Luis Derechin, co-founder of PointWorthy, told Loyalty360 that he believes the new socially-conscious payment platform that launched Feb. 18 will allow members of loyalty programs to donate the cash equivalent of their loyalty points to any charitable cause.
“Our philosophy is to try and expand on the way people can give,” Derechin said.
Members can now redeem their available loyalty points for a cash donation to a wide variety of charitable organizations, supporting causes ranging from education and medical research to the arts through PointWorthy.com.
Derechin explained that PointWorthy was created because its founders had accumulated many loyalty points, but were not able to use them to fund the causes they cared about.
“Loyalty reward providers are doling out close to $50 billion in reward points per year,” Derechin said. “About one third of that goes unredeemed. The reality is loyalty reward providers need to account for those points. If they don’t get used, you keep piling up liabilities that create financial health issues over time. You can extinguish those liabilities in a corporate responsible manner.”
The launch of this service highlights changing views about what “loyalty” means in business and how to foster deeper relationships with consumers that are based on rich emotional ties and experiences rather than just consumption.
“Up until now, corporations have chosen one or two charitable partners and promote these to people so they donate to these companies,” Derechin explained. “The difference from that to ours is the ability for the consumer to choose their hyper local charity and to be involved in the process of what matters to them that isn’t based on what matters to corporations. We make it possible and the consumer can choose whatever they want as far as a charity.”
Derechin calls it a “win-win-win” scenario.
“It benefits the consumer making the donation, the charity receiving the donation, and the corporate partner or loyalty reward provider making it possible to make a donation with points,” Derechin said. “We’re giving the consumer a choice and option of when and if they want to do it.”
Derechin said marketing studies and focus groups indicate a large percentage of the population looks favorably on brands that support causes individuals support.
“It creates the halo for brands to allow loyalty providers to enable this,” Derechin said. “When you’re going to dig into your wallet, you want to choose which organizations align with your beliefs. If you look at social media trends, people are sharing a lot of things. This is a way people can help community causes by creating the right environment and making it viral, so to speak.”
Derechin believes there is a buzz.
“If we can help the causes get the message out so other people who want to get involved can give and join the movements and have the loyalty providers benefit from the halo effect,” he explained. “We want to make sure these relationships happen and the cause brands get the buzz and consumers spread the buzz so other people get involved.”
Today’s consumer doesn’t like to be shackled to a single site or place isn’t one that lies to be shackled to a single site or a single place to give, Derechin said.
“We need to help the causes and the consumers by being everywhere they are,” he said. “Social corporate responsibility is a big deal and hyper personal is incredibly important.”