We’ve written a bit in the past about Pepper Rewards, an instant gift card app that’s been offering 5% back on wide selection of gift cards, as well as 10% back on all gift cards for new users within the first 15 days. In addition, it’s been regularly running bonus sales that offered as much as 15.-20% back on some fairly desirable gift cards.
Pepper has caused quite a stir in the points and miles world, primarily because of its effect on gift card reselling, where it’s almost single-handedly caused a depression in going rates. Most folks believed that the rewards it offered on weren’t sustainable and eventually would dry up once the venture capital ran out.
Looks like we’re there. Starting today, Pepper is “transitioning from a static to a dynamic rewards system,” resulting in 1% back being standard earning instead of 5%.
Disclaimer: Our own Stephen Pepper has no relation to Pepper Rewards…apart from being exceptionally well-named.
Quick Thoughts
Back in May, Pepper changed the value of its “coins” from being worth approximately 25 cents each to 0.0005 cents, or five one-hundredths of a cent each. At the time, we wondered if that was preparation for a reduction in earning rates, allowing it so say things like “earn 20x” and make a mediocre return seem like a great value.
That’s exactly what’s happened.
Yesterday Pepper Rewards members got an e-mail stating:
Starting July 26th, you will earn 20 points per dollar at minimum plus many merchants will offer boosted points of 3x, 5x, 7x, or even 10x. For example, at 5x merchants, you will earn 100 points per dollar. Points values remain unchanged: 10,000 points = $5.
Earning 20x sounds awesome, right? Not when you know how much the points are worth. 20x results in a standard earning rate of 1% back and a 5x promotion (which would earn 100x!) is only worth 5% back…or what the standard rate used to until this morning.
While it’s a bummer to see the hammer drop, it’s not really surprising. There’s absolutely no way that Pepper could continue doling out the cheddar like it has been. Going forward, it very well may be useful for some deals, but it won’t dominate the market like it has for the last few months.
Unlike Stephen, this Pepper ain’t so hot anymore.
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[…] The only surprising thing about this is that it took so long: Pepper Rewards massively lowers earning rates. […]
What if we signed up under the 10% new user promo?
Goodbye investor money.
It’s actually not that bad as of today as most brands have a 3-4x rate. I think they did this to be more flexible when it comes to discounts per each brand (vs. having everything 5% off). We’re still worse off but not “1% discount” worse off.
Yep Amazon and Target are still offering 4X and 3X – not as good as office supply gift cards on an Ink but a better return than any shopping portals offer.
With Amazon reloads now at a $5 minimum Pepper is one of the best ways to do low dollar amount transactions for hitting monthly activity requirements. And it works with more than just Amazon!
I just wonder if this is a sort of soft landing and the top ones (Amazon, Walmart, etc.) will eventually move to 1%. Hopefully not
This change gives them that ability as the floor for the discount is 1% now, not 5%. Time will tell.