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Bing Cashback can cost you money

Imagine you are an owner of a small antique shop on Main street of a tourist town called ‘Bing’. You are doing your business just fine, the sales are not great but enough to make ends meet. Now imagine the township announces new initiative targeted to bring more visitors to the town, they call it ‘Cashback’. Should you accept, you will get your front door remodeled for free and the village will advertise your business. However there is a catch - you are required to pay back each customer who buys something at your store a percentage of the sale. The idea is that as customers see the cash flowing back to their wallets they will tell about ‘Bing Cashback’ to their friends who will want to take a tour of the town as well. ‘Bing’ of course has more than antique shops on Main street, but this is besides the point.

Now imagine that your shop has a backdoor which wasn’t remodeled, and by the way, this was the door that all your regulars have used all the time before you got on ‘Bing Cashback’, and they still do.

Two things can happen in this imaginary world:

  • If you keep your prices low (at the level before you joined ‘Bing Cashback’) you will hurt your bottom line
  • If you raise your prices to compensate for the lost revenue, you will hurt your regulars, who still use the backdoor and don’t get cash back

It sure feels like your business is doomed either way, that is unless you have a magician friend, ‘Marketer’, who comes up with a ‘genius’ solution. He invents special glasses that when used will make the price on all your merchandise look higher, and he then suggests to give out the glasses to everyone who comes in the store through the ‘Bing’ remodeled frontdoor. You take on the advice, your business is booming until one day an ‘unforeseeable disaster’ happens - one of your customers takes off the glasses and sees the lower prices!

This is what in essence happened today with a New Jersey based electronics seller Butterfly Photo when Meghani, a blogger at search engine startup Bountii, exposed their ‘magic glasses’ practices to the world.

Butterfly Photo set a three month cookie on my computer to indicate that I came from Bing. Any product I look at for the next three months may show a different price than Id get by going there directly.

Meghani claims he knows ‘more than a few instances’ of this kind of ‘magic marketing’, but he unfortunately doesn’t name the specific stores.

On one hand, the online world has opened new unimaginable before marketing opportunities as well as new ‘creative’ ways for businesses to scam their customers. On the other hand, thanks to social media, ‘business failures’ like this have become more costly for business owners which to some extend counter balances the situation. Overall I feel excited to live at the time I do and be a part of this ‘online revolution’.

What is your experience with Bing? Have you ever been a target of the dual price ‘magic marketing’? Do you think Bing Cashback will bring Microsoft success in a similar way the banks have benefited by hooking their customers to the cash back rewards credit cards?

Microsoft launches Search Perks

Microsoft moves further down the road of buying its way into the search dominance (check out Live Search Cashback they launched back in May) with October 1 launch of a new loyalty points program - Search Perks.

The idea is very simple: search the web with Live Search and get a point for each search (up to 25 a day) which you can exchange for prizes come April 15, 2009. You currently get 500 points just for signing up - enough for a few music downloads or a deck of play cards.

There are a few more things you need to know:

  • The program is open to US residents only.
  • You will need to install a small internet browser add-on.
  • You can’t use it on any other browser but IE.

Encouraged by the free stuff, I initially considered giving Live Search a try, but the browser restriction killed it for me right there. IE is simply no match to Firefox and shuffling two browsers for different tasks is just too much.

Microsoft integrates Jellyfish into Live Search

Microsoft CashbackWhat does it take to dominate web search? One might think a search engine that produces quality results is all that matters, and this is exactly how Google stole the game from Yahoo, Netscape and others back in 90’s. What can you do though if your product has not been that great but you have a huge amount of cash burning your pockets? I am sure Bill Gates and other folks at Microsoft have been asking themselves this same question.

Buying your way into the dominance

Back in October 2007 Microsoft acquired a startup called JellyFish which sort of pioneered CPA model of doing business in the search world. As a way to get things going they offered a cash back incentive to the customers who bought products via their search engine. The idea is not exactly new and there is a whole class of sites called Rewards Programs that build their business around cash back. What JellyFish has done differently was that they promoted the search aspect of it. Many of the rewards sites back then didn’t have a convenient search function, and some required you to sign up for an account before you could do anything. JellyFish prominently displayed search on the front page and only required you to sign up before you make the purchase.

