts lower transaction fees because its proprietary network would be used for transactions without other intermediaries involved. The Benebit app also aims to allow brands to interact and directly engage with customers.
The idea is intriguing enough, but consumers and retailers still need to buy in. While many people who sat on the bitcoin sidelines for too long may now have a desire to get in on the ground floor with something similar, it could take a while for them to embrace a new kind of rewards program. Retailers, for their part, will likely want to see some use cases involving some of their own ilk work before they embrace it.