Taming the loyalty card beast

According to the loyalty research firm Colloquy, there were 1.3 billion loyalty cards in circulation in the United States in 2008. That's a lot of little pieces of plastic hanging from a lot of key chains. But the majority of them — just over 60 percent — never get used.

In recent months, a handful of tools have popped up that compile those cards into a more convenient format, and make it more likely that people will actually use them. Those tools run the gamut from DIY websites that print four-up barcodes on a home printer, to iPhone apps that render barcodes on-screen.

The low-tech approach: Paper-based loyalty card aggregators

KeyRingThing allows users to enter up to six loyalty card ID numbers into a website, which generates a three-per-side card that fits in a standard credit card wallet slot. Users can print the cards at home, or can order a laminated, color card for a price.

Founder Jon Jackoboice said his web site got hammered the morning of the GMA appearance, with more than a million visitors flooding in. An appearance a few days later on the popular personal productivity site Lifehacker yielded another 800,000 visitors. So far, the company has generated more than 150,000 cards, about half of which the company manufactured and mailed.

Although a few retailers grumbled about the loss of a bespoke card and the branding that it carries, Jackoboice said those concerns are quickly overcome by an uptick in program usage — an average uptick of about 50 percent, he said.

"Six out of every ten cards issued aren't being used," he said. "The argument can be made that as prominent as that logo is on that card, if it's sitting in the back of a drawer, it's not being seen at all. The primary point of the loyalty program is to get the cards used. It's not so much for the advertising on the keychain."

KeyRingThing's chief competitor in the printed loyalty card space has been, up until this point, hobbyist/programmer Gregory Pinero, whose web site JustOneClubCard.com allows users to easily make a credit card sized piece with four barcodes per side, printable on any inkjet or laser printer. Founder Gregory Pinero estimated that about 100,000 cards have been generated since the site launched two years ago.

Just last week, the two entities struck a deal in which JustOneClubCard users are redirected to KeyRingThing if they want to acquire a physical product.

The flexible nature of the program means that the cards can be used for more than just loyalty programs. Jackoboice said KeyRingThing cards have been used for everything from library cards to health club memberships. He has users that have built different cards for use in different cities; one user put six YMCA member codes on a single card, one per family member. The company is currently working on a way to let users upload custom artwork and photography to be added to their cards.

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The high-tech approach: Porting loyalty cards to the smart phone

CardStar offers a free iPhone/iPod Touch app that allows users to aggregate multiple barcodes into one digital location; at the point of sale, the user pulls up the retailer and the barcode is rendered on the spot.

CardStar, a five-person company that launched in late 2008, offers an eponymous app for the iPhone and iPod Touch models that aggregates barcode data and renders them in real time. Company president Andy Miller said the free app has been downloaded more than 150,000 times since the launch of the latest version in May.

This week, the company will release its first version of the app for the Android mobile phone operating system. A BlackBerry version is currently in development.

"When you take these things off the keychain and put them in CardStar, we become a sticky app," he said. "We don't see people 'kinda' use the app. We have lots of power users, and that's it."

CardStar's main competitor is Scanaroo, a .99-cent app that uses the iPhone's camera to take an actual picture of barcodes, rather than attempt to render them based on numerical data. The app received a positive review last week from gadget blog Tech Startups, which said "apps like this make me really wish people were developing similar options for other mobile devices."

While Scanaroo monetizes the app itself, CardStar has its eyes on becoming a delivery platform for retailers and brands. Miller said he is working on partnering with merchants to share some of the massive amounts of data it collects.

"CVS knows who you are if you have a CVS card," he said. "So, part of the model there is selling CVS data. We can, in aggregate, share with them how many people have Rite Aid cards, and how they're used relative to the CVS card."

He also has visions of using the CardStar network as a messaging vehicle — for instance, if a big pharmaceutical company has a new product launch on the horizon, it can work with CardStar and a chosen retailer to offer exclusive promotions to that store's card holders.

Both CardStar and Scanaroo have one major Achilles' heel, and that is their difficulty in working with flatbed scanners. Reliability varies from model to model, but flatbed scanners have a hard time reading an on-screen barcode — an even harder time if that screen has any smudges or fingerprints on it. That problem is alleviated, Miller said, by simply asking the checkout person to use the handheld scanner, which has no problem identifying the codes.

And as with any new technology there is the human element, and many checkout personnel will not be prepared to understand what is happening when a customer hands them an iPhone with a barcode on the screen.

"Most checkout staff are wowed by it," said loyal CardStar user Stacy Robin, who said she gets either "oohs and aahs — or complete and utter confusion" from cashiers.

"One woman at CVS was so bent out of shape, she spoke to the manager — but (she thought that) I was trying to use it for my credit card. It was a mess until the manager came over to see what was going on."