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Cash for Clunkers and Other Incentive Programs
By SavingsIQ(view all posts by SavingsIQ)
at 10:55AM Tuesday November 2, 2010
under
Newsworthy
Now that Halloween is over, you probably have a huge stash of leftover candy sitting around the house waiting to make its way onto your hips or thighs forever. Trick or treating has its drawbacks and comes in the form of cavities, weight gain and never ending sugar highs. One orthodontist in the Key Biscayne area of Florida has come up with a genius idea of buying back Halloween candy loot to the tune of $1 per pound, up to five pounds. The candy is then shipped to our troops overseas. Win/win situation for all involved!
Reading this article made me think about how our society is more apt to do things when cash is involved.
Take the Cash For Clunkers program for instance. Started on July 1, 2009 by the government to promote the purchase of new and fuel efficient cars while trading in old non-fuel efficient ones, the program ended on August 24, 2009, well before the November 1 end date, after exhausting the $3 billion plan. The customers were awarded credits in the amount of $3,500 or $4,500 based on fuel economy difference between the new and old cars. 690,114 deal transactions were reported as a result of this successful program.
Think about it. If this program never went into effect, how many old, smoggy clunkers would still be sitting out there on people's driveways?
Credit cards are another way to earn cash incentives. Many cards offer cash back when you use them to make purchases. Chase Freedom MasterCard offers $100 cash back after $799 in purchases plus 1% to 5% cash back on other purchases. Citi and American Express are two other popular cards that offer up to 5% cash back. Credit companies are smart. They know if they entice you with "cash back," you will be more likely to rack up your bill--helping them make money off interest rates. Just make sure you don't spend more than you can pay back. 5% cash back is not worth the 15% to 20% interest rates.
A cash back program that actually comes with no strings attached is Bank of America's Add It Up. Available to existing online banking customers, you can earn up to 20% on purchases made when you shop through to your favorite retailers. For example, if you spend $100 at Gap and the cash back is 4%, you get $4 deposited into your bank account within one month. It's like getting paid to shop and you don't have to do anything extra to earn it!
Discover card has a similar incentive program via their ShopDiscover partnerships. Like the BoA program, card holders can earn 5-20% cash back for shopping at popular retailers such as Sears, Walmart and Home Depot via the ShopDiscover portal.
Not a Bank of America or Discover card customer? Ebates offers the same deal. Shop thousands of retailers online and get a percentage deposited into your Paypal account or have a check mailed to you. They even offer coupon codes so you can save money while making your purchase.
IBM instituted a program where they paid out a $150 rebate to employees if they improved their family's eating and exercise habits. The program benefited the company as well--according to IBM spokesperson Laurie Friedman: "Healthier employees have fewer absences and are more productive. Not to mention the cost benefits -- healthy employees see less out-of-pocket health care expense."
Cash incentives are even being offered to parents for ensuring their kids attend classes. At Jefferson Elementary School in St. Louis, parents get $300 per child if the student finishes the semester with near perfect attendance and no suspensions. Parents must also attend three PTO meetings. Of course there is a debate about this program, but I'm all for it if this means that parents are more involved in their kids' lives.
Even hackers can cash in in these days as Google is offering payment of up to $3,113.70 for those who help to expose bugs or flaws in their web applications like Google, YouTube, Blogger and Orkut.
What are some cash incentive programs that interest you and why?
Reading this article made me think about how our society is more apt to do things when cash is involved.
Take the Cash For Clunkers program for instance. Started on July 1, 2009 by the government to promote the purchase of new and fuel efficient cars while trading in old non-fuel efficient ones, the program ended on August 24, 2009, well before the November 1 end date, after exhausting the $3 billion plan. The customers were awarded credits in the amount of $3,500 or $4,500 based on fuel economy difference between the new and old cars. 690,114 deal transactions were reported as a result of this successful program.
Think about it. If this program never went into effect, how many old, smoggy clunkers would still be sitting out there on people's driveways?
Credit cards are another way to earn cash incentives. Many cards offer cash back when you use them to make purchases. Chase Freedom MasterCard offers $100 cash back after $799 in purchases plus 1% to 5% cash back on other purchases. Citi and American Express are two other popular cards that offer up to 5% cash back. Credit companies are smart. They know if they entice you with "cash back," you will be more likely to rack up your bill--helping them make money off interest rates. Just make sure you don't spend more than you can pay back. 5% cash back is not worth the 15% to 20% interest rates.
