Stop By a Store, Grab Rewards With Your Phone

Your smartphone is teaming up with stores that want to give you a little something just for stopping by, and with manufacturers who want to give you an incentive to examine their merchandise.

When Isra Hashmi goes shopping, she keeps her phone at the ready so she can use a mobile check-in app called Shopkick that automatically rewards her for simply walking into a store. She earns points that can be redeemed for gift cards, merchandise and other goodies, plus she might receive exclusive coupons.

"You don't have to make a purchase to earn points, but if you do make a purchase, you often get in-store deals that can be a nice savings," says Hashmi, the Boston-based author of The Frugalette lifestyle blog.

'Tis the Season for Check-In Apps?

During last year's holiday shopping season, a majority of adult cellphone users walked into stores, reached into their pockets and pulled out their phones. At that time, the most popular reason, according to a Pew Internet survey, was to call a friend for advice before making a purchase. Others used their phones to look up online reviews or do price comparisons.

But this year, many of those same cellphone-wielding shoppers will likely turn to Shopkick and other rewards check-in apps, says Marilyn Prosch, an associate professor of information systems at the University of Arizona's W.P. Carey School of Business.

"In a sense, (check-in apps) are the ultimate personalization of targeted advertising, delivering the savings while you are literally in the store or close by," says Prosch, who sees mobile check-in apps as the next generation of coupon circulars and in-store promotions.

So far, the apps have proved quite popular with shoppers. In just two years, Palo Alto, Calif.-based Shopkick has grown to more than 4 million registered users. There are a number of competitors, include CheckPoints, EasyShift and WeReward. All can be downloaded for free.

How Do the Apps Work?

Each check-in app works a little differently, but there are some basics that are universal.

Shoppers need to turn on the app when they enter the store.
Rewards are based on specific activities that can range from simply walking into the store to picking up and scanning a particular item's UPC barcode with your phone's camera.
The apps' rewards points may be redeemed for gift cards, frequent-flier miles, online cash, electronic gadgets or even charitable donations made in your name.
While you don't need to make a purchase to get value from these apps, shoppers who buy something often receive in-store promotions in the form of electronic coupons.

The Deals With Check-in Apps

Can You Really Save Money?

As with other incentives and coupons, how much benefit you get from a check-in app depends a lot on your overall shopper behavior. If an app causes you to shop more, you might find yourself saving on particular items and accumulating points -- but ultimately spending more money.

"We like to think of the app as enhancing the shopping experience," asserts Doug Galen, chief revenue officer of Shopkick. "Mobile phones give us the ability to offer real-time offers to our shoppers that reward them for shopping in a specific store or considering a particular product."

Hashmi estimates that Shopkick has helped her save about $50 a month during shopping-intensive seasons such as back-to-school and the holidays, when she mostly takes advantage of the app's in-store coupons. She also earns plenty of "kicks," Shopkick's name for the points it doles out just for browsing.

"I don't think I buy more, but when I'm trying to earn more points, I do spend more time shopping," she says.

Of course, time spent in a store or holding a product in your hand has a value for brand marketers and retailers, which is the point of all of these smartphone apps.

"Getting someone into a store is obviously the main goal," says Dave Heinzinger, spokesman for inMarket, the company behind the CheckPoints app. "If we can get a shopper to physically pick up the product to scan it, we know that purchasing intent goes way up."

What About Privacy?

While check-in shopping apps can offer rewards and savings, consumers should understand that they're also giving up some personal information in the process, says Prosch.

At a minimum, all of these apps use your phone's geotargeting functionality to determine your location, because they need to know that you're actually in the store for the app to work.

Prosch says consumers should read the terms of service carefully before installing any smartphone app and be wary if, for example, data on your purchases will be stored or details about your activities will be shared on social networks -- things the major check-in apps say they do not do.