Yesterday Bill Gates announced at the Advance08 conference about a new project Microsoft is undertaking to get on Google. They call it Live Search cashback and the entire initiative essentially boils down to integrating into Live Search the JellyFish idea of CPA based product search. Consumers can get to the savings from the main Live Search page by clicking on the “Get Cashback” icon in the top right corner, or by going to Cashback.com, a domain Microsoft acquired for those unfamiliar with Live.com brand.

live search cashback screenshot

Good for consumers, bad for affiliates

The way all Rewards Programs work is by paying consumer a part of the affiliate commission they receive from the merchant when the consumer buys something using the program. Microsoft’s move into the niche essentially popularizes the cash back concept and makes it available to broader masses, which no question is good for consumers. Just as cash back credit cards, rewards programs is a great way to save while shopping.

On the other hand, the fact that Microsoft has become a “super affiliate” may not do well with businesses who rely on Live Search to bring in sale leads or do affiliate arbitrage. This is clearly a conflict of interest here and will cost Microsoft some of the adCenter customers.

As for the long term Google vs. Microsoft aspect of this move, it is clear Microsoft is desperate and is trying different things in an attempt to gain the search market niche. I will be curious to see how another acquisition they made recently plays out in that aspect.

Over $500 in credit card sign up bonuses

Credit card sign up bonus offers are the kind of deals I rarely pass on. They are usually easy to get on, and just as easy to get off when you no longer need the card. I have participated in most of the promotions below and still use one of these credit cards because of its good daily cash rewards.

All of the cards below have no annual fee, or have it waived for the first year. Should you apply just because of the sign up bonus? You will have to decide it for yourself. My answer to this question tends to vary depending on the bonus amount and on how badly I am in a need of cash at the time I see the offer.

Credit cards with sign up bonuses

citi professional credit card Citi Professional with Thank You network - (offer page)

10,000 ThankYou points ($100 equivalent) after $250 in purchases. The card also offers decent rewards when you use it at restaurants, gas stations, on auto rentals and certain office supply merchants. (this promotion has expired)

citi business credit card Citi Business with Thank You network (offer page)

10,000 ThankYou points ($100 equivalent) after $250 in purchases. The card also offers decent rewards when you use it at office supply merchants and on professional services (this promotion has expired)

amex rewards gold card American Express Preferred Rewards Gold (offer page)

10,000 membership rewards bonus points after your first purchase (redeemable for a $100 gift card). The membership program tied with this card also offers certain travel and entertainment related perks.

discover business card Discover Business (offer page)

$100 cashback bonus after $1000 in purchases. This card also offers 5% on your first $2000 in office supply purchases and 2% on your first $2000 in gas purchases in a year, plus other benefits

amex business freedom card American Express Platinum Business FreedomPass (offer page)

5000 bonus points with first purchase (redeem for $100 when you accumulate a total 7500 points). This card offers one point for each dollar spent on travel. 7500 points are redeemable for $100 (effective cashback rate 1.33%). (this promotion has expired)

chase freedom card Chase Freedom (offer page)

$50 in bonus rebates after your first purchase. 3% cashback in 3 top categories by spending (capped at $18 per month) and 1% in the rest. Also check out Chase Freedom Plus card, my primary credit card at the moment (this promotion has expired)

amex one card American Express One (offer page)

$50 bonus is deposited into a linked savings account after first purchase. This card also offers 1% cashback on eligible purchases - this is a norm for most cash rewards credit cards. The distinct part is the FDIC-insured savings account that comes with the card. (this promotion has expired)

Shop and get your money back with CrazyRefund

CrazyRefund LogoThe concept of getting cash back on things you buy is nothing new. Many websites offer a percentage of the commission they receive from the merchants as an incentive for you to buy things using their links. I covered these so called “Rewards Programs” before and you can find some tips on how to choose the program that fits you the best here and here.

I have recently received a review request via ReviewMe from a New York based startup which attempts to approach the problem of attracting customers in the over-saturated online shopping industry from a different angle.

Instead of giving a percentage back, CrazyRefund will give back the entire amount you spend on your order if you happen to be the lucky shopper number N, where N is a number that varies from merchant to merchant.

For example anything you buy from Foot Locker using links at CrazyRefund has 1 out of 25 chance of ending up being free. Some merchants have higher chances, some lower, depending on the commission they pay. You can see the complete list at the CrazyRefund front page.

Here is how Mark, the founder, explains the idea behind CrazyRefund:

It’s like gambling on your everyday spending, but it isn’t really gambling – because you are just buying whatever you need with the chance of winning it free. So why not put a little excitement into things

In addition CrazyRefund is running a few cash back programs for signing up to services like IP telephony from SunRocket or SUPERPASS from Real Networks. I have not tried these but I found at least one person who did and he seems to be pretty happy about the deal he got.

According to Mark, the website was launched in December 2006 and hasn’t had time to generate much buzz yet however if you trust the winners page, they have been giving people back their money, and a lot!

This post is sponsored by CrazyRefund via ReviewMe




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