Skeptical Shopper: The Risks and Rewards of Deal-Hunter Apps

Still haven't embraced the Foursquare fad or Loopt's "check-in" feature? Me neither. I don't understand the point of letting everybody on my Twitter feed know where I'm ordering a meal or what stores I'm hitting up on my lunch hour. Though the trend may seem silly and pointless right now, national re­­tailers see this check-in model as a way to track--and increase--store foot traffic. But will consumers play along?

For anyone unfamiliar with the hype, Foursquare and Yelp use GPS to find stores, restaurants, and landmarks close to where you happen to be at any given time. You can then "check in" to that place and share your location with your Facebook friends or Twitter followers.

At first, check-ins were worth bragging rights, and that's about it. Now, Foursquare is working with local businesses to reward loyal customers. For example, if you check in to a bar in Kalamazoo five times, you're rewarded with one free draft beer. Sweet!

Two apps, Shopkick and LooptStar, are taking this model to a corporate level and offering even bigger and better deals.

Unlike Foursquare and other location-based apps, Shopkick doesn't use GPS or Wi-Fi triangulation to get your location. When the app is open, it automatically recognizes your presence in a store once you enter. Shopkick has installed "Shopkick Signal" sensor technology into Best Buy and other partner stores, enabling the app to do some neat things. The app could direct you to a section of the store, such as Home Entertainment, where the app announces that you've earned a discount for a specific product in that area--say, 20 percent off on a Blu-ray player.

You can also earn points, called "kickbucks," that you can redeem for Facebook credits, Napster downloads, and immediate in-store cash-back rewards at partner stores. Shopkick is a free app and is currently available only for the iPhone (the developers say that they are working with other mobile platforms as well).

LooptStar is similar to Foursquare in many ways: You earn "achievements" rather than badges and become the "Boss" rather than the mayor of an establishment. Like Shopkick and Foursquare, LooptStar rewards loyal customers after they've checked in to a business a certain number of times. LooptStar doesn't install sensors, but the company tells me that the location technology behind the app is precise enough to know when you've entered a store.

Like Shopkick, LooptStar has teamed up with other companies, such as the Gap, to provide exclusive discounts to customers. LooptStar is available only for the iPhone at this time, but the company plans to expand to the Android platform.

Privacy Concerns

The main drawback of these apps is the threat to privacy: They essentially broadcast your location and shopping habits to others on the app network or to your Facebook or Twitter feed. You can turn off the sharing feature in your account settings, but you can't score deals without sharing your location within the app. Before you shop, look at your account settings to know who can see your check-ins. These apps can let you score some exclusive deals, but be aware of how much personal information you might be sharing.

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