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MyPoints Sold

April 17th, 2006 at 01:26 pm

Last week, United Online (owner of Classmates.com, Juno, and NetZero, among others) bought MyPoints from United Airlines for $56 million.

How is this going to affect MyPoints members? Well, MyPoints has 1.4 million active members (around 4.5 million total), versus around 50 million for United Online (which isn't related to United Airlines, by the way). I imagine they'll try to roll some of their members into MyPoints. But then what?

So far they're not laying off MyPoints' staff, so it's not like they're walking into an empty office building with no knowledge of the rewards program business. They have money; there's no reason they'd shut the program down. But it's still a big question mark how things might change somewhere down the road.

Of course nothing's certain in life or in rewards programs...but points programs are more uncertain than straight cash rebate programs. Why? Because at a touch of a button, the points you earned can be devalued retroactively.

Example: Say you made a purchase at Overstock.com for $100 and earned 10 points per dollar for it, for a total of 1000 points.

Right now, at the current number of points to redeem, that's worth about $8.33. But if, say, they doubled the number of points required to redeem, all of a sudden, you just earned $4.17 worth of points. They halved your rebate...retroactively.

I'm a fan of MyPoints, don't get me wrong. I've been a member since 1999. But MyPoints has clearly been on a downhill slide.

MyPoints was bought by United Airlines in 2001 for $112.5 million, when it had 16 million members. United Online picked it up for $56 million with just 1.4 million active members (4.5 million total members).

Online shopping has exploded since 2001 -- yet MyPoints' membership base went from 16 million to 4.5 million (with under a third of those actually active members). Where did those 12 million+ members go? Why didn't MyPoints' membership GROW instead of shrinking, with so many more people shopping online?

I don't have the answer, just posing the question. There could be a lot of reasons -- competitors like uPromise, which does a much better job of marketing its program... Could be that early entrants into the rewards program scene, also fairly early internet subscribers, were younger, better educated, tech-savvy, and more adventurous online -- understanding the advantages to using a rewards program as a middleman between themselves and the merchant in order to get a rebate. Maybe MyPoints' members just had it with having the number of points required to cash out get increased once or twice a year.

Whatever the cause of its problems, I do know that MyPoints needs a serious investment in marketing if they plan to succeed. People need to know MyPoints is out there, what the benefits are to joining, and how to use the program properly. (Shut down the popup blockers before you shop, don't use coupon codes you got elsewhere, etc.) And customer service has GOT to be improved -- people submitting support tickets in FEBRUARY were getting a canned response about how things were busy from the holidays and response time would be delayed. That's just unacceptable, from a customer service standpoint.

It'll be interesting to watch how this all plays out, but for now, I don't have enough confidence in the program to do any business with them except clicking those BonusMails and doing their occasional surveys.

6 Responses to “MyPoints Sold”

  1. contrary1 Says:

    I knew I cashed in my points for gc's at the right time. Much rather have the actual cards in hand, than the points on someone's website. I'll just watch cautiously now...........

  2. rix Says:

    I have to disagree with your assesment. MyPoints hit the skids when United Airlines bought them, but with a tech company like United Online and their 50Million members as well as success in the tech world, I would imagine they would only make the program better for users. Why offer a bad program to new members? I would imgine thier goal is to build a points based shoping system as content for the netzero/juno world. If anything our points may become more valuable and have more redemption options. It is just my opinion, but I think MyPoints members future opportunities got brighter last week.

  3. Shopping-Bargains.com Says:

    I think the popularity of coupon codes hurts MyPoints. Why shop with them for a few points that can be devalued later when you can get an instant discount or free shipping now? It's hard to go for points when you can save 10% or more with coupons.

  4. StressLess Says:

    Also, they've gotten a bad reputation for being a source of "parasite ware" and stealing other sites' commissions. For example, if you aren't getting the cash back you're expecting at FatWallet, one of the causes they suggest is that you've been using MyPoints recently, and they got the commission instead. I've been on more than one website's discussion board where mention of MyPoints was prohibited because of this. I don't have time right now to link to some articles I found, but if you google the topic, you'll find some info.

  5. Champion Cheapskate Says:

    Collect bonus points or get substantial discounts and freebies which others provide? Also the dot-bomb crash caused many of their top programs to fold. Easy points disappeared. Oh, try to redeem your points now.

  6. CompareRewards Says:

    I think there's a misconception that you can't combine rebates and coupon codes. You can...sometimes. The thing is, some coupon codes are affiliate-specific. If you use an affiliate-specific coupon code, you will get the discount applied, but the commission will redirect to the affiliate...so if you use a coupon you got from Joe's Coupon Site (if such a thing exists, hehe) while shopping through MyPoints, you get the discount in your cart immediately, but the balance of your commission goes to Joe, so MyPoints can't pay you a rebate on top of it. BUT -- if the rewards program gives you THEIR affiliate-specific coupon code, you can double-dip! Ebates does this -- for instance, they say they pay 9% on all Hallmark Flowers purchases, but next to that, they suggest using code EBATES20 for an additional 20% off.

    I use some of the smaller rewards programs, like QuickRewards.net and CreationsRewards.net, for shopping quite often. If I find a coupon code on a deal site, I'll email the site owners and ask if they have access to a similar coupon...and 9 out of 10 times they will! Another thing these two smaller programs do that the big guys won't is, if you find a higher rebate anywhere else, email them and a lot of times they will match or beat that rebate!

    Some coupons are NOT affiliate-specific, and you can use them at any program. But the only way to find out for sure is to ask.

    If you don't have time to ask, then decide which is better -- if the code is higher, TRY using the code at a rewards program. Worst case is that you just get the discount, not the rebate. If the rebate is higher, don't take a chance on using the coupon if it might nullify the (higher) rebate.

    Then you can actually TRIPLE dip...by using your rewards credit or debit card to pay for the purchase. Smile

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