Groupon ‘Pauses’ its Rewards Program

The transition from one-off daily deals to an ‘always on’ loyalty/rewards platform that keeps merchants in the fold has been a Holy Grail of sorts for the deals companies. This was the case for Groupon Rewards, which launched in May 2012. Using Groupon Rewards, consumers could link the same credit card they use for Groupon to make purchases with merchants and spend enough at the merchant to unlock attractive discounts.

But in a letter to customers and merchants, Groupon has now announced that it is temporarily suspending the Rewards program on Sept.1. It told us that the program needs to be reworked to bring in state of the art technology, mostly incorporated into its Breadcrumb point of sales system, which has its own loyalty features and its own payment processing efforts. Any credit earned between now and Sept. 1 won’t be carried over past the cut-off date, but existing customers are being given a $10 certificate to use for a Groupon purchase.

The new version of Rewards is being designed to work across Groupon’s new Breadcrumb-branded products; enable a wide range of credit cards, not just those attached to the Groupon account; and also enable an international footprint. Rewards is currently limited to the U.S. Outside vendors are possibly involved in the upgrade, although they are not being announced.

“By making this change, we have an opportunity to build an even better Rewards program that enables deeper and long-lasting interactions between merchants and their customers, as well as providing a more comprehensive view of customer spending habits and repeat purchase behavior,” said the company.