A cash back program that actually comes with no strings attached is Bank of America's Add It Up. Available to existing online banking customers, you can earn up to 20% on purchases made when you shop through to your favorite retailers. For example, if you spend $100 at Gap and the cash back is 4%, you get $4 deposited into your bank account within one month. It's like getting paid to shop and you don't have to do anything extra to earn it!
Discover card has a similar incentive program via their ShopDiscover partnerships. Like the BoA program, card holders can earn 5-20% cash back for shopping at popular retailers such as Sears, Walmart and Home Depot via the ShopDiscover portal.
Not a Bank of America or Discover card customer? Ebates offers the same deal. Shop thousands of retailers online and get a percentage deposited into your Paypal account or have a check mailed to you. They even offer coupon codes so you can save money while making your purchase.
IBM instituted a program where they paid out a $150 rebate to employees if they improved their family's eating and exercise habits. The program benefited the company as well--according to IBM spokesperson Laurie Friedman: "Healthier employees have fewer absences and are more productive. Not to mention the cost benefits -- healthy employees see less out-of-pocket health care expense."
Cash incentives are even being offered to parents for ensuring their kids attend classes. At Jefferson Elementary School in St. Louis, parents get $300 per child if the student finishes the semester with near perfect attendance and no suspensions. Parents must also attend three PTO meetings. Of course there is a debate about this program, but I'm all for it if this means that parents are more involved in their kids' lives.
Even hackers can cash in in these days as Google is offering payment of up to $3,113.70 for those who help to expose bugs or flaws in their web applications like Google, YouTube, Blogger and Orkut.
What are some cash incentive programs that interest you and why?
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I'm totally a sucker for incentive programs. I always use ebates or a similar cashback program when i shop online. I figure why not? Sometimes it covers tax and/or shipping. I also try to use my Amex whenever i can because I get membership rewards that I can redeem for gift cards to my favorite stores. It's almost like losing out on money if you don't take advantage of programs like this!
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Interesting - while reading, I was game for cash incentives with credit cards and maybe even for losing weight/getting healthy. Once the example of parents getting money for students attending class came about, my knee-jerk reaction was that: it's the parents' responsibility! From an educator perspective, parental involvement has many benefits, but to couch it with money does not feel right. External motivation goes so far and is limiting for those who are giving incentives, but internal motivation outlasts.
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@oooK9ooo - I agree with you that it's the parents responsibility, but we all know about the deadbeat parents out there. At least this will give them some kind of motivation to be involved in their kids' lives.
@starlit - very cool about Amex awards!
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Not sure if this is the kind of incentive you were looking for but when was at Target buying my food for the week. I noticed several items had a note by it saying if I bought the "store" brand instead, I would get a gift card for it and the more store brand items I bought, the more I got back. Ended up with a $10 gift card that I got at the checkout. I have also seen at Target the same thing but with buying certain items on sale. Like one time I had to buy 4 or 5 12-packs of Pepsi, on a good sale too, and I would get a $5 gift card.
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I'm big on the rewards points offered with the Visa and Amex cards....I prefer to go for the gift certificates as they make cool gifts for people (ie. Visa prepaid cards)....That and the Starwood points incentive makes me look for "W's" and Westins all the time when travelling.
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buying back halloween candies OR am extremely hyper 5 year old?? HMM...no brainer here! ;)
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While the cash for clunkers program benefited the economy in the short run, I fear the residual effect pervert the market for automobiles in the longer term. This is because the program pulled forward the demand for cars; my guess is car sales will be below seasonal averages for a while.
On the other hand, cash reward/points programs for credit cards are fantastic programs - IF, as IQ states, you pay off the balance every month. I've earned many a free flight thanks to placing my tuition bills on my credit cards!
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I liked the topic... But when are we going to stop acting like 5 year olds and do things because we want to or need to, and not because someone is holding a carrot with a stick? We are not mules, people!
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Internet marketing provides a lot of opportunities for saving money while shopping. Several cash back sites, coupon sites, rewards programs are available on the net that help shoppers saving online. Such facilities are not available in the market. Moreover, online retailers provide special offers to the online buyers. Being a frugal online buyer, I always use cash back websites like ShopAtHome, AAfter Search and Ebates, and MrRebates.
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