Loyalty programs offering cash back or other rewards make a lot of sense for merchants – until it is 7:30 pm on Friday, and the loyalty program is still giving 20 percent back even though it is prime time for the restaurant. Mogl, the San Diego-based loyalty firm now working with over 1,000 restaurants in Southern California, San Francisco and Phoenix, thinks it has solved the problem.

Since June, the company — which has raised $25 million and set to initiate a new round — has been rolling out a new version that lets restaurants choose the amount of cash-back based on time of day. A 20 percent promotion at lunch can shrink to 1 percent for dinner, and go back to 10 percent for brunch – based on when the restaurant has seats to fill. Mogl calls this putting “butts in seats”.

How does it work? Restaurants log on to their dashboard on the Mogl website to program their cash-back offer by day and time. Mogl has established direct relationships with Visa, MasterCard and American Express providing users with a seamless, coupon-less, loyalty card-less way to redeem the real-time rewards if they just pay with any debit or credit card.

While several other loyalty providers also allow for time of day promotions — some even extending beyond restaurants to include hotels and other categories — CEO Jon Carder claims that MOGL is actually the first loyalty provider to get a live feed of card transactions. He asserts that other loyalty companies gain access to feeds from banks and payment processors that aren’t in real time. Moreover, these feeds only provide day of transaction data – which isn’t useful for executing time-based promotions, he argues.

Others, like FiveStars, get much closer to real time data – if consumers are willing to provide phone numbers or swipe dedicated loyalty cards though a restaurant’s POS. Carder feels this is a disadvantage. Mogl’s seamlessness is a major step up, he says, comparing it to what Uber did for the taxi industry (to us, this is an arguable point).

Regardless, MOGL’s new flexibility with promotions has also enabled it to pivot its business model. The company used to charge a flat 5 percent fee to restaurants across the board. But now – with rewards becoming variable – it has switched to a flat monthly fee of $199. The fee is refundable if restaurants don’t clear $199 in revenue a month from Mogl users These fees are on top of reward/jackpot fees, which the restaurant can now set for itself. The top three customers in a month at each restaurant win a jackpot bonus. The company allows customers to donate their cash-back to local food banks. More than 800,000 meals have been given away.

Mogl’s new model is also winning it some new customers – including some of the hottest restaurants that had shied away from flat, cash-back reward programs in the past because they weren’t able to change the amount based on time of day, says Carder. Even these establishments find themselves needing to fill their seats on weekday lunches.

We’ll have an extensive rundown of loyalty strategies and issues for SMBs at our Leading in Local: SMB Digital Marketing event Sept. 22-24 in New Orleans. Groupon’s Dan Roarty is keynoting, and our session includes executives from First Data, Mercury Payments and SignPost.. Register here.

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Here in San Francisco at BIA/Kelsey’s Mobile Local Media conference, a panel of three young companies offered a glimpse into the leading edge of mobile shopping and loyalty marketing.

Moderator Peter Krasilovsky walked each panelist through an examination of his business model, framing a conversation about the evolution of the hyper-competitive mobile payments and transaction marketing space.

Some common features include using loyalty points to drive behavior — store visits, meal purchases and so on — and a seamless experience, where no phone or coupon or loyalty card needs to be presented at the point of sale by consumers. For merchants, the incentives range from higher customer intake, more frequent in-store visits to higher average purchase value.

Josh Capilouto, director of sales operations at SCVNGR/LevelUp

LevelUp is an alternative payment system. The model is users download the app, link a credit card and pay at the point of sale using that card. The LevelUp business model is pay for performance via onboarding and loyalty campaigns. For example, a new customer might be offered two free dollars as an inducement to come into the store. If that money is spent, LevelUp gets a piece of that offer redemption. The same works with loyalty offers. If an offer is to spend $50 for a $5 credit, LevelUp gets a taste of that $5.

LevelUp is in 25 cities via the remove sales channel and is live with direct sales in eight cities, with three more expected by the end of summer or early fall.

Doug Galen, Chief Revenue Officer, Shopkick

Shopkick is a loyalty platform that works with partners to offer points of “kicks” to reward in-store visits. CRO Galen offered his view on the key trends driving mobile shopping.

He cited two key trends:

1. “There will be more change in retail in the next five years than there were in the last 100.”

2. “The mobile impact on shopping is happening faster than expected.”

Two minor supporting trends:

1. Retail is losing walk-ins and needs a solution to drive in-store traffic. Retailers want walk-ins and will pay for them. They have 25 percent to 50 percent conversion rates.

2. Consumers have too many loyalty cards — fragmentation hurts everyone.

Galen was asked about the restaurant chain Denny’s, which built own app. Why should a company work with Shopkick rather than build its own app? What did they miss out on? Galen said they missed 85 percent to 90 percent of their customer base. Most consumers will not use 40 different apps, Galen said. At best, 10 percent of a company’s most loyal users will.

Jon Carder, CEO, Mogl
The name dropper of the day was Mogl CEO Carder, who talked about a recent invitation to Richard Branson’s private island for dinner.

The Mogl model is to use game mechanics to build a network of restaurants, sign up consumer who synch a credit card, earning the chance to win cash back (10 percent for each visit), accumulate points that are redeemed as meals for charity or win a large jackpot.

Carder said the beauty is that different users are there for different reasons. Some people like to give to charity, others like cash, others like points.

One notable feature of Mogl is the cost to restaurants. The company charges restaurants 15 percent of sale. Carder said this isn’t a challenge. “As long as restaurants see ROI, they don’t care.”

he said the average restaurant pays $400 a month and experiences little attrition. “They will pay for value,” he said. “They are tired of cheap but valueless services.”

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Not to be cynical about it, but charity has always been great for business. “Charitable marketing,” or “altruistic marketing,” has been embraced by many of the leading brands, from McDonald’s and Ben & Jerry’s to the National Football League.

It works even better at the local community level. More and more of our local marketplace companies are jumping on the bandwagon by donating a portion of their proceeds to charity — usually around 10 percent, or equivalent.

BiddingforGood, an effort developed by Family Education Network founder Jon Carson, has worked with 6,400 companies to run auctions for charities. Oodle, under the leadership of Craig Donato, got a jump on the bandwagon a couple of years ago by letting used good sellers assign their proceeds to their choice among a list of 1,000 charities.

More recently, we’ve seen Local Corp.’s SpreeBird assign 10 percent of its net proceeds to local schools or charities: an effort that has already sent out more than $700,000. Similarly, Mogl.com, a diner loyalty program, assigns 0.5 percent of every restaurant tab to its “donate a meal” program, as well as the donation of free meals to incent new signups. The effort has already amounted to 50,000 meals from the start-up. Go Jon Carder!

NextJump’s OO.com is also pushing hard on the cause marketing front. It assigns a loyalty WOW point for every dollar assigned — a loyalty factor that encourages customers to buy in network. Today, in conjunction with Father’s Day, it is partnering with Best Buy on a $10 for $20 deal, with proceeds designed to push 00.com’s donation to Donors Choose, a poor schools program, over the $1 million. The effort has affected 127,000 students in 472 schools in less than six months.

NextJump CEO Charlie Kim tells us that the charity effort and other company efforts all add up to the same thing. “Basically, it is incentive currency,” he says. “It incents behavior. They are going to buy things anyway.”

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