‘Earn rewards by shopping’ is a business model almost as old as shopping itself, but Karrot is an app that uses some smart technology to offer a fresh take on the idea.
Here’s the premise: after downloading Karrot (not to be confused with the personal loans company or the other rewards program of the same name) on iOS or Android app, you link your UK credit or debit card to your account. Then every time you spend money with certain retailers using that card, you earn points that you can then redeem within the app against rewards from your mobile phone company for things like data bundles and call credit, depending on your network.
It sounds simple enough, but the technology behind it is the interesting part. Karrot founder Adam Ward has engineered the system so that there are no QR codes to scan or anything inconvenient like that. It’s much cleaner and smarter.
The system automatically picks up transactions on your card from partner retailers, through their sales records, and tallies up the points for you. When you want to redeem your points, you simply choose your reward in the app. Karrot then taps into your mobile phone company account through its partnerships with all the major UK networks and applies the reward for you.
Signing up is easy. I scanned my debit card and then confirmed my phone number and network and I was done. All you have to do then is tap a check mark next to the retailers you want to earn points from. It only shows nearby retailers, which means you’ll have to check the app while you’re out and about to find any you might have previously missed. A complete, one-stop list might have been a better approach.
In all, Karrot an elegant solution to mobile rewards. Programs like this all too often require ongoing effort from users, making them hard to stay sticky. Ward says that both retailers and mobile phone companies like the idea as it doesn’t compete directly with their own existing reward schemes and encourages spending at both ends of the chain.
One thing Ward needs to work on is increasing the list of participating retailers. So far, only Caffe Nero, American Golf, H.Samuel, Blue Inc, Officers Club and Ernest Jones are on board, with Jamie’s Italian, River Island, Train Line, Ask Italian and French Connection coming soon. That’s not exactly a comprehensive list of UK high street names, but no doubt the list will grow in line with the app’s public profile.
Meanwhile, Karrot is currently in the process of raising £500,000 ($760,000) in an equity-based crowdfunding round on Crowdcube.